European Aluminium has asked 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 says the options under discussion could lead to cost differences between European manufacturers and foreign competitors. It also links the review outcome to potential effects on investment decisions and cross-border trade.
The association says the CBAM review matters for primary aluminium producers, recycling businesses and downstream manufacturers supplying construction, transport and energy equipment. It adds that the final rules will shape how recycled inputs are handled under the mechanism. The outcome will also determine which import volumes remain outside CBAM’s scope.
Scrap accounting for imported aluminium under CBAM
The dispute over recycled aluminium focuses on how historical production emissions are allocated to scrap used in imported goods. Under an approach discussed in the review, emissions linked to pre-consumer scrap would be included in calculations for imported CBAM-covered products. Emissions linked to post-consumer scrap would be excluded from those calculations.
Pre-consumer scrap is described as 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, in turn, their CBAM liabilities.
European Aluminium warns that foreign suppliers using post-consumer scrap could face lower carbon-related costs. It says European recyclers and downstream manufacturers could continue to see metal prices influenced by carbon costs elsewhere in the supply chain. The association also points to how carbon costs may affect aluminium premiums and how those costs are passed on to buyers.
It says regional premiums can vary depending on metal availability, logistics, product specifications and purchasing conditions. As a result, it expects impacts to differ across markets and products. The association links these factors to changes in the competitive position of European manufacturers.
Recycling incentives and concerns about resource shuffling
European Aluminium has also raised concerns about resource shuffling in which suppliers redirect recycled or lower-emission materials to the European market while selling more carbon-intensive production elsewhere. The association says this could improve the reported emissions profile of EU imports without delivering an equivalent reduction in global emissions.
The association previously called for a carbon cost on imported aluminium covered by CBAM that reflects primary production emissions regardless of scrap content. It says its position aims to align treatment of imported products while ensuring that rules recognise recycling’s lower production emissions. It also says incentives for recycled materials should be maintained within the revised framework.
Proposed change to the 50-tonne import exemption
A separate issue raised by European Aluminium concerns the 50-tonne annual exemption. The threshold applies to an importer’s cumulative annual volume across relevant CBAM goods rather than being assessed shipment by shipment. Because aluminium can have a high value relative to its 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 for aluminium imports to five tonnes. It cited an example involving aluminium required for approximately 418 doors in a 200-room hotel, with a combined weight of around 9.2 tonnes. The association said this could represent a potentially significant volume that might remain below the existing limit.
European Aluminium said whether an individual import falls within CBAM’s scope depends on customs classification and the importer’s aggregate annual volume. It added that shipment weight alone does not determine how a product is treated under the mechanism. It also noted that declarations of recycled content do not by themselves determine qualification for an exemption or final carbon liability.
European Commission assessment of emissions coverage below 1%
The European Commission published an assessment on 30 September finding that the current threshold would exempt 0.87% of embedded emissions during the assessed period. The figure is below CBAM’s 1% benchmark limit. The association said this supports the threshold’s overall emissions coverage against that benchmark.
The Commission assessment does not address whether exemptions affect competition equally across different aluminium product markets. It also does not establish whether individual manufacturers face comparable cost conditions under CBAM rules. European Aluminium said importers and exporters need to consider interactions between recycled content, customs classification and annual purchasing volumes when assessing exposure.
Downstream investment uncertainty tied to CBAM scope
The unresolved provisions are also described as creating uncertainty for investment decisions involving recycling plants, extrusion facilities and other downstream manufacturing operations. European Aluminium said broader coverage of downstream products could reduce incentives to import finished goods instead of manufacturing them in Europe.
The eventual effect will depend on several elements including the final list of covered products, the applicable emissions calculation methodology and which exemptions are retained in any revised framework. The association said these provisions will influence how CBAM costs are distributed between imported aluminium products, recycled materials and European manufacturing activities.