European Aluminium welcomes the Commission’s proposal to extend CBAM to downstream aluminium products and acknowledges the Commission’s efforts to improve the mechanism. However, serious flaws remain, and without rapid action to address circumvention, scrap and exports, CBAM risks increasing rather than reducing carbon leakage.

European Aluminium supports the European Commission’s proposal to extend the Carbon Border Adjustment Mechanism (CBAM) to downstream aluminium products and the decision to launch a process to further strengthen and improve the instrument. The proposal marks a step forward, but it also confirms that CBAM remains a work in progress. We appreciate the Commission’s willingness to address the numerous challenges that CBAM poses in its current form, but what matters most is that these solutions actually work in practice.

The proposed scope expansion is a long-standing request from the aluminium industry and a necessary development, notably through the inclusion of certain automotive components as well as wires and cables. At the same time, we note that many relevant aluminium CN codes remain outside the scope for the moment. As CBAM applies to multiple sectors, it is essential to recognise that aluminium and steel face distinct value chains, trade patterns, and exposure to global competition. Solutions that may be suitable for steel do not automatically translate to aluminium, underlining the need for sector-specific approaches within the CBAM framework.

We also recognise the Commission’s increased focus on preventing circumvention, which is critical to protecting the environmental integrity of CBAM. In the aluminium sector, the treatment of scrap is particularly important. While we acknowledge the Commission’s recognition of the risks associated with scrap misclassification and the use of remelted scrap to avoid the direct and indirect carbon costs faced by similar products in Europe, further refinement is necessary. An exclusive focus on pre-consumer scrap addresses only half of the scrap loophole. Post-consumer scrap must also be included to maintain the competitiveness of EU aluminium recyclers. Treating both categories equally would strengthen monitoring, reporting, and verification requirements, reduce the risk of carbon leakage, and help ensure a level playing field on carbon costs.

European Aluminium welcomes the Commission’s proposal to create a new instrument to support the decarbonisation of energy-intensive industries. While this is a positive signal, the instrument does not address one of CBAM’s most critical gaps: exports. Unlike steel, aluminium exporters are predominantly downstream producers operating outside the EU Emissions Trading System. As a result, they will face higher aluminium input costs due to CBAM, while receiving no support for their exports under the current proposal. This places them at a clear competitive disadvantage. The instrument should therefore be accessible to all aluminium producers, including non-ETS installations and downstream users of aluminium, and be available earlier and for a longer period. However, even with these improvements, this temporary measure cannot replace the need for a dedicated export solution tailored to the aluminium sector, particularly given the uncertainty surrounding future funding levels.

Paul Voss, Director General of European Aluminium, said: “We appreciate the spirit behind this proposal, but spirit alone won’t be enough to give our industry the fair conditions it needs and deserves. All we can say at this stage is that it’s a meaningful first step. We will work tirelessly with the co-legislators and the Commission to make sure that by the time this draft is final, it does what it is supposed to do, not only in theory but in practice.”