The UK’s 2025 Autumn Budget has sent a clear signal to the metals sector, delivering both opportunities and challenges for aluminium manufacturers and processors. While some measures offer long-term support, industry leaders warn that urgent action is needed to address immediate cost pressures.

CBAM Delays Provide Temporary Relief

One of the headline announcements affecting aluminium businesses is the delay in including indirect emissions, such as electricity use,under the UK’s Carbon Border Adjustment Mechanism (CBAM). Originally planned for 2027, these emissions will now be considered from 2029 at the earliest. This deferral provides breathing space for energy-intensive industries while allowing time to prepare for compliance.

Additionally, the government has revised CBAM’s technical framework. Key changes include sector-average emissions-based free-allowance calculations, recognition of carbon costs already paid under other CBAM regimes, and exemptions for UK-produced precursor goods in complex imports. These updates aim to prevent double-charging and reduce the regulatory burden on aluminium refiners and processors.

Energy Support Is Still Some Years Away

The Budget also confirmed the government’s plan to launch the British Industrial Competitiveness Scheme (BICS), designed to cut electricity costs for manufacturers. However, support will not begin until 2027, leaving many firms facing uncompetitive energy costs in the near term. The delay has prompted concern from industry groups, highlighting the ongoing risk of deindustrialisation if energy costs remain unaddressed.

Industry Response and ALFED Action

Nadine Bloxsome, CEO of the Aluminium Federation (ALFED), emphasised: “The Budget acknowledges pressures on the aluminium sector, but support such as BICS needs to come sooner. Some businesses will not have that long to wait.”

ALFED is actively engaging with government and industry partners to shape the sector’s response. Efforts include:

• Coordinating a sector-wide response to the BICS consultation.
• Building a robust evidence base through the UK Aluminium Alliance to support energy efficiency, scrap recycling, and downstream processing as part of the national industrial strategy.
• Monitoring CBAM implementation closely, gathering insights from the “One Month to Go Until EU CBAM: Final Readiness Summit” to feed into UK policy guidance.

ALFED encourages members to review energy usage forecasts, prepare for CBAM compliance, and share data on energy and scrap flows to support policy work.

A Call for Immediate Engagement

Industry bodies such as Make UK and the Cast Metals Federation have warned that long-term pledges alone will not safeguard competitiveness. Rising energy and labour costs continue to threaten manufacturers’ survival, making immediate engagement and proactive planning critical.

While Budget 2025 sets some positive signals, the real challenge lies in addressing today’s energy costs. ALFED’s message is clear: now is the time for aluminium businesses to act, share insights, and work together to ensure the sector remains competitive and sustainable for the decade ahead.