European Aluminium has called on EU lawmakers to revise two elements of the Carbon Border Adjustment Mechanism (CBAM): the treatment of post-consumer aluminium scrap and the 50-tonne annual import threshold. The association argues that the current approaches under consideration could create cost differences between European manufacturers and foreign competitors, potentially influencing investment decisions and cross-border trade.
The issues affect primary aluminium producers, recycling businesses and downstream manufacturers supplying construction, transport and energy equipment. The outcome of the CBAM review will determine how recycled inputs are treated under the mechanism and which import volumes remain outside its scope.
Scrap accounting raises questions over carbon costs
The dispute over recycled aluminium centres on the allocation of historical production emissions to scrap used in imported goods. Under the approach discussed in the review, emissions associated with pre-consumer scrap would be included in the calculation for imported CBAM goods, while emissions associated with post-consumer scrap would be excluded.
Pre-consumer scrap consists of material generated during manufacturing, including production offcuts. Post-consumer scrap is recovered from products at the end of their useful life, including vehicles, buildings and packaging. The distinction can affect the embedded emissions attributed to imported aluminium products and, consequently, their CBAM liabilities.
European Aluminium warns that foreign suppliers using post-consumer scrap could benefit from lower carbon-related costs, while European recyclers and downstream manufacturers could continue to face metal prices influenced by carbon costs elsewhere in the supply chain.
The potential impact extends to market price transmission. The extent to which carbon costs influence aluminium premiums, and how those costs are passed through to buyers, will affect the competitive position of European manufacturers. Regional premiums also depend on metal availability, logistics, product specifications and purchasing conditions, meaning the impact will vary across markets and products.
Resource shuffling and recycling incentives
European Aluminium has also raised concerns about resource shuffling, whereby suppliers redirect recycled or lower-emission materials to the European market while selling more carbon-intensive production elsewhere. This could improve the reported emissions profile of EU imports without producing an equivalent reduction in global emissions.
The association has previously advocated imposing a carbon cost on imported aluminium covered by CBAM that reflects primary production emissions regardless of scrap content. Its position seeks to align the treatment of imported products, although the rules must also address how recycling’s lower production emissions are recognised and how incentives for recycled materials are maintained.
Five-tonne threshold proposed for aluminium imports
The second issue concerns the 50-tonne annual exemption. The threshold applies to an importer’s cumulative annual volume across the relevant CBAM goods, rather than separately to each shipment. Because aluminium can have a high value relative to its weight, commercially significant purchases may remain below the exemption limit.
In a September submission to the European Parliament, European Aluminium proposed reducing the threshold to five tonnes for aluminium. The association cited aluminium required for approximately 418 doors in a 200-room hotel, with a combined weight of around 9.2 tonnes, as an example of a potentially significant volume falling below the existing limit.
Whether an individual import falls within CBAM’s scope still depends on its customs classification and the importer’s aggregate annual volume. The weight of a particular shipment alone does not determine its treatment under the mechanism.
Commission assessment finds emissions coverage below the limit
The European Commission’s assessment, published on 30 September, found that the existing threshold would exempt 0.87% of embedded emissions during the assessed period. This is below the mechanism’s 1% limit.
The finding supports the threshold’s overall emissions coverage against that benchmark. However, it does not establish whether the exemption affects competition equally across different aluminium product markets or whether individual manufacturers face comparable cost conditions.
For importers and exporters, the interaction between recycled content, customs classification and annual purchasing volumes remains important when assessing CBAM exposure. A declaration of recycled content alone does not determine whether a product qualifies for an exemption or establish its final carbon liability.
Regulatory uncertainty affects downstream investment
The unresolved provisions also create uncertainty for investment decisions involving recycling plants, extrusion facilities and other downstream manufacturing operations. Broader coverage of downstream products could reduce incentives to import finished goods instead of manufacturing them in Europe.
The eventual effect will depend on the final list of covered products, the applicable emissions calculation methodology and the exemptions retained in the revised framework. These provisions will influence how CBAM costs are distributed between imported aluminium products, recycled materials and European manufacturing activities.
