Commission guidance on weighted-average embedded emissions
The European Commission’s latest Q&A states that when a complex good uses the same precursor from multiple installations, the embedded-emissions value is calculated using a weighted-average approach. Producers can use data from a single installation or a subset only when they can provide sufficient evidence that the corresponding precursors were used in the relevant production process.
This clarification affects how embedded emissions are determined for goods with mixed sourcing of precursors. It also sets conditions for when alternative evidence-based approaches can be applied instead of averaging across installations.
Inventory traceability for different aluminium input profiles
For aluminium processors, the guidance increases the importance of inventory traceability. Primary aluminium, recycled billet and low-carbon aluminium produced using hydroelectric power may be interchangeable in some applications, but they can have significantly different emissions profiles.
If these materials are pooled without a defensible record of their origin and use, the emissions advantage associated with cleaner inputs may be diluted in the CBAM calculation. The effect depends on whether the origin and use can be supported for the relevant production process.
Downstream CBAM proposal would expand data handling
The issue is gaining relevance as the European Commission’s downstream proposal, file 2025/0419(COD), aims to bring selected aluminium-intensive finished goods within the Carbon Border Adjustment Mechanism from 2028. The European Parliament adopted its position in September and broadened parts of the proposed scope.
The final list of products remains under negotiation with the Council of the European Union, and the expansion is still a legislative proposal rather than current law. If adopted, fabricators could need to preserve precursor emissions information across multiple stages of production.
Under such changes, CBAM-related data management would extend beyond smelters into extrusion, rolling, machining and assembly supply chains. This would affect how upstream input information is carried through downstream processing steps.
Operational steps for Southeast Europe suppliers to EU customers
Manufacturers in Southeast Europe supplying EU automotive, construction and industrial customers may begin preparations before any changes take effect. Enterprise resource planning (ERP) and warehouse systems would need to link incoming aluminium to specific production batches where supplier-specific emissions data has commercial value.
EU customers may also introduce carbon-data clauses into long-term supply contracts ahead of the proposed start date. Such clauses could be relevant where suppliers compete on recycled content or on primary aluminium produced using renewable electricity.
Demonstrating precursor origin and use for emissions claims
The commercial value of low-emission aluminium depends on both the emissions intensity of the metal and whether its origin and use can be demonstrated through relevant production stages. This ties supplier performance to evidence that can be traced across production steps rather than only to input characteristics.
As downstream CBAM negotiations progress, preserving reliable precursor data could become a differentiator for aluminium fabricators supplying the EU market. The determining factor would be whether origin and use information can be maintained for the applicable production processes.