The EU’s carbon tariff on aluminum imports from China took effect January 1, 2026, raising export costs.

The EU’s Carbon Border Adjustment Mechanism (CBAM), effective January 1, 2026, is increasing costs for China’s aluminum exports by imposing carbon tariffs on imported goods. While indirect emissions from electricity—accounting for about 80% of aluminum’s emissions—are currently excluded due to EU electricity subsidies, their future inclusion remains uncertain but unlikely soon. Expansion to other metals like copper or magnesium is improbable in the near term, as they don’t meet EU ETS criteria. China’s national carbon market, with low prices around $10 per ton and no active electrolytic aluminum trading, offers limited offset potential. Over time, market development in China may reduce CBAM’s impact, but immediate relief is limited.