ALFED has raised a series of technical and practical concerns with HM Treasury and HMRC following the publication of the latest UK Carbon Border Adjustment Mechanism (CBAM) aluminium default values and guidance.
With UK CBAM due to take effect on 1 January 2027, we have been gathering feedback from members across the aluminium supply chain to understand the implications for businesses preparing for implementation.
Members have highlighted concerns around the transparency of the published default values, the availability of emissions verification, differences between UK and EU requirements, and the potential impact on manufacturing competitiveness.
We have consolidated this feedback into a formal industry representation, seeking clarification on the following key areas.
What ALFED has asked Government to clarify
1. How aluminium default values have been calculated
We have requested greater transparency around the methodology and assumptions used to determine the published values, including which emissions are covered, how precursor materials are treated, and how primary and secondary aluminium production routes are reflected.
Members have questioned whether some values accurately reflect the emissions associated with different production processes.
2. Whether default values could discourage lower-carbon production
We have highlighted concerns that default values which are lower than some producers’ actual emissions could reduce the incentive to invest in verified emissions reporting and lower-carbon production.
We are seeking assurance that the framework will recognise and reward businesses able to demonstrate genuinely lower embedded emissions.
3. Verification requirements and industry readiness
Members have raised questions about the availability of accredited verification bodies, the evidence needed to report actual emissions, and whether existing Environmental Product Declarations (EPDs) or EU CBAM data can be used.
We have asked Government to consider the practical challenges businesses face in completing verification ahead of implementation, especially where delays could leave them reliant on default values.
4. Treatment of processed and finished aluminium products
We have requested practical guidance and worked examples covering products that undergo additional processing, including extrusion, anodising, powder coating, machining and fabrication.
Greater clarity is needed on how emissions from relevant processes and precursor materials should be calculated and reported.
5. Differences between UK and EU CBAM
Members have highlighted the additional complexity of operating under two different CBAM frameworks, especially where emissions boundaries, default values, verification requirements and implementation arrangements differ.
ALFED has asked Government to explain these differences and assess the potential implications for trade and competitiveness across the aluminium value chain.
6. Implementation timetable and transitional arrangements
With limited time remaining before January 2027, we have raised concerns about whether businesses have sufficient guidance and verification capacity to prepare effectively.
We have asked Government to review implementation readiness and consider whether additional transitional administrative arrangements may be necessary.
7. Progress towards UK–EU ETS linking
We have reiterated the importance of progressing the proposed linkage between the UK and EU Emissions Trading Schemes, with the aim of reducing unnecessary barriers for businesses operating across closely connected UK and European supply chains.
What happens next?
ALFED has requested a technical discussion with HM Treasury and HMRC, alongside further written clarification and practical examples for the aluminium sector.
Our objective is to ensure that UK CBAM is transparent, workable and proportionate, supports genuine decarbonisation and maintains a level playing field for UK manufacturers.
We recognise that members may have different perspectives depending on their position in the supply chain. It is therefore important that Government understands the full range of potential impacts before implementation.
We want to hear from members
We are continuing to gather evidence and would especially welcome:
- Examples of published default values that appear inconsistent with verified or estimated production emissions.
- Specific commodity codes where clarification is required.
- Difficulties obtaining or verifying actual emissions data.
- Examples of additional costs, reporting burdens or differences between UK and EU CBAM requirements.
- Concerns about the treatment of downstream processing and finished aluminium products.
Please share your feedback with the ALFED team, especially where you can provide practical examples or supporting data. Commercially sensitive information can be discussed confidentially.
We will continue engaging with Government through the CBAM Joint Industry Working Group and will share further clarification with members as it becomes available.
Useful Government guidance:
