A 50% cut in ETS benchmarks could jeopardize European aluminium recycling

The day after the announcement of the "mild" ETS benchmark proposal, a sharp reaction comes from European Aluminium: for aluminium recycling and alumina production, the update means a 50% cut in free allowances compared to Phase 3 values.

What is the problem?

These processes do not have dedicated product benchmarks and fall under generic "heat and fuel fallback" benchmarks applied across the board. However, they do not reflect the technical reality:

- aluminium recycling and alumina refining require high and constant temperatures

- biomass does not work technically at scale, electrification is short‑term limited

- most of the efficient savings have already been realized

Aluminium recycling uses about 95 % less energy than primary aluminium – yet it is now financially penalised. According to the Union, the result will be a less competitive European recycling sector versus imports of primary aluminium from third countries. Global emissions will not decrease – they will merely shift.

Recycled aluminium is used for semiconductors and the defence industry, where China dominates 95 % of world production. Weakening European refining = weakening the EU’s strategic independence.

The Union proposes freezing the benchmarks at the 2021–2025 level for these specific processes until dedicated benchmarks for post-2030 are developed.

It claims that the proposal contains classic unintended consequences – namely, that the EU wants to strengthen the circular economy, reduce dependence on critical raw materials, and decarbonize. But the "technical" benchmark update goes against all three goals simultaneously.

Source: https://www.alcircle.com/press-release/ets-benchmark-update-risks-undermining-aluminium-recycling-and-critical-raw-materials-supply-118407