European Aluminium has asked EU lawmakers to adjust two parts of the Carbon Border Adjustment Mechanism (CBAM) that will shape how aluminium trade is priced for carbon. The association wants changes to the treatment of post-consumer aluminium scrap and to the 50-tonne annual import threshold under the CBAM review. It argues that the current direction could widen cost gaps between European manufacturers and foreign competitors, with knock-on effects for investment choices and cross-border flows.
The stakes extend beyond primary aluminium producers. Recycling businesses and downstream manufacturers supplying construction, transport and energy equipment are also exposed to how CBAM handles recycled inputs and which import volumes fall outside the mechanism. As the framework is refined, the final design will determine how recycled material is recognised in emissions calculations and how much trade remains outside CBAM coverage.
Scrap accounting could shift carbon costs between suppliers
A central point of contention concerns how historical production emissions are allocated to scrap used in imported aluminium goods. Under an approach discussed in the review, emissions linked to pre-consumer scrap would be included in CBAM calculations for imports, while emissions linked to post-consumer scrap would be excluded.
Pre-consumer scrap refers to material generated during manufacturing, including production offcuts. Post-consumer scrap is recovered from products after their useful life, including vehicles, buildings and packaging. European Aluminium says this distinction can change the embedded emissions attributed to imported aluminium products and therefore their CBAM liabilities.
The association warns that foreign suppliers using post-consumer scrap could face lower carbon-related costs, while European recyclers and downstream manufacturers could continue to see metal prices influenced by carbon costs elsewhere in the supply chain. It also points to market price transmission: carbon costs that affect aluminium premiums, and how those costs are passed on to buyers, can influence the competitive position of European producers. Because regional premiums depend on metal availability, logistics, product specifications and purchasing conditions, effects are expected to vary across markets and product categories.
Resource shuffling risk adds uncertainty for decarbonisation incentives
European Aluminium has also raised concerns about resource shuffling, where suppliers redirect recycled or lower-emission materials into the European market while selling more carbon-intensive production elsewhere. The association argues this could improve the reported emissions profile of EU imports without delivering a comparable reduction in global emissions.
To address this, it has previously advocated applying a carbon cost on CBAM-covered imported aluminium based on primary production emissions regardless of scrap content. The goal is to align imported product treatment with a consistent reference point while still ensuring that recycling’s lower production emissions are recognised and that incentives for recycled materials are maintained.
Threshold debate targets which imports remain outside CBAM
The second issue involves the 50-tonne annual exemption for aluminium imports. The threshold is applied to an importer’s cumulative annual volume across relevant CBAM goods rather than separately per shipment. Given aluminium’s high value relative to weight, commercially significant purchases may still fall below the exemption limit.
In a September submission to the European Parliament, European Aluminium proposed reducing the threshold to five tonnes for aluminium. It cited an example of aluminium needed for approximately 418 doors in a 200-room hotel, with a combined weight of around 9.2 tonnes, as a case where volume could remain below the existing limit.
Whether an individual import is within CBAM scope depends on customs classification and the importer’s aggregate annual volume. The weight of a single shipment alone does not determine treatment under the mechanism, meaning compliance exposure can hinge on how purchases are aggregated over time.
Commission assessment shows coverage below 1% but leaves competition questions
A European Commission assessment published on 30 September found that the existing threshold would exempt 0.87% of embedded emissions during the assessed period. That figure sits below CBAM’s 1% benchmark for exemption coverage.
While this supports the threshold’s overall alignment with the benchmark, it does not answer whether exemptions affect competition evenly across different aluminium product markets or whether individual manufacturers face comparable cost conditions. For importers and exporters, interactions among recycled content declarations, customs classification and annual purchasing volumes remain central when assessing CBAM exposure. A declaration of recycled content alone does not determine whether a product qualifies for an exemption or set its final carbon liability.
Unresolved provisions may affect downstream investment decisions
The remaining uncertainties also have implications for industrial transition planning. European Aluminium says unresolved provisions could complicate 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 impact will depend on which products are included in the final list of covered items, how emissions are calculated under the revised methodology, and which exemptions remain in place.
Taken together, European Aluminium’s requests highlight two design choices that can materially affect CBAM cost allocation: whether post-consumer scrap reduces embedded emissions attributed to imports, and how much trade is shielded by an annual volume exemption. With Commission findings indicating exemption coverage below the 1% benchmark but leaving competition impacts unresolved, further clarification in CBAM rules is likely to remain a key factor for both recycling economics and downstream investment across Europe’s aluminium value chain.