European Union copper smelters and refineries incur applicable carbon costs under the EU Emissions Trading System (EU ETS), while imported refined copper is not subject to a direct charge under the current Carbon Border Adjustment Mechanism (CBAM). Copper is not included in CBAM coverage, unlike aluminium and selected iron and steel products. The policy gap is relevant as the EU seeks to strengthen strategic raw materials supply chains and domestic processing.
Copper is used in electricity grids, renewable power generation, electric vehicle charging and industrial electrification. It is also used in data centres. For domestic processors, the key issue is whether they can compete with imported refined metal while meeting EU climate compliance requirements.
EU copper import values and sourcing patterns
Eurostat data put EU copper imports at approximately €17.2 billion in 2025, up from €10.7 billion in 2019, although volumes were broadly stable. Chile supplied 23% of import value, the Democratic Republic of Congo 17% and Brazil 15%. Copper supplies are relatively diversified compared with some other critical materials, but Europe remains a major net importer.
Demand for conductive metal is supported by investment in electricity networks, renewable energy, electric vehicle charging, electrified heating and data centres. As copper-intensive infrastructure expands, processing raw materials in Europe could help reduce external supply-chain risks. The competitiveness of domestic smelting and refining is therefore tied to industrial security.
Downstream shifts if refining capacity changes
If European consumption increases while domestic refining capacity declines, dependence could move further downstream. In that scenario, manufacturers could rely more on refined copper and semi-fabricated products produced elsewhere rather than importing ores or concentrates. This would affect efforts to retain processing value within the European economy.
The availability of mineral resources alone does not ensure supply security when processing capacity is concentrated outside Europe. This matters as the EU pursues its critical raw materials objectives. The location of processing capacity can therefore influence how resilient industrial supply chains remain.
Copper production stages and carbon-related operating costs
Copper production starts with concentrate preparation and proceeds through smelting, converting and refining to cathode copper. The refined metal is then used to make wire rod, tubes, foil and other industrial products. Different stages have different energy requirements and emissions characteristics.
Electricity, fuel, oxygen production and process chemistry all influence the environmental impact of processing. European smelters and refineries must manage energy expenses alongside applicable EU ETS costs. Imported refined copper avoids a direct CBAM charge under current coverage rules.
Investment considerations without direct CBAM coverage
The lack of direct CBAM coverage removes one element that could support the business case for new European copper smelting and refining capacity. Projects may still draw on strategic status under the Critical Raw Materials Act (CRMA), recycling integration, secure concentrate supplies and long-term demand from industrial customers. Traceability and reliable delivery can also support relationships with manufacturers seeking more transparent supply chains.
Investors cannot assume that copper will receive carbon-border treatment available to covered metals. Facility economics depend heavily on electricity prices, processing efficiency, feedstock access, financing conditions and long-term offtake agreements. Affordable low-carbon electricity and advanced processing technology could reduce operating costs and emissions.
Recycled copper provides an additional feedstock source, although scrap availability and quality limit how much secondary material can contribute to total supply. Long-term agreements with grid operators, renewable energy developers and industrial manufacturers could improve revenue visibility for new facilities. For banks and investors, the question is whether these operational advantages can cover capital and energy requirements while offsetting the absence of a direct CBAM benefit.
Regulatory scope for future product coverage
Copper highlights how carbon regulation intersects with industrial competitiveness and strategic material security in EU policy design. The EU aims for more domestic processing, yet CBAM does not cover every energy-intensive metal used in its industrial transition. Expanding coverage to copper would require regulatory decisions on product inclusion, emissions accounting and how border measures relate to domestic carbon pricing.
For now, European copper smelters and refineries operate without the direct CBAM treatment available to certain other metals. Whether low-carbon electricity, recycling inputs, improved technology and strategic supply agreements can sustain new investment remains relevant to strengthening Europe’s copper processing industry within existing rules.