Published by Global Banking & Finance Review®
Posted on December 12, 2025
3 min readLast updated: January 20, 2026
Add as preferred source on GoogleThe EU will increase emissions costs on aluminium and cement imports under its Carbon Border Adjustment Mechanism, starting January, to protect local industries.
By Kate Abnett and Tom Daly
BRUSSELS, Dec 12 (Reuters) - Imports of aluminium, cement and other commodities into the European Union could face higher costs than previously expected for CO2 emissions next year under draft EU plans to tighten its carbon border levy.
From January, the EU's Carbon Border Adjustment Mechanism (CBAM) will impose fees on imports of certain industrial products, based on the emissions embedded in their production.
The policy is designed to shield European producers against cheaper imports from countries with less ambitious climate rules. It will expose such imports to a carbon price equivalent to the one EU companies already pay for their emissions under the bloc's carbon market.
Brussels will calculate these costs using a standardised benchmark for the CO2 emissions intensity of each product, with lower benchmarks exposing imports to higher costs.
A draft European Commission proposal seen by Reuters showed Brussels plans to fix the benchmark for unwrought aluminium at 1.423 per ton of CO2, per ton of metal, down from 1.464 in a previous draft. Grey cement clinker's benchmark is 0.666, down from 0.693, while liquid ammonia fertiliser faces a 0.457 benchmark, versus 0.471 previously.
A second draft Commission document detailed the default emissions values the EU would use to calculate CBAM costs if producers fail to disclose their real emissions.
Primary aluminium from Mozambique - the EU's top supplier in January-August 2025 - would face a CBAM charge of around 168 euros/ton under default values, according to Reuters calculations based on the draft values and an EU carbon price of 80 euros/tonne. Imports from India and the United Arab Emirates would both face charges of about 51 euros/ton.
Aluminium on the London Metal Exchange currently trades at about $2,900 a ton.
The EU expects to adopt the CBAM benchmarks in early 2026, a Commission official told Reuters.
Brussels will propose other changes to CBAM next week, including measures to avoid companies circumventing it and new products that will face the fee.
Countries with their own CO2 pricing schemes will get a discount on their CBAM bill, which Brussels hopes will encourage governments to strengthen such policies. Since the EU announced its carbon border levy in 2021, countries including China, India and Brazil have begun developing or expanding their carbon pricing systems.
Steel is cheaper than aluminium, with hot-rolled coil prices at around 620 euros per ton, so importers will likely be more sensitive to additional charges.
The CBAM charges on hot-rolled coil will range from 80 euros per ton for South Korea to 174 euros for China, 270 euros for India and more than 600 euros for Indonesia, according to Morgan Stanley analysts. Initially, imports will only pay CBAM costs on a limited share of emissions, as the EU gradually phases in the measure.
An industry source, granted anonymity to discuss the draft proposals, said the EU's default values were intentionally harsh, to encourage companies to provide their own emissions data instead.
($1 = 0.8511 euros)
(Reporting by Kate Abnett and Tom Daly. Editing by Jane Merriman)
The Carbon Border Adjustment Mechanism (CBAM) is a policy by the EU that imposes fees on imports of certain goods based on the carbon emissions associated with their production.
CO2 emissions refer to the release of carbon dioxide into the atmosphere, primarily from burning fossil fuels, which contributes to climate change.
A carbon price is a cost applied to carbon emissions, intended to encourage businesses to reduce their carbon footprint by making polluting activities more expensive.
A benchmark in emissions trading is a standard measure used to assess the carbon intensity of products, which helps determine the fees imposed under carbon pricing mechanisms.
Grey cement is a common type of cement used in construction, characterized by its grey color, which comes from the raw materials used in its production.
Explore more articles in the Headlines category
