The commission is considering the economic and environmental potential offered by efficiency in energy provision, from the industrial to retail sectors.

In its submission to the Productivity Commission's inquiry into energy efficiency, the Australian Aluminium Council said the best way to promote energy efficiency was to ensure economic growth was strong enough to deliver profits that let companies invest in new technology.

The aluminium industry is one of Australia’s biggest energy users is, accounting for almost 20% of total power consumption.

The Aluminium Council said published claims of energy efficiency gains were widely overestimated and ignored the cost these changes imposed on industries.

It said companies took up energy efficient technology where it was economically feasible to do so, with strong efficiency gains in recent years.

But gains were being held up by inappropriate taxation regimes, the council argued.

"Recent federal government Australian Taxation Office decisions on depreciation in the alumina/aluminium sectors as part of the effective lives exercise will work against early opportunities for replacement of less energy efficient plant and equipment," the council said.

Taxation depreciation rates had a significant influence on the introduction of new energy-efficient technology and equipment, the council argued.

In another submission to the inquiry, conservative think-tank, The Institute of Public Affairs (IPA), said some current regulations intended to support the provision of sustainable energy, such as the federal government's mandatory renewable energy target, were ineffective and costly.

The IPA argued that taxation regimes in the energy sector should be simplified and some form of carbon or greenhouse gas tax should be introduced.

The commission's final report is due in late August.