Aluminium: EU ETS reform raises cost risks – Commerzbank

May 13, 2026 fxstreet.com

⦿ Executive Snapshot

What: EU ETS reform may raise costs for aluminium recyclers and refineries significantly.
Who: Commerzbank, European Aluminium industry group, Norman Liebke.
Why it matters: The reform could undermine the competitiveness of aluminium recycling in Europe, affecting profitability in a globally priced market.

The EU ETS reform includes new benchmark calculations which could sharply increase costs for recyclers and refineries.
Fallback benchmarks are projected to decrease by 34% for the 2026–2030 period compared to 2021–2025 values, necessitating the purchase of more allowances.
The industry group European Aluminium has expressed concerns that higher costs from the EU ETS reform cannot be passed on, threatening profitability.

The EU ETS reform aims to ease the burden on companies while providing more time for decarbonization efforts, highlighting a shift in environmental policy.
The global pricing of aluminium complicates the ability of European companies to absorb increased costs without losing competitiveness against international markets.

Immediate market implications include potential increases in operational costs for European aluminium recyclers, which could reduce their market share.
Long-term implications may involve a decline in aluminium recycling rates in Europe, affecting sustainability goals and increasing reliance on primary aluminium production.

Regulatory risks include potential backlash from the industry if the reform is perceived as detrimental to competitiveness.
Technical risks involve the ability of companies to adapt to new benchmark calculations and manage increased costs effectively.

Key upcoming milestones include the finalization and implementation timeline of the EU ETS reform and its benchmark calculations.
Monitoring aluminium pricing trends globally will provide insight into the market's response to the increased costs associated with the EU ETS reform.

What is the EU ETS reform?

The EU ETS reform involves new benchmark calculations that may significantly increase costs for aluminium recyclers and refineries.

Why does the EU ETS reform matter for aluminium recyclers?

It could undermine their competitiveness in a globally priced market, affecting profitability as higher costs may not be passed on to consumers.

How will the EU ETS reform impact aluminium recycling rates in Europe?

The reform may lead to a decline in recycling rates, which could hinder sustainability goals and increase reliance on primary aluminium production.

Who is concerned about the EU ETS reform's impact?

The industry group European Aluminium has expressed concerns that the higher costs from the reform threaten the profitability of recyclers.