The European Parliament is supporting a broader expansion of the EU Carbon Border Adjustment Mechanism (CBAM) to downstream aluminium and steel products from 2028.
CBAM is designed to put a carbon price on the embedded emissions of certain goods imported into the EU, broadly aligning the cost of carbon-intensive imports with the costs faced by European producers under the EU Emissions Trading System.
Its central objective is to reduce the risk of carbon leakage — where production shifts to jurisdictions with less stringent climate rules rather than emissions being reduced.
The issue is becoming increasingly important for the mining sector because CBAM is moving beyond the point where minerals and metals first enter the European market.
As the mechanism extends into downstream products, the carbon intensity of mined commodities, processing methods, and energy sources can influence the competitiveness of materials throughout the supply chain.
On 15 September, the European Parliament adopted its negotiating position by 464 votes to 50, with 159 abstentions. Parliament’s position goes beyond the European Commission’s original proposal for 180 additional downstream products, with its position covering a substantially broader list of products. These include aluminium-intensive products such as wire, fasteners, springs, and certain finished goods.
What does this mean for the sector?
For aluminium, the European Parliament has also backed lowering the mass-based exemption threshold from 50 tonnes to 5 tonnes.
This would bring smaller volume imports within the potential scope of CBAM and is particularly relevant to aluminium because its high value-to-weight ratio means commercially significant shipments can fall below a 50-tonne threshold.
At the same time, Parliament is seeking tougher anti-circumvention measures. This includes provisions that allow emissions default values to reflect the actual country of origin where imports are considered at risk of circumvention.
Anti-circumvention refers to legal and trade measures designed to stop people or companies from dodging established rules, tariffs, or digital protections.
As previously reported, the EU has been tightening its grip on the global steel supply chain through its melt-and-pour measure. It serves as a transparency and traceability obligation, where importers are required to identify the countries where steel was originally melted and poured.
Shanghai Metals Market (SMM) reports that, if adopted, the expansion would increase carbon-reporting and potentially carbon-cost exposure for exporters of downstream aluminium products into the EU, extending CBAM further beyond primary and semi-finished aluminium.
For miners, the significance goes further than compliance. As Europe prices carbon into imported materials and manufactured goods, the emissions profile of a commodity can become an important factor alongside grade, operating costs, and logistics.
This could place a greater emphasis on lower-carbon mining and processing routes, while potentially influencing where new projects are being developed and which suppliers remain competitive in European markets.
SMM reports that the changes are not final yet, but the Commission’s proposed downstream expansion is intended to apply from 1 January 2028.
Write to Aaliyah Rogan at Mining.com.au
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