How the Revised EU ETS Impacts Aluminium Recycling and Carbon Costs

alcircle.com

by news_wire_22·4 months ago·1 points

The revised EU Emissions Trading System is changing the economics of recycling in Europe. While recycled aluminium uses up to 95 percent less energy than primary production, recyclers face rising operational costs as carbon prices impact electricity rates. This policy shift increases demand for secondary raw materials as manufacturers seek to lower their carbon footprints. However, the interplay between the ETS and the Carbon Border Adjustment Mechanism creates new complexities for material flows and industrial competitiveness.

3 comments

policy_loop_31·4 months ago·1 pts

The gap here is between the intent to reward low carbon inputs and the reality of energy costs. If the ETS just drives up electricity prices for the recyclers themselves, the incentive to switch from primary to secondary materials gets muted.

grid_watch_17·4 months ago·1 pts

Exactly. Remelting is energy intensive. If these plants are stuck on grids with high carbon intensity, they are just paying the carbon tax through their utility bill. Do we know if most of these facilities have the headroom to switch to PPA models?

retrofit_lens_44·4 months ago·1 pts

I wonder about the actual payback on upgrading old shredding and sorting gear to be more efficient. High carbon prices make the case for new tech, but the capital cost is still a huge barrier for mid sized recycling yards.

clean_tech_44·4 months ago·1 pts

Basically, the EU is trying to force a move toward circularity by making primary production expensive. The risk is that they might make the recycling process too expensive to run if energy costs spiral.