The European Commission has presented its updated EU Emissions Trading System (ETS) benchmarks for the 2026–2030 period, triggering strong criticism from European Aluminium, which warns the changes could undermine aluminium recycling and critical raw material supply chains in Europe.

The association argues that the revision risks weakening the EU’s circular economy ambitions at a time when policymakers are seeking to expand domestic clean industrial capacity and secure strategic raw materials. It is calling on the Commission and Member States to exclude aluminium recycling and alumina refining from the planned reduction in heat and fuel fall-back benchmarks, and instead maintain 2021–2025 benchmark levels until sector-specific benchmarks are developed for the post-2030 phase.

Under the EU Emissions Trading System (ETS), benchmarks determine the level of free emissions allowances allocated to energy-intensive industries during decarbonisation. However, aluminium recycling and alumina refining are currently assessed using generic heat and fuel fall-back benchmarks rather than dedicated product benchmarks, which the industry says fails to reflect operational realities.

According to European Aluminium, the updated framework effectively represents up to a 50% reduction compared with Phase 3 benchmark levels, significantly increasing compliance costs for recyclers and refiners. These installations require continuous high-temperature processes, while options such as large-scale electrification or alternative fuels like biomass remain technically limited or commercially unviable.

The association also stresses the environmental efficiency of recycling, noting that secondary aluminium production uses around 95% less energy than primary aluminium production, making it one of the most effective decarbonisation pathways in European industry.

Director General Paul Voss said the revised approach risks becoming “all stick and no carrot,” warning that misaligned benchmarks could increase production costs in a globally priced aluminium market where costs cannot easily be passed on. This could lead to carbon leakage, reduced investment in Europe, and increased imports.

European Aluminium further highlights strategic risks linked to alumina refining, which enables the recovery of gallium, a critical mineral for semiconductors, defence systems, and advanced technologies, warning that weaker economics could threaten EU supply security.