The European Commission has clarified that aluminium products sharing the same CN code cannot automatically receive separate CBAM emissions intensities based on alloy grade or recycled content.
CN Codes Determine the Reporting Unit
Guidance issued on 15 October states that embedded emissions must be calculated per functional unit, normally the quantity of goods produced under the same Combined Nomenclature (CN) code. Differences in alloy composition or the proportion of scrap used as an input do not automatically justify separate emissions values within that code.
The clarification has implications for aluminium producers marketing recycled content as a low-carbon attribute. Billets, slabs and other semi-finished products containing a high proportion of scrap can have a substantially different physical carbon footprint from primary aluminium. However, under the Carbon Border Adjustment Mechanism (CBAM), whether that difference can be reflected in statutory emissions reporting depends on the applicable production process and CN-based functional unit.
Recycled Content and Statutory Carbon Accounting
Secondary aluminium production can reduce actual emissions across the production process. Nevertheless, operators should not assume that individual alloy production campaigns can be separated and assigned bespoke CBAM intensities when the applicable functional unit requires aggregation.
The distinction is particularly relevant as recycled content becomes an increasingly important commercial attribute. A lower physical carbon footprint does not automatically translate into a separately reportable CBAM emissions value.
Implications for European Buyers and Regional Suppliers
For EU aluminium buyers, the reporting rules intersect with a market in which premiums have begun to reflect CBAM-related costs. European market assessments were adjusted from the start of 2026 to account for the new border cost, while producers and consumers continue to debate the extent to which those costs can be passed through in spot transactions.
For Serbian and other Southeast European aluminium processors, the challenge is to align commercial product specifications with CBAM data requirements. Suppliers selling recycled-content products need to establish whether the associated carbon benefit can be reflected in the statutory functional unit, a voluntary product carbon footprint, or both.
Proposed Downstream Expansion Could Increase Exposure
The issue may become more significant if the proposed extension of CBAM to additional downstream products is adopted. The proposed changes would bring further aluminium-intensive goods within the mechanism from 2028, linking the emissions associated with upstream metal more directly to the landed cost of fabricated components.
The Commission’s clarification establishes a distinction between marketing a product’s low-carbon characteristics and calculating emissions under the statutory CBAM framework. Aluminium can have a lower physical carbon footprint without automatically qualifying for a separate CBAM emissions value.
