On Friday, December 5, Jean-Marc Germain, CEO of aluminum producer Constellium, urged the European Union to abandon its impending Carbon Border Adjustment Mechanism (CBAM), warning that the tax could push the EU’s aluminum sector into long-term decline by raising costs and inadvertently benefiting overseas suppliers with higher emissions.
“With regard to CBAM, the first thing we must do is eliminate it—get rid of it entirely,” Germain said. “The core issue is Europe’s competitiveness. We are deliberately shooting ourselves in the foot.”
Constellium is currently one of the world’s largest suppliers of aluminum products for aerospace, automotive, and packaging industries. The company primarily sources aluminum produced in Europe and processes it in local facilities—aluminum that is exempt from the CBAM. However, concerns over the upcoming carbon border tax and market anxieties about supply disruptions from smelters in Iceland and Mozambique have driven the European spot aluminum premium to a 10-month high.
Germain noted that the rising premium translates into higher costs for aluminum products regardless of origin, making all aluminum supplies more expensive. For Constellium’s industrial customers in Europe, this means elevated cost-driven inflation.
He also highlighted loopholes in the CBAM design: overseas producers can avoid the tax by shipping scrap metal instead of primary aluminum or by directing their low-carbon aluminum to Europe while continuing to supply high-carbon aluminum to other regions.
