Glen Hodgson, Founder and CEO of Free Trade Europa, with over twenty-five years of experience in communications, public affairs, and lobbying, focuses on promoting free trade, liberalisation, and the rule of law within the European Union and internationally. Glen was previously responsible for the Nordics, Baltics and Central & Eastern Europe within an international communications agency. Prior to this, he worked for European institutions as well as governments, blue-chip international companies, startups and NGOs as a lobbyist, strategist and communications advisor. In this interview, we get a detailed insight into Free Trade Europa's foundation, policies and transitions, and the role of China and Russia in the EU's green transition initiative. In this interview, he sheds light on his stance on CBAM, the overall EU's trade scenario at present and, according to him, the path forward.

AL Circle: The EU’s Carbon Border Adjustment Mechanism (CBAM) has entered full implementation as of January 1, 2026, with its first phase covering goods such as aluminium and steel. Many exporting countries, including India, are facing compliance and cost pressures due to carbon pricing on imported goods. From Free Trade Europa’s perspective, how effective do you think CBAM will be in achieving its climate objectives without distorting global trade patterns, particularly in aluminium markets?

Glen Hodgson: To address the latter part of your question first, I do not believe CBAM will be very successful at all. I have been critical of the instrument from the outset, and the realities of its implementation do not improve the outlook. There remain too many unresolved issues regarding its potential impact.

There are loopholes within the legislation, and the level of bureaucracy, administration, and data collection required is extremely heavy. The verification processes demanded under this new legislation are burdensome and cumbersome. If the objective is to implement policies that are lighter, more efficient, and supportive of industry and trade, then CBAM moves in the opposite direction.

As a result, I believe there is a serious problem in terms of overall market impact. This instrument is not well suited to achieving the climate and emissions goals that were set at the beginning.

AL Circle: According to AL Circle’s outlook, supply disruptions in the aluminium market may remain subdued in Q1 2026 as CBAM takes effect, with greater pressure emerging thereafter. In your view, how might CBAM influence global supply chains and pricing signals for aluminium exporters outside the EU in the near term and later this year?

Glen Hodgson: In the short term, the primary impact will be the cost of compliance. Exporters will face significant expenses simply to meet the administrative and reporting requirements. Beyond that, in the medium to longer term, exporters will begin to reassess their strategies—whether they want to continue prioritising the EU market given the regulatory burden, or instead seek alternative export destinations.

Countries such as India and China have already characterised CBAM as a thinly veiled protectionist measure rather than a genuine environmental policy. There is a certain degree of sympathy for that viewpoint. I believe a challenge at the World Trade Organization is very real and likely, precisely because CBAM does little to support global supply chains or harmonised global standards.

Ultimately, the costs will also fall on European businesses and consumers. Downstream sectors such as construction and automotive manufacturing will face higher aluminium prices, creating knock-on effects across multiple industries. These impacts will be felt deeply and unevenly, and overall, I do not see this as a positive development.

AL Circle: We have observed an unusual trend recently, where alumina prices are declining while aluminium prices are rising. Historically, the two have tended to move in the same direction. Why do you think this divergence is occurring?

Glen Hodgson: It is an unusual situation, and I must admit that it does not follow standard market patterns. I would expect the two prices to move broadly in tandem. At this stage, I find it difficult to identify a clear structural reason for this divergence.

It may simply reflect a temporary market distortion rather than a durable trend. At present, I do not see a convincing explanation for why these two prices would decouple in a sustained way.

AL Circle: You have consistently advocated for open trade and reduced barriers, yet climate policy is increasingly intersecting with trade regulation. How should policymakers balance liberalised markets with the imperative of carbon reduction, particularly in energy-intensive sectors?

Glen Hodgson: There is no question that climate, pollution, and emissions need to be addressed. However, this must be done in a smart and pragmatic way. Cooperation between legislators, industry, and third countries is essential.

When rules are designed in isolation, they inevitably lead to misunderstandings, unnecessary costs, and excessive bureaucracy. CBAM is a clear example of this. European legislators developed the mechanism without sufficient dialogue with industry and without meaningful engagement with third-country governments. The result is imperfect legislation and significant resentment once the rules are implemented.

This is an example of how not to proceed. What is needed instead is early dialogue, co-creation of rules, and a realistic assessment of what is achievable. The notion that regulations can simply be imposed and universally followed is outdated.

The European Union has long believed it can set global standards, not only in environmental policy but more broadly. That assumption no longer holds. Greater collaboration is required before such frameworks are put in place.

AL Circle: Critics argue that CBAM could increase costs for importers while providing uneven advantages to EU producers. What reforms would you advocate to avoid harming competitiveness or triggering retaliatory trade measures?

Glen Hodgson: One major issue is the emphasis on low-carbon and recycled aluminium. While this is attractive in principle, the reality is far more complex. The treatment of scrap imports and zero-emissions credits creates loopholes that are extremely difficult to administer effectively.

Moreover, CBAM currently covers only basic aluminium products such as ingots and sheets, while more complex downstream products remain excluded. This creates inconsistencies and opportunities to circumvent the system. The framework requires further refinement to be realistic and workable.

I believe that sustained pressure from third countries and industry will eventually force a scaling back of the mechanism. We have seen this pattern in other areas of EU legislation where rules that harm business and trade are later reviewed and amended. Once the negative impacts of CBAM become fully visible, adjustments will be unavoidable.

AL Circle: Do you see multilateral carbon pricing frameworks emerging, and how might they interact with unilateral mechanisms such as CBAM?

Glen Hodgson: I do expect movement in that direction, and I believe any effective approach will require coordination. However, there will inevitably be friction as unilateral and multilateral frameworks overlap.

The process will be imperfect, and tensions at the margins are unavoidable given the current trajectory. Nonetheless, greater alignment will eventually be necessary.

AL Circle: Countries such as India, whose aluminium and steel sectors are closely integrated with EU demand, now face new export challenges under CBAM. What strategies should these economies pursue to remain competitive?

Glen Hodgson: Continued dialogue with downstream supply chains, industry stakeholders, and European authorities is essential. Even though CBAM is now in place, there remains room to shape how it is implemented in practice.

Engagement with both EU-level and national authorities can help highlight the realities on the ground. Despite the framework being established, there is still negotiating space to pursue a more realistic and workable approach. The goal should be to make the best of a limited framework while pushing for practical adjustments.

AL Circle: Many countries already have their own carbon measurement and mitigation frameworks. Should these operate independently, or must they eventually come under a single umbrella?

Glen Hodgson: In theory, they should operate under a unified umbrella. In practice, what we see instead is a patchwork of overlapping and sometimes contradictory rules at European, national, and even local levels.

This complexity creates serious challenges for legitimate businesses. Compliance is time-consuming, costly, and confusing. The problem is not about gaming the system, but about navigating an inefficient and fragmented regulatory environment.

This “spaghetti bowl” of policies needs to be rationalised if businesses are to function effectively.

AL Circle: Given your mission to promote openness and efficiency, what policy recommendations would you offer the EU regarding CBAM and broader trade–climate regulation?

Glen Hodgson: Cooperation, collaboration, and genuine engagement with industry and third countries are fundamental. From the beginning, my view has been that CBAM should not have been introduced at all. While that position may be considered extreme, it reflects my concern with using draconian measures to achieve complex objectives.

Trying to solve nuanced problems with blunt instruments rarely works. Just because similar approaches are being pursued elsewhere does not mean they should be replicated.

A more practical, inclusive, and functional regulatory approach may be slower and less politically dramatic, but it is far more likely to succeed. Otherwise, regulations simply add cost and bureaucracy, encouraging businesses to ignore, challenge, or circumvent the rules.

In aluminium, in particular, the availability of genuinely low-carbon and recycled material remains limited. CBAM is designed for an idealised future rather than today’s reality, and that gap undermines its effectiveness. Policymakers may claim environmental success, but the real-world outcomes are likely to be far more muted.