The Carbon Border Adjustment Mechanism (CBAM) has been discussed in aluminium and equivalent business entities as a compliance exercise. From 2026 onward, it has already started to become something else entirely, especially for aluminium extrusions. It is now a stratified pricing layer that compounds year after year.

As felt already through trade numbers, there will be no overnight tariff shock. Instead, the impact will emerge contract by contract as importers begin purchasing CBAM certificates linked to the weekly average EU ETS carbon price under Regulation (EU) 2023/956. For aluminium profiles under CN code 7604, the mechanism will initially cover Scope 1 (direct) emissions only, with financial settlement beginning in 2026 after the current transitional reporting phase.

The numbers circulating in industry discussions suggest price increases ranging from EUR 0.06 to EUR 0.28 per kg between 2026 and 2028, depending on origin. Are these realistic? The answer lies in three variables: extrusion emission intensity, the EU ETS price trajectory, and the penalty for default emission values.

CBAM influenced actual prices

Unlike primary aluminium, where global average emissions stand near 13-17 tCO₂ per tonne according to the International Aluminium Institute, extrusion is a downstream activity with comparatively lower direct emissions. Scope 1 emissions in extrusion stem mainly from gas-fired billet reheating furnaces, thermal ageing processes and surface treatment systems.

Industry studies and technical benchmarks typically place downstream including extruded aluminium Scope 1 emissions in the range of 0.3-0.9 tonnes of CO₂ per tonne, depending on fuel mix and plant efficiency. Facilities relying heavily on natural gas tend to sit mid-range; those using older combustion systems or higher heat demand can approach 1.2-1.5 tCO₂ per tonne in extreme cases.

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Under CBAM, the formula to calculate

CBAM cost per tonne = Scope 1 intensity × EU ETS price

Converted to EUR per kilogram:

EUR per kilogram impact = (Intensity × ETS price) ÷ 1,000

This means carbon price volatility directly transmits into extrusion import pricing

A sensitivity test of CBAM exposure for aluminium extrusions reduces to two variables: embedded direct emissions (tCO₂ per tonne of product) and the EU ETS price (EUR per tonneCO₂).

Using three emission bands [0.5 tCO₂ per tonne (low), 0.8 tCO₂ per tonne (mid) and 1.2 tCO₂ per tonne (high)], the outcomes under an EUR 80 ETS scenario are straightforward. At EUR 80 per tonne CO₂, the carbon cost equals EUR 40 per tonne, EUR 64 per tonne and EUR 96 per tonne respectively, translating to EUR 0.04 per kilogram, EUR 0.064 per kilogram and EUR 0.096 per kilogram. Under this carbon regime, CBAM adds roughly EUR 0.04-0.10 per kilogram to extrusion imports.

If the ETS rises to EUR 150 per tonne CO₂, the slope steepens. The same emission bands generate EUR 75 per tonne, EUR 120 per tonne and EUR 180 per tonne — equivalent to EUR 0.075 per kilogram, EUR 0.12 per kilogram and EUR 0.18 per kilogram. In this case, CBAM exposure shifts to a EUR 0.075-0.18 per kilogram range.

Testing the upper-end projections circulating in the market (EUR 0.15-0.23 per kilogram by 2028) requires reverse calculation. A EUR 0.23 per kilogram impact implies a EUR 230 per tonne of carbon cost. That level is only achievable under combinations such as 1.5 tCO₂ per tonne at EUR 150 (yielding EUR 225 per tonne), 1.3 tCO₂ per tonne at EUR 180 (yielding EUR 234 per tonne ), or 1.0 tCO₂ per tonne at EUR 230 (yielding EUR 230 per tonne). In quantitative terms, EUR 0.20-plus requires ETS prices at or above EUR 150-180, emission intensities near or above 1.3-1.5 tCO₂ per tonne, or both.

Current extrusion benchmarks suggest most efficient remelt operations operate around 0.4-0.6 tCO₂ per tonne in direct emissions, gas-heavy remelters fall within 0.7-1.0 tCO₂ per tonne, and structurally fossil-exposed facilities may exceed 1.2 tCO₂ per tonne. Under a EUR 100-120 ETS environment and 0.6-0.8 tCO₂ per tonne intensity, CBAM exposure clusters closer to EUR 0.06-0.10 per kilogram rather than EUR 0.20 per kilogram.

Structural variables will determine the 2028 outcome. CBAM initially applies to direct (Scope 1) emissions; expansion to indirect electricity emissions would raise embedded intensity for power-exposed producers. The phase-out of EU ETS free allowances between 2026 and 2034 affects cost convergence between EU and non-EU suppliers. Verified emissions data and deductions for carbon prices already paid in the country of origin can reduce the number of payable CBAM certificates. Finally, the ETS trajectory itself remains policy-driven and macro-sensitive.

On current mid-range assumptions, the defensible 2026-2028 CBAM impact band for aluminium extrusions sits closer to EUR 0.05-0.12 per kilogram. Achieving EUR 0.15-0.23 per kilogram requires a tight ETS market above EUR 120-150, combined with high embedded emission intensities.

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ETS trajectory and its ripple effect

The EU ETS has traded between EUR 60 and EUR 98 in recent years on the European Energy Exchange, with structural tightening under Fit-for-55 reforms supporting higher long-term pricing. However, forward curves do not currently imply a guaranteed march toward EUR 150.

If ETS stabilises in the EUR 70-90 range, CBAM would add EUR 0.05-0.10 per kilogram for most suppliers — materially lower than some 2028 projections.

This is where sensitivity becomes strategic: extrusion buyers who model only a EUR 150 scenario may overestimate risk, while those budgeting at EUR 80 may underestimate exposure if policy tightening accelerates.

The hidden multiplier

A critical structural feature of CBAM is the treatment of unverified emissions data. If suppliers fail to provide audited plant-level figures, importers must use conservative default values set under implementing regulations.

Industry practitioners estimate that verified data can reduce payable CBAM by 15-30 per cent versus default benchmarks.

For a 1.0 tCO₂ per tonne default scenario at EUR 120 ETS:

• Default: EUR 0.12 per kilogram
• Verified reduction (20 per cent): EUR 0.096 per kilogram.

For an export volume of 50,000 tonnes, that difference equals EUR 1.2 million annually.

CBAM therefore incentivises carbon accounting as much as carbon reduction.

Also read: CBAM compliance: A checklist for importers in the European aluminium market

Structural shift and not a tariff shock

What makes CBAM strategically potent is not its first-year impact but its escalator design.

As free allowances under the EU ETS phase out for domestic producers between 2026 and 2034, carbon pricing becomes embedded across the European aluminium value chain. Importers face direct certificate purchases from 2026 onward.

If ETS rises, whether through tighter cap reductions or speculative positioning, CBAM transforms from a marginal surcharge to a competitive filter.

At EUR 0.15 per kilogram, a 20,000-tonne annual extrusion contract absorbs EUR 3 million in carbon cost alone.

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Summing up

Under conservative EUR 80 ETS conditions, extrusion imports face EUR 0.04-0.10 per kilogram CBAM additions. Whereas, under aggressive EUR 150 conditions, the range expands to EUR 0.075-0.18 per kilogram, potentially higher if default values apply.

For buyers, the prudent strategy is not to anchor to a single forecast, but to model sensitivity bands and engage suppliers on verified emissions disclosure now. Because from 2026 onward, aluminium extrusion pricing into Europe will no longer be just about metal spreads, freight and duties.