Sourcing outside EU since CBAM

WHAT IS REALLY CHANGING?

Now that CBAM is fully in force, the equation around international sourcing is changing. The question is no longer only where a product can technically be sourced best or economically at the lowest price. CO₂ has become an explicit cost factor.

We notice that customers are asking themselves: does it still make sense to source aluminium or semi-finished products from outside the EU now that CBAM is a reality? The honest answer is: it depends on the overall business case.

CBAM ensures that a CO₂ correction is applied when certain products are imported from outside the EU. Importers within the EU must determine the embedded emissions and purchase certificates accordingly. The price of these certificates is linked to the European Emissions Trading System and therefore moves with the market. As a result, CO₂ becomes a variable in the cost structure rather than a fixed factor.

This does not automatically mean that sourcing outside the EU becomes disadvantageous. It does mean that the decision-making process becomes more complex.

When can it still make sense?

• If the price difference is substantial and remains competitive even after accounting for CO₂ costs.

• If suppliers are transparent about their actual emissions and willing to have them verified.

• If there are strategic reasons, such as specific capacity, technology or material availability.

Where previously the focus was mainly on material costs, transport and lead times, an additional layer now needs to be considered. The total cost must be evaluated including CO₂. And that CO₂ component is not static; it depends on regulation and on the ETS price.

The discussion therefore shifts from “lowest purchasing price” to “lowest manageable total cost”.

There is another factor at play.

CBAM does not only require financial resources for certificates, but also transparency within the supply chain. How are emissions calculated? Are they based on default values or actual values? How robust is the documentation? Who carries responsibility if regulations change? These are questions increasingly being raised by procurement and finance departments.

In that environment, the issue ultimately comes down to risk management — not just price.

A fully European supply chain offers predictability within a single regulatory framework. Sourcing outside the EU can still be rational, but it requires active management, scenario analysis and clear agreements with suppliers. The time when origin was purely a logistical decision is behind us.

How does this relate to working with BOAL?

At BOAL we closely monitor these developments. Not only because we operate in an international supply chain ourselves, but also because we understand that our customers need to make strategic decisions in a changing market. It is important to recognise that not every form of sourcing outside the EU carries the same regulatory profile.

We see this in our own supply chain every day. On the one hand, we source aluminium, among other places, from Iceland, which participates in the European Emissions Trading System (EU ETS) through the European Economic Area. On the other hand, our plant in De Lier works closely with our sister plant in Leicestershire (UK) for specific customer projects. The United Kingdom operates its own emissions trading system (UK ETS), where - similar to the EU - a CO₂ price is already embedded in production.

For CBAM this means that the carbon component in these supply chains is already partly priced into the production process. As a result, sourcing from these countries differs fundamentally from sourcing from regions where no comparable carbon price applies.

For that reason, collaborating with partners in these regions remains a logical choice for us. It allows us to work with our customers on a project-by-project basis to determine the most suitable solution. In some cases, it may therefore still make sense to exchange capacity or products between our locations, for example to optimally serve customers in specific sectors or to safeguard material availability.

Because this takes place within one integrated organisation, with insight into origin and emissions data, such decisions can be made based on the full picture: availability, regulation, cost and long-term risk.

Would you like to discuss the impact of CBAM on your procurement strategy or projects? We are happy to review the overall considerations with you - practically, realistically and with an eye for both technical and economic aspects.