As resource security and decarbonization become increasingly important, major economies are strengthening efforts to retain aluminum scrap. From the EU's review of export controls and the U.S. strategic asset proposal to Japan's circular economy initiatives and policies in the UAE and South Africa, these developments could reshape global scrap flows and affect secondary aluminum markets.

Raffineria Metalli Cusiana S.p.a. (Cusiana), a major Italian secondary aluminium refiner supplying multinational automotive, construction and furniture companies across Europe, has established a strategic partnership with TOMRA Recycling to redefine aluminium recycling with advanced multi-sensor sorting technology. Together, they have pioneered a multi-stage sorting line, enabling Cusiana to move beyond traditional ingot production and create branded, near carbon-free aluminium ingots and specific high-purity alloys, maximising profit while also delivering significant environmental benefits.

【SMM Analysis】The European Union’s Carbon Border Adjustment Mechanism (EU’s CBAM) took a decisive step from its pilot phase towards actual enforcement in December 2025, only a month before it becomes effective January 2026. The aluminium sector, with a total trade value of USD 448 billion in 2024, faces CBAM's carbon-accounting requirements alongside five other high-carbon sectors. Changes look to favour low-carbon production through responsible sourcing of raw materials and energy usage, as well as rewarding countries taking initiatives to implement equivalents to CBAM. On the flip side, CBAM imposes higher costs on trading partners of aluminium products with high-carbon emission. This series of policies will likely raise aluminium products prices for consumers in the EU in the short-term, and reshape aluminium’s trade flow for years to come. This article will cover CBAM basics and frameworks, incorporate the newest updates of the December 17 package and provide aluminium sector-specific implications and outlooks.

【SMM Analysis】 Since the LME aluminum price began its upward trend in October 2025, SMM research shows that the trading volume of scrap aluminum and recycled aluminum alloys in Southeast Asia, especially Thailand and Malaysia, has declined due to factors such as rising aluminum prices and natural disasters.

Recently a draft of the EU Carbon Border Adjustment Mechanism (CBAM) benchmark regulation reveals key details on how carbon emissions in imported goods will be calculated. It distinguishes benchmarks between actual emissions data and default benchmark values, which may correspond to country-specific production routes. The draft also emphasizes adjustments for complex goods based on precursor emissions and highlights variations in benchmarks depending on production routes, such as differences for primary versus secondary aluminium. Additionally, some benchmarks are period-specific for certain CN codes. This leaked draft offers an early look at the EU's efforts to align carbon costs on imports with climate goals, reinforcing CBAM's focus on transparency, community support, and emissions reduction in trade. The document provides an early preview of the EU Carbon Border Adjustment Mechanism (CBAM) regulations and their potential implementation, but official policies and benchmarks remain pending the EU's formal releases and the EU Emissions Trading System (ETS) revision.

【SMM Scrap Aluminium Market Analysis】ASEAN’s aluminium scrap trade is emerging as a strategic pillar in the global shift toward low-carbon manufacturing. Thailand, Malaysia, and Vietnam dominate regional flows, but regulatory fragmentation and illicit trade challenge market stability. Recent U.S.–ASEAN critical-minerals deals and expanded ties with Canada and China highlight growing global interest in the region’s recycling capacity. To realise its potential, ASEAN must harmonise policies, strengthen traceability, and build a cohesive circular-economy framework for sustainable aluminium production.