Starting from January 1, 2026, the EU's Carbon Border Adjustment Mechanism (CBAM) officially entered the "charging period", with six types of products, namely steel, cement, aluminum, fertilizers, electricity and hydrogen, being included first.
According to the plan of the European Commission, by 2028, the coverage of CBAM is expected to be expanded to approximately 180 steel and aluminum-intensive downstream products, including washing machines, auto parts, and mechanical equipment.
Industry insiders say that the emissions covered by the EU's Carbon Border Adjustment Mechanism (CBAM) vary among different products. Thanks to the exemption threshold, the actual payment obligation will be concentrated on enterprises that cooperate with large EU importers. In the face of the new regulations, relevant Chinese enterprises need to establish a differentiated carbon emission data management system as soon as possible. China's first-mover advantage in low-carbon transformation and its early industrial layout will help enterprises maintain their competitiveness in the face of stricter green trade barriers.
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Impact on aluminum export enterprises: 1. Cost pressure and decline in competitiveness: CBAM will impose additional carbon costs on related export products, equivalent to imposing carbon tariffs on high-emission products. The carbon cost for each ton of aluminium exported by the aluminium industry will increase by approximately 213 euros. If calculated at a carbon price of 50 euros per ton of CO₂, the export of Chinese aluminum products to the EU may generate approximately 980 million to 1.12 billion US dollars in CBAM taxes and fees, equivalent to 29% to 33% of the value of the exported products. Faced with such an impact, some enterprises may be forced to compress their profit margins and even consider reducing their export share to Europe, and instead explore other markets.
2. Large enterprises are more likely to comply with regulations, and small and medium-sized enterprises are more likely to be affected: The newly introduced 50-ton annual import exemption threshold by the EU has saved many small-scale export businesses from the direct impact of the CBAM. Based on the assessment of China's export structure, the steel and aluminum suppliers that directly bear the CBAM costs are mainly concentrated in large and medium-sized enterprises at the top, estimated to be around dozens to hundreds. A large number of small and medium-sized export enterprises do not need to pay the CBAM fees directly for the time being because the trade volume of their corresponding EU importers is relatively small (below the threshold). However, small and medium-sized enterprises also face two problems: on the one hand, they may need to cooperate with large importers to submit carbon emission data, and even if they do not pay directly, they still have the obligation to declare. On the other hand, with the potential expansion of the EU, when downstream products (such as mechanical parts, etc.) are included in the future, enterprises that were originally not affected may also be drawn into the CBAM scope. Therefore, regardless of their size, exporters should enhance their emphasis on carbon footprint management.
3. Disadvantages of high default values: The default carbon emission values for products set by the European Union are generally not friendly to developing countries. Take China as an example. The European Commission is said to have failed to fully consider China's progress in emission reduction in recent years in the default value calculation, setting the benchmark emission intensity for several products too high and plans to further increase it in the next three years. This means that if Chinese enterprises fail to provide detailed data to prove their relatively clean production levels, they will be charged a higher carbon cost than the actual emissions, putting them at a disadvantage in terms of price. The Ministry of Commerce clearly pointed out that this move by the EU does not conform to China's current actual level and future trend, and constitutes unfair discrimination. For enterprises, this policy inclination forces them to invest resources in carbon verification to avoid the adverse impact of the "one-size-fits-all" default values. Conversely, those enterprises that take the lead in establishing a carbon management system and can report lower actual emissions will significantly reduce their CBAM payments and gain a competitive edge. It can be foreseen that export enterprises with high carbon efficiency and transparent data will be more resilient in the EU market.
4. Industry Demonstration Effect and Global Follow-up: The introduction of CBAM by the European Union is a first in the world, attracting the attention of other major economies. Although the United States and others have not yet implemented similar carbon tariffs, it cannot be ruled out that they will follow suit in the future. A considerable proportion of China's manufacturing exports are directed towards markets such as the United States and Southeast Asia. Industry insiders point out that the EU's "green trade barrier" measures have a spillover demonstration effect, and other developed countries may successively strengthen carbon constraints in their trade rules. Therefore, Chinese export enterprises need to have a strategic understanding of CBAM. They should not only adapt to EU standards but also anticipate the major trend of the gradual "decarbonization" of global trade. Laying out low-carbon production in advance and obtaining internationally recognized carbon footprint certification can help seize the initiative in similar measures in the future. In addition, the game between China and Europe over the CBAM may also be carried out through multilateral frameworks such as the WTO, and policy variables still exist. Enterprises should closely monitor the progress of government negotiations. Once the rules are adjusted (such as the expansion of carbon price deductions or exemptions for developing countries), they should promptly assess the impact and adjust their response plans.
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The impact on the aluminum industry: Aluminum is one of the varieties that China exports to Europe in large quantities. In 2024, China's total aluminum exports reached 6.267 million tons, of which over 800,000 tons were exported to Europe. As the EU has no trade restrictions on aluminum products, the CBAM will have a direct impact on domestic aluminum enterprises.
In recent years, major aluminum enterprises such as Aluminum Corporation of China (CHALco), Shandong Weiqiao, and Nanshan Aluminum have been promoting the clean-up of their production processes. For instance, they have increased the proportion of aluminum produced by hydropower, enhanced the use of recycled aluminum, and calculated their carbon footprints in accordance with international standards.
According to industry experts, the export volume of these leading aluminum enterprises is not large compared to their total output. Moreover, the carbon intensity of their products is far lower than the default value set by the European Union, so the actual impact of CBAM is limited. Take the high-end aluminum plates exported by Nanshan Aluminum to the European Union as an example. A portion of its production electricity comes from its self-owned photovoltaic power station, and the carbon footprint of its products is significantly lower than the industry average. During the transition period, the company has proactively provided carbon footprint reports to European clients and sought third-party certification to ensure that actual values can be declared after 2026.
The Green Development Committee of the Nonferrous Metals Association disclosed that many large aluminum enterprises, considering the future, have established internal carbon emission databases to have a clear understanding of the unit emissions of various grades of aluminum materials. Once the CBAM charges commence, these data will be directly converted into the basis for cost calculation. The case of the aluminum industry shows that early intervention and prioritizing data are effective means to actively respond to carbon tariffs.
