How Does CBAM Work & What is its Financial Impact?
The Carbon Border Adjustment Mechanism (CBAM), a part of the “European Green Deal”, in which the EU will impose a carbon price on imports to match what domestic producers under the EU’s Emissions Trading System (ETS) pay, aims to prevent “carbon leakage” where production moves to countries with laxer emissions rules.
Starting Jan 1, 2026, importers must report embedded emissions in imported goods and surrender CBAM certificates based on those emissions—priced in line with EU ETS allowance costs.
CarbonChain.com estimates that including indirect emissions could increase CBAM costs for aluminum imports by an average of as much as 800 euro per tonne.
The cost impact is significant for specific products like aluminum.
Aluminum expert Martin Hartlieb reveals that the European Aluminum commissioned a study that shows that the current design of CBAM may accelerate carbon leakage in the aluminum sector due to circumvention risks, especially by over-declaring recycled content. The study shows that more transparency and more precise reporting rules and obligations are needed for importers, especially regarding the calculation and declaration of carbon footprints and recycled contents of products. Unverified scrap content indeed poses a major risk of circumvention. Moreover, on August 29, 2025, the EU launched consultations regarding adjustments to the rules and some of them will likely be implemented before the end of the year.
What Is eccomelt356.2 & Why will it Help Shield against the cost of CBAM?
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- eccomelt356.2 has the lowest carbon footprint of any recycled aluminum on the market
- it is a specialized recycled aluminum alloy (A356.2) designed to be exceptionally clean and low in impurities—max 0.15% iron—manufactured through a proprietary non-thermal recycling and cleaning process.
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- Its cradle-to-gate carbon footprint is a remarkably low 0.08 t CO₂e per tonne of aluminum, the lowest reported in the industry.
- For comparison:
Average primary aluminum can emit 16.8 t CO₂e/t, and up to 20 t with coal-based energy.
A 95% recycled-content A356 ingot still reaches around 0.91 t CO₂e/t—eccomelt356.2 is significantly lower. -
How eccomelt356.2 Helps Mitigate CBAM’s Impact
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- Because CBAM charges are tied to declared carbon intensity, buyers using eccomelt356. 2 pay little to no carbon tariffs eompared to conventional aluminum.
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- Primary aluminum or standard recycled alloys can face substantial CBAM levies.
- By sourcing eccomelt356.2, importers shield themselves from volatile and rising carbon prices that will steadily increase the cost of high carbon aluminum.
- Predictable, Transparent Compliance: Eccomelt provides and EPD (Environmental Product Declaration) with verified emissions data
- This documented transparency makes CBAM compliance easier, reducing risks of underreporting penalties or costly carbon credit purchases.
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- Example: A casting using 100% “global average” primary aluminum might emit ~24.3 t CO₂e/t Al. Simply replacing 20% with eccomelt356.2 halves that to approximately 12.4 t CO₂e/t Al.
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- Because CBAM charges are tied to declared carbon intensity, buyers using eccomelt356. 2 pay little to no carbon tariffs eompared to conventional aluminum.
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- Reduces CBAM certificate needs:
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- Since CBAM costs are directly tied to carbon emissions, lower emissions from eccomelt356.2 mean fewer CBAM certificates must be purchased—reducing costs under the EU’s carbon pricing.
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- Reduces CBAM certificate needs:
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- Improves melting efficiency:
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- eccomelt356.2’s cleanliness (low impurity, low melt loss) boosts furnace charge density and energy efficiency, further lowering emissions and indirect emissions. This amplifies CBAM cost benefits.
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- Improves melting efficiency:
Summary Table
| Feature | Effect on CBAM Impact |
|---|---|
| Ultra-low emissions | Significantly reduces carbon footprint → fewer CBAM certificates needed |
| Replacement strategy | Partial substitution (e.g., 20%) halves emissions and CBAM exposure |
| Efficiency gains | Reduces energy use and indirect emissions, mitigating future CBAM scope |
By replacing high-carbon primary aluminum with eccomelt356.2, foundries and importers not only lower their embedded emissions but also directly reduce their CBAM-related financial liability. The clean, efficient nature of this recycled alloy makes it a strategic asset in minimizing both direct and future expanded CBAM costs—especially when indirect emissions become part of the carbon price.
