European Aluminium has asked EU lawmakers to revise two elements of the Carbon Border Adjustment Mechanism (CBAM): how post-consumer aluminium scrap is treated and the 50-tonne annual import threshold. The association said the approaches under discussion could create cost differences between European manufacturers and foreign competitors. It also linked the changes to potential effects on investment decisions and cross-border trade.
The association said the CBAM review outcomes will affect primary aluminium producers, recycling businesses and downstream manufacturers supplying construction, transport and energy equipment. It added that the final framework will determine how recycled inputs are handled under CBAM and which import volumes remain outside its scope. The treatment of scrap and exemptions is therefore central to how imported aluminium products are assessed.
Scrap accounting and allocation of embedded emissions
The dispute over recycled aluminium focuses on how historical production emissions are allocated to scrap used in imported goods. Under the approach discussed in the review, emissions linked to pre-consumer scrap would be included in calculations for imported CBAM goods. Emissions associated with post-consumer scrap would be excluded.
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 said this distinction can change the embedded emissions attributed to imported aluminium products and their resulting CBAM liabilities.
The association warned that foreign suppliers using post-consumer scrap could face lower carbon-related costs. It said European recyclers and downstream manufacturers could continue to encounter metal prices influenced by carbon costs elsewhere in the supply chain. It also pointed to potential effects on how carbon costs influence aluminium premiums and how those costs are passed to buyers.
European Aluminium said regional premiums depend on factors including metal availability, logistics, product specifications and purchasing conditions. It stated that this means impacts may vary across markets and products. The association also highlighted that carbon-cost transmission can affect competitive positioning for European manufacturers.
Concerns about resource shuffling in recycling flows
European Aluminium raised concerns about resource shuffling, where suppliers redirect recycled or lower-emission materials to the European market while selling more carbon-intensive production elsewhere. The association said this could improve the reported emissions profile of EU imports without delivering an equivalent reduction in global emissions.
The group previously advocated imposing a carbon cost on imported aluminium covered by CBAM that reflects primary production emissions regardless of scrap content. It said its position aims to align treatment of imported products while ensuring that rules recognise recycling’s lower production emissions. The association also called for incentives for recycled materials to be maintained within the revised framework.
Import exemption threshold and proposed reduction
A second 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 separately to each shipment. The association said commercially significant purchases may remain below the exemption limit because aluminium can have a high value relative to its weight.
In a September submission to the European Parliament, European Aluminium proposed reducing the threshold to five tonnes for aluminium. It 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 volume that could fall below the existing limit.
The association 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 treatment under the mechanism. This means compliance exposure can depend on how imports are aggregated over time.
Commission assessment of exemption coverage
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. The share was described as below CBAM’s 1% limit for exemption coverage.
European Aluminium said this finding supports overall emissions coverage against the benchmark but does not show whether exemptions affect competition equally across different aluminium product markets. The association also noted that it does not establish whether individual manufacturers face comparable cost conditions.
For importers and exporters, European Aluminium said interactions between recycled content, customs classification and annual purchasing volumes remain important for assessing CBAM exposure. It added that a declaration of recycled content alone does not determine whether a product qualifies for an exemption or establish its final carbon liability.
Regulatory uncertainty for recycling and downstream investment
The unresolved provisions were 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 association stated that eventual effects will depend on the final list of covered products, the applicable emissions calculation methodology and exemptions retained in the revised framework. It said these provisions will influence how CBAM costs are distributed between imported aluminium products, recycled materials and European manufacturing activities.