July 4, 2025. The European aluminium industry is at a critical juncture, facing unprecedented challenges due to a combination of high energy costs, stringent regulations, and increasingly intense global competition. While Europe is experiencing a steady decline in its primary aluminium production, which has fallen by 25.5% since 2010, countries such as Russia, China, Malaysia, Vietnam, Thailand, Turkey, and India are strengthening their commercial and productive positions thanks to significant strategic and economic advantages.
Turkey has become a key player in this new trade balance. Its strategy of importing primary aluminium from Russia and Flat Rolled Products (coils) from China at low prices allows it to offer very competitive products in the European market. This advantage derives mainly from factors such as energy subsidies, export subsidies, and fewer environmental restrictions from its trading partners. Thus, Turkey displaces historical European producers by offering considerably more attractive prices.
European dependence
This adverse outlook for European industry is clearly reflected in the sector’s trade balance. According to EUROSTAT data, Europe imported 6.5 million tons of raw aluminium material in 2024, while its exports were just 1.62 million. Despite a slight reduction in imports in 2023, Europe’s dependence on imported raw materials remains high, severely limiting local growth prospects.
Source: Own elaboration from EUROSTAT data.
Unequal conditions
The unequal regulatory and operating conditions between Europe and its international competitors exacerbate this situation. Europe faces stringent environmental requirements, such as the new Border Carbon Adjustment Mechanism (CBAM), high energy costs, and few direct government subsidies. In contrast, China, Turkey and India enjoy energy subsidies and fewer environmental restrictions, thus benefiting from considerably lower operating costs.
The CBAM, scheduled to enter into force in 2026, is a mechanism designed to tax imports according to the carbon content of products from countries with lower environmental standards. However, by considering only direct emissions – those generated specifically during the industrial process – and not indirect emissions, such as those from intensive electricity consumption, international transport, the extraction and processing of raw materials like bauxite, and the production of ancillary inputs like anodes among others, a substantial part (approximately 80%) of the real environmental impact of aluminium production is omitted. This limitation opens the door for countries acting as commercial transit countries to benefit by importing materials with a high carbon footprint and re-exporting them to Europe without these emissions being properly accounted for.
Supply of scrap aluminium
Another problem that adds pressure on the European industry is the decreasing availability of aluminium scrap, which has been consolidated as a strategic resource and which is key to reducing dependence on imported primary aluminium and favoring a more sustainable production model. However, the increasing leakage of this resource to third countries is jeopardizing the sector’s security of supply and undermining its decarbonization, as scrap recycling is far more ecological than primary aluminium utilization. This leakage is mainly directed to countries such as China, India, Malaysia, Vietnam or Thailand, where not only are higher prices offered to European exporters – driven by state subsidies and lower environmental and labor requirements – but where they also maintain policies of restrictions on the export of their scrap, through bans or tariffs. In this way, they secure their domestic supply while benefiting from the lack of export limits from Europe.
Balance of trade in Spain
Particularly in Spain, the positive trade balance in scrap has deteriorated considerably, falling by more than 50% in the last four years, a situation that could increase the operating costs and carbon footprint of companies such as Aludium or Grupo Baux as they are forced to import raw materials from other markets increasing de facto their environmental impact with unnecessary shipments. It is essential to acknowledge that European companies also actively engage in this global trade, exporting a significant portion of their production and importing scrap from other markets due to better prices and guaranteed supply.
Europe’s response
In response to these challenges, the European Commission, in March 2025, has recently presented a specific Action Plan for the steel and metals sector aimed at maintaining and expanding European industrial capacities. Key actions include ensuring an affordable energy supply, preventing carbon leakage by strengthening CBAM, promoting the circular economy, and protecting quality industrial jobs. This plan aims to strengthen European competitiveness in the face of unfair global competition and support the transition to cleaner and more sustainable production processes.
Moreover, it is imperative to emphasize that maintaining quality industrial jobs in Europe is not only an economic rationale for trade balance but also a defense of a unique social model and lifestyle. The cost of labor in Europe is considerably higher than in countries such as China or Turkey, reflecting fundamental values such as social equity, labor rights protection, occupational safety, and environmental sustainability.
Our commitment
Companies such as Aludium and Grupo Baux, which together employ over 1,000 workers, are clear examples of this European commitment to quality industrial employment. Addressing the economic gap through strong defensive mechanisms, such as well-designed tariff policies, is therefore vital to protect both our global competitiveness and the values that underpin our social model.
Aluminium is essential for strategic sectors such as transport, construction, renewable energies, and defense, making its production and recycling a matter of industrial sovereignty for Europe. In a context where other powers are reconfiguring their strategic alliances and strengthening their industrial autonomy, Europe must act with vision and determination.
Implementation of effective policies
Ultimately, for the European aluminium industry to successfully meet these challenges, it is crucial that companies and authorities work together to implement effective policies that balance global competition and ensure a sustainable and competitive future.
Aludium and Grupo Baux strongly support these European initiatives aimed at protecting and strengthening our local industry. We believe that the moderate and strategic defense of the European market, through appropriate policies, is essential to promote innovation, reduce environmental impact, and ensure quality jobs in our industry, maintaining our global competitiveness and ensuring sustainable growth. It is not a question of closing the doors to international trade, but of ensuring a level playing field that allows us to compete on an equal opportunity basis.
European industrial leadership
The European authorities cannot allow the future of Europe to be the only supplier of cheap raw materials, such as scrap, to countries like China, Turkey, or the United States, which are then returned to the European market in the form of products with higher added value. This approach is contrary to the industrial and sustainable model to which Europe has historically aspired. Reviewing and adjusting the current rules could redirect the sector towards a more solid, innovative and globally competitive position.
Aluminum is not the only sector to have dramatically suffered in the last couple of decades. Manufacturing is the backbone of a country, offering good jobs, stability, and autonomy. While reshoring manufacturing in Europe is challenging, as many investors prefer cheaper and less regulated countries, this does not mean that we should sacrifice what is left of the European production capacity. Imports should complement domestic production, not replace it. We strongly encourage European leaders to act quickly on defining a level playing field with rules that would allow domestic production to continue its long commitment to the European economy.
We believe in an industry that not only resists but leads in a Europe that is not afraid to compete but demands fair conditions to do so.