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EU Aluminium Industry
EU policy, regulation and market signals affecting the aluminium value chain — from bauxite and alumina supply to primary production, energy costs, CBAM, trade, recycling and downstream demand.
Aluminium is a strategic material for European transport, aerospace, construction, packaging, electricity networks, renewable energy, defence and advanced manufacturing.
Yet Europe's position in primary aluminium production has weakened. High electricity costs, international competition and greater reliance on imported metal have increased the importance of trade policy, carbon rules, recycling and access to secure raw-material supply.
Europe's aluminium position
The EU aluminium market remains economically important, but its primary production base has contracted substantially.
According to the Commission's recent assessment of energy-intensive industries, EU primary aluminium production was approximately 0.925 million tonnes in 2023, while the EU accounted for only around 3.8% of global primary aluminium output.
Since 2021, approximately half of European primary aluminium production capacity has been idled, illustrating the impact of high energy costs and international competitive pressure.
A structural trade deficit
Eurostat recorded €29.5 billion of EU imports of aluminium and aluminium articles in 2024, compared with €18.4 billion of exports.
This produced an EU aluminium trade deficit of €11.1 billion.
The main external suppliers were Norway, with €4.4 billion of exports to the EU, and China, with €3.9 billion, followed by Türkiye, Iceland and Switzerland.
The aluminium value chain
Electricity is the critical competitiveness factor
Primary aluminium smelting is among the most electricity-intensive industrial processes. Power prices therefore have an immediate effect on production costs and investment decisions.
Europe's electricity-price disadvantage relative to some competing regions has contributed to smelter curtailments and idling of primary-production capacity.
Bauxite, alumina and strategic supply
Aluminium supply security begins upstream. Europe depends heavily on external sources of bauxite, alumina and primary metal, exposing manufacturers to geopolitical and logistical risks.
The Critical Raw Materials Act lists bauxite/alumina/aluminium as both critical and strategic raw materials, reflecting aluminium's importance to Europe's industrial and energy transition.
The Steel and Metals Action Plan
Aluminium is directly covered by the European Steel and Metals Action Plan adopted in March 2025.
The plan addresses the main structural problems faced by Europe's metals industries: energy prices, carbon leakage, global competition, access to raw materials and scrap, industrial decarbonisation and investment.
CBAM and aluminium
Aluminium is one of the sectors covered by the Carbon Border Adjustment Mechanism. The definitive CBAM regime has applied since 1 January 2026 to covered aluminium imports.
Importers must account for the embedded carbon emissions of covered products, while corresponding EU ETS free allocation for European producers is progressively reduced.
Downstream extension moves forward
The EU is also moving to extend CBAM further downstream, an issue of particular importance for aluminium producers. Without downstream coverage, European primary and semi-finished aluminium producers may face carbon costs while imported manufactured products containing aluminium remain outside the mechanism.
The Council adopted its negotiating position on 12 June 2026, supporting an extension of CBAM to additional downstream goods and stronger measures against circumvention.
On 15 September 2026, the European Parliament adopted its partial first-reading position on the proposal to extend CBAM to downstream goods and strengthen anti-circumvention measures (procedure 2025/0419(COD), T10-0276/2026). The matter was then referred back to the responsible committee for interinstitutional negotiations.
Secondary aluminium is becoming strategically important
Aluminium can be recycled repeatedly while retaining its core material properties. Secondary aluminium therefore represents a major opportunity for Europe to reduce both energy consumption and import dependence.
Recycling aluminium generally requires far less energy than producing primary metal from bauxite and alumina.
As Europe's primary smelting base contracts, the availability of high-quality aluminium scrap becomes increasingly important to the competitiveness of downstream industry.
Scrap availability and trade
Europe exports substantial quantities of recyclable metals. In 2025 the EU exported 18.9 million tonnes of recyclable metallic raw materials to non-EU countries, more than half of total EU recyclable-material exports.
These figures cover metals collectively rather than aluminium alone, but they illustrate the scale of the policy question: whether valuable secondary raw materials should remain available to European recyclers and manufacturers.
Where aluminium demand is growing
Automotive
Lightweighting and electric vehicles increase demand for aluminium sheet, castings, extrusions and structural components.
Electricity networks
Grid expansion and electrification require large volumes of aluminium conductors and related equipment.
Construction
Aluminium is widely used in façades, windows, roofing, structural systems and renovation.
Packaging
Beverage cans, food packaging and other applications create significant demand and strong recycling potential.
Aerospace & defence
Aluminium alloys combine strength and low weight, making them essential to aviation and defence applications.
Renewables
Solar, wind, batteries, transmission infrastructure and other clean technologies increase aluminium demand.
The main pressures on European aluminium
Energy costs
High electricity prices directly threaten the economics of European primary aluminium smelting.
Import dependence
A shrinking primary-production base increases reliance on imported primary and intermediate aluminium products.
Global overcapacity
Expansion of production capacity outside Europe can create persistent price and competitive pressure.
Scrap leakage
Exports of valuable secondary materials can reduce feedstock available to European recycling and remelting operations.
What to watch next
- Primary capacity: whether idled European smelting capacity restarts or additional closures occur.
- Electricity prices: the cost gap between European smelters and major competing regions.
- CBAM: implementation of the definitive regime and downstream extension.
- Trade balance: whether the €11.1 billion aluminium deficit recorded in 2024 widens or narrows.
- China and other suppliers: changes in production, exports, tariffs and trade-policy measures.
- Scrap: EU measures affecting exports and availability of high-quality recycled aluminium feedstock.
- Critical Raw Materials Act: strategic projects and measures affecting bauxite, alumina and aluminium supply.
- Automotive demand: the impact of electrification and vehicle-production trends on downstream aluminium demand.
- Grid investment: growing aluminium requirements from transmission, distribution and electrification.
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