The European aluminium industry offers one of the most fundamental materials for achieving the EU’s sustainability ambitions and provides our continent with enhanced strategic autonomy thanks to a complete and resilient value chain. In this section, you can discover how we are working with policy makers and stakeholders to create the conditions for the European aluminium industry to grow, evolve, and help build a more sustainable world.
We support the EU’s intention to prevent carbon leakage. Instruments like the CBAM, which intends to encourage decarbonisation globally by adding a carbon price for imported goods comparable to the costs paid by EU producers, represent a highly attractive idea in principle.
Unfortunately, independent analysis requested by European Aluminium has shown why the CBAM cannot yet be considered a suitable alternative to existing EU carbon leakage protection measures. This is mainly because of the electro-intensive nature of primary aluminium production and the unique indirect carbon costs only European producers face in their power price due to the EU ETS (see a short explanation here). These costs will remain significant, even when consuming decarbonised electricity or signing long-term power contracts. Also, including indirect emissions in the CBAM increases the risk of circumvention and will not lead to a reduction in global emissions. Rather the opposite!
We, therefore, support the final agreement on the CBAM, which initially excludes the application of the CBAM on indirect emissions for sectors today eligible for indirect costs compensation under EU state aid rules. The inclusion of indirect emissions in the CBAM should be considered only once the EU electricity grid is close to being completely emission-free (very likely not before 2035) and all circumvention risks and downstream impacts have been assessed across the entire European aluminium value chain. This should include as well a detailed assessment of the consequences of the inclusion of more products upstream or downstream (see our response to the EU Commission study on this here), including precursors such as alumina (see a paper about this topic here).
European aluminium is now closely working with the European Commission and broader stakeholders on the rules for the initial emissions’ reporting period applicable to importers beginning in October 2023. A first review of the mechanism is expected in 2025.
For further information, please find our detailed position paper on the CBAM here .
Our industry is ready to work with national governments and the Commission to phase out Russian fossil fuel imports while ensuring adequate gas and electricity supplies this winter. We see this as an opportunity for boosting renewable energy capacity across the EU, which in turn spurs the demand for our metal because of its critical role in clean energy technologies.
As an electricity-intensive industry that also heavily relies on gas, any measure to reduce energy consumption will greatly impact our industry, particularly as there are few substitution possibilities in the short term. Measures must be carefully tailored and be introduced alongside adequate state aid. Moreover, further development of storage technologies or other forms of dispatchable low-carbon electricity generation (such as PPAs) is needed to address the challenge of intermittent renewable generation.
We must ensure that we do not shift from energy dependency to a broader raw material dependency, making our economy and downstream industries weaker and less resilient than our global competitors.
The European Emission Trading System Reform (Phase IV: 2021-2030), presented in July 2021, is one of the cornerstones of the European climate policy and one of the most cost-effective ways to reduce carbon emissions. Our association monitors and supports the European Commission with technical know-how to ensure the reform comprises essential elements, including adapted benchmarks and support for decarbonisation projects, while ensuring protection against carbon leakage.
The newly adopted CEEAG will be crucial to ensure the necessary national and EU funding to achieve the Green Deal’s decarbonisation objectives, regulated via the “Fit For 55” legislative package while accelerating the transformation of energy-intensive and circular industries like aluminium. State Aid can be a powerful instrument to accelerate the transformation of our industry, especially by supporting key investments and research in decarbonisation technologies that are not yet available at scale on the market today and providing regulatory relief where appropriate.
In particular, the possibility for targeted Renewable Energy Sources (RES) charge reductions under EU State Aid Rules has played a crucial role in limiting carbon leakage for our sector, given that aluminium smelters are particularly sensitive to any increase in the cost of electricity. We are working in close cooperation with the EU and the Member States to ensure they encompass all potential charges caused by the integration of new decarbonisation technologies or policies stemming from the new legislation to be proposed. It is crucial to note that new decarbonisation policies introduced in legislation often have the intended or unintended effect of increasing the electricity price for industrial consumers. These more ambitious renewable policies across Europe must be balanced by ensuring the stability of its financing base.
We are providing policymakers with all the necessary data and evidence to ensure that the CEEAG are adequately implemented and provide European aluminium producers with predictable support for the next decade (2021-2030).
As an energy-intensive industry, the aluminium sector depends on a massive and constant supply of energy. That is why European Aluminium is committed to feeding into the work of the EU institutions on the upcoming Reform of the Energy Market Design.
We will ensure the market is adapted to the long-term realities our industry will face in the years to come. To safeguard the aluminium industry in Europe, it is paramount that any reform or intervention on the market’s functioning accounts for the future predominance of renewable generation in the grid while preventing supply disruption risks.
European Aluminium will work together with EU stakeholders to guarantee the new market design leads to efficient and swift decarbonisation of the European energy system, while safeguarding security and affordability of supply, and incentivising investment into and dispatch signal for renewable energy, grid infrastructure, and storage capacity.
Because of the importance of our industry in the green transition and our electro-intensiveness, we are part of the current list of eligible sectors for the indirect carbon cost compensation regime under the ETS Phase IV.
Our association provides EU policy makers with technical know-how to provide adequate protection against carbon leakage for EU producers.
As a circular material with permanent properties, aluminium has been designated as a sustainable economic activity under the EU Taxonomy, which will facilitate investments in our industry for financial undertakings. European Aluminium provides its expertise to EU policy makers to ensure the new framework is smoothly implemented and creates an adequate and efficient framework tailored to our industry. In particular, our association focuses on developing efficient criteria for the designation of sustainable aluminium to ensure that European producers benefit from this new mechanism.
Electricity is aluminium’s lifeblood, and our industry is constantly searching for new ways to use greener energy and produce more efficiently.
To achieve our sustainability objectives, we need more rapid deployment of renewable electricity capacity and access to long-term power purchase agreements (PPAs) to shield it against extreme fluctuations in the energy markets. That’s why we are working with the energy sector and policymakers to set up long-term mechanisms to facilitate decarbonised energy production, accessibility, and consumption at globally competitive prices for energy-intensive consumers.
We actively encourage national financial guarantees that support the uptake of Renewable Energy (RES) PPAs. RES production costs have risen because of the increase in raw material costs and shortages, making it even more challenging to enter into long-term contracts. We also support the development of a future-proof legislative framework for carbon capture technologies, which will be key in fulfilling the EU’s decarbonisation objectives.
The Energy Performance of Buildings Directive (EPBD) promotes improving the energy performance of buildings in the EU. It requires Member States to apply a methodology for calculating the energy performance of buildings and to set minimum performance requirements for new buildings, buildings undergoing major renovations and for building elements. The EPBD was amended in June 2018 and is currently under revision.
We encourage the calculation of life cycle global warming potential (GWP) of buildings to include the environmental benefits from reuse and recycling at end-of-life.
When Member States set minimum performance requirements for transparent building elements like windows, European Aluminium recommends using the ‘energy balance’ methodology that considers both insulation and solar heat gains to assess their thermal performance.
Currently the EU and its aluminium industry are facing a growing crisis in aluminium scrap availability due to a sustained increase in exports, particularly to Asia and, more recently, the United States. The EU has been a net exporter since 2002 of aluminium scrap (CN7602), reaching a historic peak in 2024 with 1.3 million tonnes exported (approximately 75% to Asia).
At the same time, EU recycling furnace capacity has increased over the last few years due to investment made in response to recent policies promoted by the European Union. Aluminium companies have invested €700 million in building new recycling facilities, expanding existing ones and upgrading processes with the latest technologies. The urgency of the situation calls for immediate action to address the unfair market conditions for exports to other regions. A horizontal export fee (erga omnes) on all aluminium scrap is needed. Such a measure will address the continuously worsening situation and help level the playing field for European aluminium recyclers competing globally.
We are ready to work with policymakers and stakeholders to design a long-term strategy that solidifies the EU as a leader in the circular economy. Market forces will decide which scrap will leave or stay in Europe (EU/EFTA). This is not about protectionism but about correcting an unlevel playing field created by unfair trade policies and market distrotions in third countries. Restoring the balance in the aluminium scrap market will improve access to domestic scrap and help build a stronger, greener, and more self-sufficient industrial base.
The European Commission’s long-anticipated proposal for the revision of the Waste Shipment Regulation entered into force in April 2024 The proposal identifies progress in establishing a level playing field for EXTRA-EU shipments and the need to reduce the complexity and administrative burden associated with INTRA-EU waste shipments. This file is a key priority for the aluminium sector because it can help to ensure a continuous supply of scrap in Europe, establishes a level-playing field with third countries having to demonstrate equivalent environmental conditions to treat EU waste and maximises the sector’s contribution to the EU’s Low-Carbon and Circular Economy ambitions. We cooperate with policy makers, cross-industry partners, the full recycling value chain, and downstream partners to develop a holistic framework that can strengthen the transition to a circular economy.
The EU’s Waste Framework Directive lays down basic concepts and definitions related to waste management, including definitions of waste, recycling, and recovery. European Aluminium welcomes the Commission’s intention to revise this framework. Modernising waste legislation is a timely and necessary step to establish a resource-based framework fit for the transition to a Circular Economy and well-equipped to meet the objectives of the European Green Deal.
We are working with policy makers in developing the proposal and are providing relevant evidence and information on aluminium collection and recycling as well as the responsible management of industrial waste.
In 2023, the European Commission published the review of the End-of-Life Vehicle (ELV) Directive. The file is now undergoing the co-decision process. The ELV Directive is pivotal to determining the destiny of ELVs – and the raw materials that can be found therein – in Europe. It will establish modernised rules for the collection, treatment, and data reporting for all car materials and components, including aluminium.
The use of aluminium in European cars has increased, mainly driven by electric vehicles and lightweighting, leading to an 18% rise between 2019 and 2022, with a steady increase being forecasted over the course of the next decade. Given the increasing use of aluminium in automotive applications, it has become critical for the European aluminium industry to contribute to the review of legislation concerning the mobility sector’s increased circularity and environmental sustainability.
Today, 95% of aluminium is recovered from the end-of-life vehicles. However, there is a huge potential for improvement in the quality of the aluminium fraction recovered. European Aluminium is working closely with the European Commission on this proposed Regulation. We want to ensure that the revised ELV Directive focuses on improving the quality of recycled materials to ensure their reuse in closed loops and high-quality applications and takes action against any illegal shipment or treatment of ELVs.
While cobalt and lithium are probably best known for being used in energy storage, batteries generally use a wide variety of minerals for the cathode, including aluminium. Aluminium is also widely used in battery enclosures.
For this reason, our sector wants to help establish a competitive and sustainable EU battery value chain and supports the EU Batteries Regulation that establishes mandatory requirements for all batteries placed on the EU market, including safety, sustainability, and carbon footprint requirements.
We support the use of life cycle assessment to assess the environmental performance of products, ambitious and realistic collection targets for portable batteries and the introduction of robust methodology and ensure a thorough impact assessment before considering the possibility of introducing the mandatory recycled content targets.
In November 2022, the European Commission published its revision of the Packaging and Packaging Waste regulation (PPWR) which was adopted in February 2025. One of the primary goals of the proposed revision is to prevent packaging waste and make all packaging recyclable by 2030.
Aluminium is a popular packaging material for food, drinks and pharmaceutical products because it provides a total barrier function, safeguarding the product's integrity and prolonging its shelf life. Aluminium is a top performer among recycling packaging materials, with a with a 75% recycling rate for aluminium beverage cans in EU27, UK, EFTA, in 2022.
To achieve the EU’s goal of making all packaging reusable or recyclable by 2030, the new regulations will significantly reduce the generation of packaging waste by setting binding re-use targets, restricting certain types of single-use packaging and requiring economic operators to minimise the packaging used. The regulation covers the full life cycle of packaging. Importantly for aluminium beverage cans Deposit Return Systems are now mandated by 2029 – with exemption only if existing systems guarantee 80% of separate collection by 2026 and a plan for improvement. More generally from 2030 only recyclable packaging can be put on the market, this being assessed if it fulfils that (a) it is designed for material recycling, which enables the use of resulting secondary raw materials that are of sufficient quality that they can be used to substitute primary raw materials; and (b) when it becomes waste, it can be collected separately and sorted into specific waste streams without affecting the recyclability of other waste streams and recycled at scale.
State-financed Chinese dumping undermines Europe’s trade defence and seriously harms its ability to protect jobs, innovative businesses, and entire industrial value chains.
For this reason, we applaud the Commission for imposing definitive anti-dumping rules on Chinese aluminium extrusions and proposing to regulate the import of products with foreign subsidies.
However, we strongly oppose the 9-month suspension of the regulation for Chinese anti-dumping duties on aluminium flat-rolled products. Until dumped imports get regulated, our region will be flooded with underpriced, high-carbon aluminium that jeopardises our Green Deal ambitions.
A 2021 OECD report examined state subsidies to 32 companies representing 70% of the global aluminum market. The study found that Chinese firms received state support ranging from 4% to 7% of annual revenues compared to similar support representing 0.2% of annual revenues of non-Chinese firms. These subsidies unfairly benefit Chinese production at the expense of production in Europe. They also weaken domestic supply chains for many products vital to Europe’s strategic autonomy.
The harmful effects of distortive subsidies must be tackled on a European and global level. European Aluminium welcomes the EU Commission’s initiative to propose a new instrument on foreign subsidies and calls upon the European Commission to effectively address the distortive effects of foreign subsidies in the EU single market and help create a level playing field for the aluminium industry in Europe.
Together with our American, Canadian, and Japanese counterparts, we are also advocating for a global solution to this problem and have released a joint policy brief for G7 leaders.
On 1 January 2022, the United States replaced its Section 232 tariffs on aluminum with tariff-rate quotas. Under the tariff-rate quota system, import volumes are allocated on an EU Member State basis in line with the 2018-19 historical trade volumes. Section 232 aluminium products from the EU that are within the quota will enter free of any Section 232 duty, while products entering above the quota will continue to be subject to a 10 percent duty.
We strongly oppose the tariff-rate quota system. European Aluminium and its US counterpart The Aluminum Association have called for lifting the unjustified Section 232 tariffs on EU imports since their implementation in 2018 and have submitted a concrete proposal on restoring the trading relationship between the two markets. Europe has always been an important ally of the US, and European aluminium exports to the US have never posed a threat to US national security. On the contrary, the US and European aluminium value chains are strongly interlinked, with over 15 multinationals operating in both territories.
European Aluminium welcomes the EU-US decision to develop a Global Arrangement on Sustainable Steel and Aluminium. We believe the GASA if designed correctly, can be an excellent platform for deeper cooperation between Europe, the US and other like-minded regions towards reducing global emissions and non-market behaviours by establishing a common approach based on coherence and a level playing field. The GASA can also play an important role in driving decarbonisation efforts while ensuring the competitiveness of industry players.
According to the announcement statement from 31 October, the EU and US seek to conclude their negotiations on the Arrangement by 31 October 2023. We consider the permanent removal of the Section 232 tariffs and quota system for European companies to be pivotal for starting negotiations on the implementation of such an Arrangement.
The existing World Trade Organisation (WTO) rules are inadequate to remedy the scale and scope of state intervention in the global aluminium market. Most WTO rules date back to 1995, when the organisation was established, and before China was the dominant player it is now. The rules should be redesigned to address global market distortions resulting from subsidies. The WTO should also provide tools to assess the impact of government support throughout the whole value chain and better account for the influence of state actors, given the dual role of some State-Owned Enterprises as both recipients and providers of support.
Trade is not just about business. European Union trade policy has had a significant impact on other policies such as climate change, social rights, safety, and standards. This policy linkage is critical for our industry to lead on sustainability and promote environmental, health, and safety (EHS) standards globally. For this reason, we welcome new free trade agreements with trade partners that comply with the Paris Agreement, high labour standards, and equal standards in terms of consumer/employee health and safety.
The European Commission’s Industrial Emissions Directive (IED) is a critical piece of legislation to achieve a high level of protection for the health of humans and the environment. The Directive was revised and published in 2024.
European Aluminium is a member of the Industrial Emissions Alliance group and is actively involved in the various consultations relating to the implementation of the revised IED (BREF guidance revision, development of transformation plans, etc). Thanks to our expertise in industrial emissions, European Aluminium is an active stakeholder in all matters pertaining to the IED, its implementation at the Member State level, and the drafting of Best Practices Reference Documents (BREFs) for the industry through the Sevilla process.
The aluminium value chain in Europe complies with the highest health and environmental protection standards. We are working with policy makers to ensure that the Best Practice Reference Documents (BREFs) provide a viable approach to determining the Best Available Techniques (BATs) for minimising industrial emissions. We want to ensure that the Best Available Techniques Emission Limit Values (BAT-AELs) in these documents are aligned with what our industry can realistically achieve while continuously striving for improvement.
REACH is the EU Regulation on Registration, Evaluation, Authorisation and Restriction of Chemical substances, aiming to improve the protection of human health and the environment by thoroughly assessing the properties of chemical substances produced in Europe or imported and regulating their safe use accordingly. The REACH Regulation is currently under revision after over a dozen years of operation. After several delays, the draft legislative proposal is expected by the end of 2025.
The most relevant substances for our industry in this context are produced substances such as aluminium metal, aluminium oxide and aluminium hydroxide, but also several other substances used in the production process such as, among others, the coal tar pitch in the production of anodes for primary aluminium smelting.
In 2005, we formed the Aluminium REACH Consortium with the International Aluminium Institute to help the aluminium industry comply with REACH legislation by providing the necessary information on REACH classifications and risk assessment.
Alongside REACH, the revised CLP Regulation, which aligns the EU system of classification, labelling and packaging of chemical substances and mixtures to the Globally Harmonised System, will be critical to successfully implementing the EU’s Chemicals Strategy for Sustainability. The revised CLP Regulation was published in 2024.
Concerned by climate change, the gradual depletion of natural ressources and weather fluctuations, it’s important to prepare in terms of climate mitigation and improve our water efficiency. Although the aluminium industry is not the most water intensive, water is still essential for our uses (e.g. cooling water). Our individual companies are taking strides to reduce their water consumption and improve their water re-use. At European level, we are trying to map our water footprint. This is challenging given variations in plant configurations, locations, water availability, types of processes done at the site (multiple activities, multiple BREFs – challenges in monitoring/reporting allocation per BREF/process), layout (joint pipes for different processes, etc) and collection systems (rainwater), etc.
The European Commission has introduced a new harmonised environmental classification for lead metal. The last proposal by the ECHA Risk Assessment Committee (RAC) deviated substantially from ECHA’s metal’s current classification guidance (and was not in line with the harmonised classification of other metals). Alloys containing lead above the classification thresholds will have to classify and potentially comply with Seveso and ADR requirements.
TDp testing can be done to refine the classification assessment. Data from the test can then be compared to the Pb metal ion Ecotoxicity Reference Values (ERVs) to determine the potential for acute and chronic toxicity, and define the relevant classification.
The CRM Act provides an opportunity to deliver a European industrial agenda supporting sustainable growth and our bloc’s strategic autonomy while ensuring raw materials production and transformation at the highest environmental and social standards. Creating greater complementarity between the different policy areas will further help to ensure the success of the twin transition and deliver the objectives of the EU Green Deal.
Aluminium figures as one of those raw materials deemed strategic by the EU. European Aluminium stands ready to collaborate with the co-legislators to ensure that the upcoming secondary legislation delivers on its promise to create a supportive regulatory environment and the right economic incentives for raw material supply chains and the net-zero industries they serve.
The NZI Act aims at maintaining competitiveness and reducing strategic import dependencies in key net-zero technology products and their supply chains, to make the European Union more investment and innovation friendly.
The Act recognises that for hard-to-abate sectors, including energy-intensive industries, the number of commercially available and scalable net zero technologies is currently limited. For those net zero technologies already in use or in the early stages of development, major reductions in cost and improvements in performance will be needed. Therefore, investments in research and innovation both at Union and national level continue to be important.
Nevertheless, the Act's wording could be improved. European Aluminium believes that there should be a stronger wording about carbon leakage, and especially investment leakage for trade and electro-intensive industries.
In March 2022, the European Commission presented its proposal for an Ecodesign for Sustainable Products Regulation (ESPR) as part of its wider Circular Economy Action Plan. This initiative, which will build on the Ecodesign Directive and propose additional legislative measures as appropriate, aims to make products placed on the EU market more sustainable.
A well-balanced approach adapted to our value chain will allow for a smooth and accelerated transition to a resource-efficient, low-carbon, and circular economy, which can help realise the EU’s Green Deal’s sustainability objectives. It also can help ensure coherency and complementarity between all policy areas relevant to our sector. To fulfil the ESPR principles and harness their full potential, each covered product category must be scrutinised in detail and carefully assessed.
European Aluminium will work towards ensuring ESPR market instruments are tailored to support the uptake of sustainable products, and its implementation comes with continued work on standards and coherence with existing legislation as well as proportional and adapted Digital Product Passport (DPP) requirements.
The Construction Products Regulation (CPR) lays down harmonised rules for the marketing of construction products in the European internal market and provides a common technical language to assess construction products’ performance. Declaration of Performance (DoP) and CE marking are key parts of it.
European Aluminium introduced simplified procedures that allow affordable compliance for manufacturers. Guidance documents for CE marking and declaring performance (DoP) under the Construction Products Regulation (No 305/2011) can be found in the resource centre.
The CPR is currently under revision.
Safety in the workplace is a core concern of the European aluminium industry. Our members fully embrace a workplace safety culture and continuously look for improved ways to reduce their employees’ exposure to risk.
The European aluminium industry listens to external experts and leverages advances in information and communication technology to reduce this further. Our members have already reduced the total recordable incident rate for the industry – a measure of the total number of fatalities, lost time accidents, restricted work cases, and medical treatment cases per million hours worked – by 80% since the 1990s.
As part of our continuous commitment to improving safety, European Aluminium organises a Safety Workshop every two years. This workshop allows our members to gather and share best practices and showcase any innovations in safety. We recognise and celebrate initiatives with our ‘Safety Solutions’ competition as part of this biennial event. Our member companies present their best safety solutions at the individual plant level. This encourages all staff to take an interest in improving safety.
The aluminium industry wants to create long-term and tangible socio-economic value for the local communities in which it operates. We are working with our members to ensure that each aluminium production facility has a programme to share value with the local community.
Aluminium is one of the most common elements on earth. It is the most abundant metal found in the earth’s crust. It is used in a wide range of applications.
Some of these applications are familiar and visible. Think about aluminium pans, beverage cans, or household foil, for example. But aluminium is also in things we don’t see. It occurs naturally in the air we breathe, the water we drink and the food we eat. It plays an important role in medicines, vaccines and cosmetics.
Given aluminium’s widespread occurrence in both the environment and commercial applications, its safety has been thoroughly investigated. There is no evidence that aluminium poses a health risk. Despite this, a number of myths persist. Together with International Aluminium, we are committed to dispelling myths and providing accurate scientific data on occupational and consumer health related issues.
We support the EU’s intention to prevent carbon leakage. Instruments like the CBAM, which intends to encourage decarbonisation globally by adding a carbon price for imported goods comparable to the costs paid by EU producers, represent a highly attractive idea in principle.
Unfortunately, independent analysis requested by European Aluminium has shown why the CBAM cannot yet be considered a suitable alternative to existing EU carbon leakage protection measures. This is mainly because of the electro-intensive nature of primary aluminium production and the unique indirect carbon costs only European producers face in their power price due to the EU ETS (see a short explanation here). These costs will remain significant, even when consuming decarbonised electricity or signing long-term power contracts. Also, including indirect emissions in the CBAM increases the risk of circumvention and will not lead to a reduction in global emissions. Rather the opposite!
We therefore support the final agreement on the CBAM which initially excludes the application of the CBAM on indirect emissions for sectors today eligible to indirect costs compensation under EU state aid rules. The inclusion of indirect emissions in the CBAM should be considered only once the EU electricity grid is close to being completely emission-free (very likely not before 2035) and all circumvention risks and downstream impacts have been assessed across the entire European aluminium value chain. This should include as well a detailed assessment on the consequences of the inclusion of more products upstream or downstream, including precursors such as alumina (see a paper about this topic here).
European aluminium is now closely working with the European Commission and broader stakeholders on the rules for the initial emissions’ reporting period applicable to importers beginning in October 2023. A first review of the mechanism is expected in 2025.
For further information:
The EU ETS is the cornerstone of European climate policy and introduces a carbon price on the emissions of Alumina refining and Primary Aluminium installations as well as several aluminium transformation and recycling plants across Europe (EU27+EFTA), with a total rated thermal input above 20 MW.
ETS Guidelines
According to the EU ETS Directive, Member States can grant State aid to compensate some energy-intensive industries for carbon costs arising from indirect emissions, specifically from high electricity prices due to power generators passing on the cost of buying ETS allowances to consumers. Because of our industry’s exposure to carbon leakage, due to our trade and electro-intensive nature, aluminium producers are exposed to the cost of electricity (representing on average up to 40% of production costs for a primary smelter) and thus eligible to ETS State Aid indirect costs compensation. In 2021 the EU Commission finalised the revision of the EU State Aid Guidelines for Phase IV (2021-2023). The total indirect cost compensation paid out by EU member states (with a scheme in place) to all eligible sectors amounted to EUR 2.38 billion. Of the few aluminium smelters still operating in Europe, almost all are located in a country with a national compensation scheme. This shows how crucial national indirect cost compensation is for preserving production in Europe.
European Aluminium is supporting EU and national authorities in designing and approving national schemes to protect the industry against carbon and investment leakage.
ETS reform & preparing for phase V (post 2030)
In May 2023, the EU completed the European Emission Trading System (ETS) Reform, affecting the system for its Phase IV: 2021-2030) and introducing from 2027 as well an ETS II system on small aluminium industrial installations not affected by ETS I (indirect effect on their fuel suppliers).
Our association is now working closely with the European Commission on the implementation of the revised rules providing carbon leakage protection to trade exposed and energy intensive industries such as aluminium production. These concern the Free Allocation Rules (FAR) introducing efficiency benchmarks defining the amount of free ETS allowances allocated to the best performing installations and related conditionality requirements, as well as monitoring the phasing in of ETS II.
As members of the European Commission’s ETS Innovation Fund Expert Group, we are also actively involved in ensuring that the EU ETS Innovation Fund rules and future calls can increase the number of projects to support the transition towards a more circular and decarbonised aluminium value chain.
More recently, the European Commission has also began work on the 2040 target, which will entail new changes to the future ETS post 2030. The current design and future trajectory of the EU ETS and the MSR threaten the viability of Europe's aluminium sector—a strategic industry under the Critical Raw Materials Act (CRMA), Net Zero Industry Act (NZIA), and crucial for the Europe’s decarbonisation and security objectives. Post-2030 reforms must preserve industrial competitiveness, introduce flexibility, and align with the sector’s decarbonisation realities.
For further information:
State Aid can be a powerful instrument to accelerate the transformation of our industry, especially by supporting key investments and research in decarbonisation technologies that are not yet available at scale on the market today and providing regulatory relief, where appropriate, for trade intensive, circular and electro-intensive sectors like aluminium that are exposed to international competition and to carbon leakage.
The recently adopted State Aid Framework accompanying the Clean Industrial Deal (CISAF) is a promising tool to allow Member States to support the development of clean energy, industrial decarbonisation and clean technology for the aluminium value chain. For more information on the adoption of the CISAF see also the press release and fact sheet, as well as an explanatory overview of support measure. CISAF applies as of 25 June 2025, and remains in force until 31 December 2030.
Also, the 2022 State Aid Guidelines for Climate, Energy and Environment (CEEAG), remain crucial to ensure the necessary national and EU funding to achieve the Green Deal’s decarbonisation objectives, regulated via the “Fit For 55” legislative package while accelerating the transformation of energy-intensive and circular industries like aluminium. In particular, the possibility for targeted Renewable Energy Sources (RES) charge reductions under EU State Aid Rules has played a crucial role in limiting carbon leakage for our sector, given that aluminium smelters are particularly sensitive to any increase in the cost of electricity.
We are providing policymakers with all the necessary data and evidence to ensure that the CEEAG and CISAF are adequately implemented to ensure European aluminium producers access predictable support between now and the end of the decade.
For further information:
Since October 2021, the EU has lost 50 % of its primary aluminium production- equivalent to 1.1 million tonnes – because of rising electricity costs. This capacity has been replaced by increase in third country capacity, leading to massive increases of global GHG emissions. Our industry is ready to work with national governments and the Commission to phase out Russian fossil fuel imports while ensuring adequate gas and electricity supplies next winter. We see this as an opportunity for boosting renewable energy capacity across the EU, which in turn spurs the demand for our metal because of its critical role in clean energy technologies.
As an electricity-intensive industry that also heavily relies on gas, any measure to reduce energy consumption will greatly impact our industry, particularly as there are few substitution possibilities in the short term. Measures must be carefully tailored and be introduced alongside adequate state aid. Moreover, further development of storage technologies or other forms of dispatchable low-carbon electricity generation (such as PPAs) is needed to address the challenge of intermittent renewable generation.
We must ensure that we do not shift from energy dependency to a broader raw material dependency, making our economy and downstream industries weaker and less resilient than our global competitors.
To deliver on the EU’s decarbonisation targets and secure an energy transition independent from Russian fossil energies, the European production of aluminium will need to be boosted. Aluminium is at the foundation of solar panels, wind turbines, electric vehicles, grid infrastructure and much more. All these technologies, identified in the Commission’s Green Deal Industrial Plan, are dependent on our metal. As an example, for every MW of solar capacity deployed, 21 tonnes of aluminium are needed. Increasing solar PV capacity from today’s 136 GW to 320 GW by 2025 and 600 GW by 2030, as proposed by the EU Solar Strategy, will require an additional 4 and 10 million tonnes of aluminium respectively. To successfully implement the European Green Deal, studies show that the aluminium demand – just for the production of clean tech - will reach 5 million tonnes per year by 2040, equivalent to 30% of Europe’s total aluminium consumption today. To make sure the green transition is made in Europe, the Net Zero Industry Act, recently proposed by the European Commission, needs to support the growth of entire supply chains, from raw materials through finished products.
We will work together with the European institutions to secure that the green transition is supplied by green aluminium made in Europe.
For further information:
As a circular material with permanent properties, aluminium has been designated as a sustainable economic activity under the EU Taxonomy, which will facilitate investments in our industry for financial undertakings. European Aluminium provides its expertise to EU policy makers to ensure the new framework is smoothly implemented and creates an adequate and efficient framework tailored to our industry.
In particular, our association focuses on developing efficient criteria for the designation of sustainable aluminium to ensure that European producers benefit from this new mechanism.
For further information:
The Energy Performance of Buildings Directive (EPBD) promotes improving the energy performance of buildings in the EU. It requires Member States to apply a methodology for calculating the energy performance of buildings and to set minimum performance requirements for new buildings, buildings undergoing major renovations and for building elements.
The revised EPBD was published in May 2024 and focuses on increasing the rate of renovation in the EU, particularly for the worst-performing buildings, and covers 4 focus areas including decarbonisation.
The decarbonisation focus area includes the calculation and disclosure of whole life-cycle carbon emissions for new buildings, from 2028 for the ones above 1000 m2, and from 2030 for all other new buildings.
In June 2025, the European Commission released its guidance about Life-cycle global warming potential of new buildings in the context of national roadmaps and the setting of national limit values.
As this guidance document allows Members States to adjust the scope of life-cycles stages or modules covered by the limit values, European Aluminium encourages them to include the environmental benefits from reuse and recycling at end-of-life in the scope. This would help to avoid that new buildings built today become the waste of tomorrow.
(Whole Life Carbon of Buildings video here and position paper on Integrating end-of-life circularity savings into life cycle GHG emissions assessment is critical)
When it comes to the methodology for calculating the energy performance of buildings and the minimum performance requirements for building elements, the European Commission also released a dedicated document in June 2025, which includes a guidance about transparent building elements...
This guidance rightly points to the so-called “energy balance method” which includes both the energy losses related the thermal transmittance of windows (U-value) and the solar gains related to their solar factor (g-value) thanks to their transparent area, but unfortunately still recommends setting maximum U-value first, instead of setting maximum energy-balance values…
The guidance however includes the good example of two Members States who have already adopted energy-balance-based limit values.
(How to assess the thermal performance of windows video here and
infographics)
Finally, while the main reason for revising the EPBD was to generate a “Renovation wave”, increasing renovation rates to 2 or 3% of EU buildings per year, today’s situation is quite embarrassing, with a depressed construction market. We call on EU and National authorities to unlock this situation by supporting renovation of the EU building stock, in line with the energy-efficiency-first principle. Click here for more on this.