ALFED is continuing to work closely with HMRC, HM Treasury, and the Joint Industry Working Group to ensure the UK’s Carbon Border Adjustment Mechanism (CBAM) is effective and does not negatively impact domestic manufacturing or investment.
In its response to the latest consultation (closing 21 May), the ALFED submission states that it strongly supports linking the UK and EU Emissions Trading Systems (ETS), warning that divergence would increase costs and complexity for integrated supply chains. It also raises concerns about the current limited scope of CBAM, noting that excluding downstream and finished products could disadvantage UK producers and encourage carbon leakage. ALFED therefore calls for a clear, phased expansion of scope aligned with EU developments, including additional downstream products and currently excluded aluminium packaging components.
In terms of technical design, ALFED advocates for more tailored default emissions values that reflect regional and production differences, alongside early publication to support industry readiness. It stresses the need to align monitoring, reporting and verification requirements with EU systems to minimise duplication and highlights that current timelines may not give businesses enough time to prepare. The organisation also recommends introducing an annual review mechanism to refine CBAM and proposes the reinvestment of CBAM revenues into UK industrial decarbonisation projects at UK businesses. Finally, ALFED calls for greater clarity on the future of free allocation within the UK ETS to provide stable policy signals, manage high energy costs, and ensure the continued competitiveness of UK aluminium industry during the transition.
To read ALFED’s full consultation response, please click here.
