We were all happy when we heard about the scrap exemption from the CBAM regime. But instead, it turned out to be a two-edged sword. If an EU business imports scrap and manufactures secondary aluminium, it will have to pay the tax for the secondary aluminium manufacturing, in accordance with the ETS system. If the business decides to import secondary aluminium, it still has to pay for CBAM. So, is shelter from tax a mere illusion for European aluminium businesses?
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From January 1, 2026, Fastmarkets will include the European Union’s (EU’s) Carbon Border Adjustment Mechanism (CBAM) costs in its secondary aluminium billet premium, DDP Europe (MB-AL-0383) and primary 6063 extrusion billet premium, in-warehouse Rotterdam (MB-AL-0002) assessments.
This change accords with the start of the definitive phase of the EU’s CBAM regime, when importers will begin paying for embedded carbon via CBAM certificates rather than merely reporting emissions. The inclusion of CBAM costs is intended to ensure that reported premiums align with how spot DDP aluminium billets are expected to trade from 2026 onward in accordance to the supply, demand and carbon cost fundamentals.
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