Major players in the global metals trade pressed the European Commission for greater clarity around the EU’s Carbon Border Adjustment Mechanism following a public consultation that drew over 350 company responses, highlighting concerns about the lack of emissions intensity details as the bloc prepares to fully operationalize its landmark carbon import policy.
The consultation feedback highlights industry concerns about the technical details and transparency involved in calculating the intensity and benchmark values of embedded emissions as companies prepare for CBAM’s transition from its current reporting-only phase to its definitive phase starting from Jan. 1, 2026.
Global commodity trader Trafigura emphasized the urgent need for regulatory clarity in the aluminum sector, specifically calling for the European Commission to publish “default values” and “free allocation benchmarks” to help importers estimate costs.
“In setting default and benchmark values, we would urge consideration as to the geographical concentration of certain value chains, given it is not always feasible, or economically viable, to procure certain upstream, midstream, or downstream products from within the EU, or from a broad range of countries,” it said in its submission to the European Commission.
Trafigura highlighted the mounting complexity of calculating carbon emissions for downstream aluminum products, noting that determining embedded carbon content becomes increasingly challenging as products become more intricate.
Downstream scope extension
The move reflects Brussels’ broader efforts to combat carbon leakage and prevent EU companies from relocating manufacturing and processing operations to countries with weaker climate regulations outside the bloc.
The European Commission launched the eight-week consultation in July, seeking industry feedback on expanding CBAM’s scope to cover additional downstream products along the value chain.
Germany’s Thyssenkrupp Steel Europe AG pushed for expanding CBAM’s scope to include strategically important downstream products, arguing that current trade metrics fail to reflect the risk of production relocation to non-EU countries.
Drawing parallels with the US approach, which extended steel tariffs to over 400 downstream products, Thyssenkrupp insists that CBAM must apply across value chains.
The steel producer urged the European Commission to prioritize products in the automotive and energy sectors, such as steel laminations for electric vehicles and power transformers, which are vital for the EU’s economic prosperity and industrial resilience.
Low-carbon steel developer Stegra expressed strong support for CBAM while calling for the timely implementation of the proposed improvements, including indirect emissions coverage and enhanced anti-circumvention safeguards.
The company stressed that these measures could be gradually implemented during 2026 and 2027 without significant difficulty, warning that timeline deviations would undermine both CBAM and the effectiveness of the EU Emissions Trading System.
The organization stresses that the phase-out of free allocations under the EU ETS is critical for the decarbonization of the region’s industry.
The EU’s CBAM works alongside the bloc’s ETS by imposing carbon pricing on imports, designed to prevent carbon leakage as Brussels phases out free emissions allowances for domestic producers. Under the mechanism, importers must purchase CBAM certificates equivalent to the carbon content of goods from six covered sectors: aluminum, cement, electricity, fertilizer, iron and steel, and hydrogen.
Platts assessed EU Allowances for nearest December delivery at Eur72.26/mt CO2 equivalent ($84.36/mt CO2e) on Aug. 27. CBAM’s carbon levy mirrors the EU Emission Allowance price.
