EU-India FTA Could Improve Indian Aluminium Access, but CBAM Still Limits the Upside

Hindalco Industries

The EU-India FTA could improve the position of Indian aluminium suppliers in Europe. The deal would reduce EU tariffs on Indian base metal imports to zero from 10pc. That change could give Indian aluminium exports a stronger commercial opening. As a result, the EU-India FTA may improve competitiveness for producers such as Hindalco and Vedanta.

The tariff change matters because Indian suppliers have faced a clear disadvantage in Europe. Duty-free suppliers such as Norway, Iceland, and Canada already held an edge. Removing the tariff could narrow that gap. Therefore, Indian aluminium suppliers may enter the EU market on more equal terms.

However, the agreement does not remove every barrier. EU CBAM will still apply to imported goods, even after the tariff cut. That means carbon costs will remain a major factor in future trade economics. Consequently, the EU-India FTA improves access, but does not create a fully open market.

Indian Aluminium Exports Could Gain on Tariffs but Still Face Carbon Pressure

Indian aluminium exports could benefit immediately from lower tariff friction. Price-sensitive buyers in Europe may find Indian material more attractive under a zero-duty regime. That could support better trade flows from India to the EU. Meanwhile, producers are still waiting for final clarity on aluminium in the completed legal text.

CBAM remains the deeper long-term issue. The European Commission has already confirmed that the FTA offers no exemption from the carbon border measure. Importers will still face carbon-related obligations under EU climate policy. Therefore, Indian aluminium suppliers must think beyond tariffs and prepare for emissions competitiveness.

This is why industry optimism remains cautious rather than aggressive. Lower tariffs help, but they do not neutralize non-tariff costs. A trader in the article described CBAM as a continuing trade barrier. As a result, the full commercial benefit of the EU-India FTA may prove smaller than the headline suggests.

EU-India FTA Arrives as Indian Aluminium Exports to Europe Have Already Declined

Indian aluminium exports to the EU have already weakened in recent years. Rising domestic demand in India has reduced export availability. Lower export incentives have also weighed on overseas shipments. Therefore, the industry is entering this trade opportunity from a lower export base.

The recent numbers show that decline clearly. India’s primary aluminium exports to the EU fell sharply in 2024 from the previous year. Shipments in January to November 2025 also remained subdued. Consequently, the EU-India FTA may help stabilise exports first before driving a major surge.

The real opportunity will depend on how Indian producers balance three pressures. They must manage domestic demand, EU carbon costs, and international price competition. Tariff relief helps with one of those problems. However, it does not solve the other two. Therefore, Indian aluminium suppliers may gain an edge, but only within tighter structural limits.

The Metalnomist Commentary

This deal improves trade access, but it does not remove the real future test. European aluminium trade will increasingly depend on carbon performance as much as tariff policy. For Indian suppliers, the EU-India FTA is helpful, but CBAM will still decide who wins long term.

EU Steel Industry Faces Key Policy Shifts: A Call for Concrete Measures

EU Steel

The mood among European policy makers regarding the steel industry has notably shifted, with increasing support for the sector’s future. According to Axel Eggert, director-general of Eurofer, the European steel industry association, policymakers are beginning to recognize the importance of addressing the growing challenges in global steel production. However, while this shift in mood is encouraging, Eggert emphasized that these positive words must be followed by tangible actions.

Rising Political Support for EU Steel Industry

Eggert pointed out that there is more political backing for the European steel sector, especially as lawmakers become increasingly aware of the massive overcapacity in global steel production, particularly CO2-intensive steel. The Organization for Economic Cooperation and Development (OECD) predicts that global steel capacity will grow by 157 million tons over the next three years, which will likely negate the decarbonization efforts of the EU steel industry.

In response, the European Parliament has called for a European steel action plan, which has been embraced by European Commission President Ursula von der Leyen. However, Eggert stressed that while these statements are promising, they must be followed by concrete measures to ensure the long-term sustainability of the industry.

Green Steel and Public Procurement as Key Measures

One of the critical measures that Eggert advocates for is the implementation of public procurement for green steel. With the EU's ambitious decarbonization targets — a 55% reduction in CO2 emissions by 2030 and carbon neutrality by 2050 — Eggert emphasized that EU governments should lead by example. This means prioritizing green steel in public sector construction, vehicles, and other products, which would support European producers committed to decarbonizing their operations.

Global Overcapacity and Trade Distortions Impacting EU Steel

The steel industry crisis is largely driven by global overcapacity and low demand in Europe, exacerbated by high energy costs. Compounding this issue is the low-priced steel being exported by countries like China, Japan, and India, which depresses global markets. China’s exports, in particular, have been an issue for EU steel producers, as the country benefits from state subsidies, leading to significant trade distortions.

Eggert discussed how the EU has implemented anti-dumping measures on stainless steel from Indonesia, but Indonesia has circumvented these by exporting processed steel to third-party countries like Taiwan, Vietnam, and Turkey, which then re-export the products back to the EU. This tactic, along with the support from Chinese investments in Indonesia’s steel industry, has made Indonesia’s steel sector one of the largest globally.

EU Trade-Defense Measures: Need for Improvement

Eurofer has called for enhanced EU trade-defense measures to tackle issues such as dumping and excessive capacity from third countries. Eggert emphasized the need for improved steel safeguards and more effective enforcement of existing trade defense instruments. Currently, anti-dumping duties on Chinese steel are too low, undermining the efficacy of EU trade policies.

Carbon Border Adjustment Mechanism (CBAM) Concerns

The EU’s carbon border adjustment mechanism (CBAM) has been another point of contention. Third countries are already looking to export steel from their lowest CO2-emitting plants to avoid paying CBAM costs. Eggert advocated for including indirect CO2 emissions (Scope 2 emissions) in the CBAM, particularly for stainless steel, which is a major contributor to indirect emissions.

Scrap Export Concerns and India's Decarbonization Challenge

Finally, Eggert addressed concerns from India regarding the potential for a European export ban on scrap metal. While the EU does not currently have a scrap export ban, Eggert pointed out that India itself has export restrictions on scrap and needs to focus more on decarbonizing its domestic steel sector. He also warned that if India delays its decarbonization efforts until 2070, the EU will face a significant disadvantage in the global steel market.

EU-India FTA and CBAM Remain on Separate Tracks

EU-India, FTA

The EU-India FTA and CBAM remain on separate tracks. The European Commission confirmed that the trade deal gives India no exemption from the carbon border measure. India will not receive more favourable treatment than other countries. As a result, the EU-India FTA and CBAM will continue to shape trade under different rules.

The trade agreement still marks a major commercial breakthrough. The two sides concluded talks on tariff cuts or eliminations covering most EU goods exports to India. However, Brussels kept its climate border policy fully intact. Therefore, the EU-India FTA and CBAM now define both opportunity and constraint for industrial trade.

CBAM Stays Firm Even as the Trade Deal Expands

CBAM remained one of the toughest issues in the negotiations. EU officials said India first took a very hard line on the carbon border measure. However, the final outcome did not alter the EU’s legal obligations. That means exporters to Europe must still prepare for carbon-related compliance costs.

The agreement instead opens room for technical dialogue. EU officials said both sides can now discuss CBAM through a more structured channel. They also agreed to deepen cooperation on climate change and decarbonisation. Meanwhile, the EU is considering support for India’s greenhouse gas mitigation efforts.

This approach shows the EU’s broader trade logic. Brussels wants market access and climate discipline at the same time. It will cooperate on decarbonisation, but it will not dilute core climate tools. Consequently, EU trade policy now links commercial openness with tougher carbon accountability.

Industrial Trade Gains, but Carbon Compliance Still Matters

The industrial impact will extend beyond tariffs alone. Steel, cars, and carbon-intensive products remain highly sensitive in the EU-India relationship. Even with lower tariffs, exporters still face the strategic challenge of embedded emissions. Therefore, carbon performance will matter almost as much as price competitiveness.

The agreement also leaves some areas outside the deal. EU officials said there is no dedicated chapter on raw materials or energy. That omission matters for supply chain planning in metals and industrial manufacturing. It suggests the current deal focuses more on trade access than resource integration.

The entry into force process will also take time. Legal revision, translation, publication, and political consent still lie ahead. That means businesses should not expect immediate full implementation. Instead, companies should prepare for a phased trade opening alongside unchanged carbon obligations.

The Metalnomist Commentary

This deal confirms that the EU will not trade away CBAM for easier market access. That is an important signal for metals, chemicals, and other carbon-intensive sectors. The real lesson is clear: future trade competitiveness will depend on both tariff access and decarbonisation readiness.

EU Russian LNG ban reshapes Europe’s energy sanctions strategy

EU Russian LNG

The proposed EU Russian LNG ban marks a major escalation in the bloc’s energy sanctions. The EU Russian LNG ban would end direct Russian LNG imports into Europe earlier than previously planned. As a result, the EU Russian LNG ban could accelerate diversification, while testing unity among member states.

EU Russian LNG ban sits at core of 19th sanctions package

The European Commission has proposed a direct ban on Russian LNG imports into EU markets. The measure forms part of the EU’s 19th sanctions package and still requires unanimous approval from all 27 member states. However, Slovakia and Hungary have opposed energy sanctions in the past, raising risks of delay or dilution.

The EU had already pledged to phase out Russian fossil fuel imports, including LNG, by end-2027. Now, the proposal would introduce a full EU Russian LNG ban from 1 January 2027, effectively pulling the deadline forward in practice. Commission president Ursula von der Leyen framed the move as “turning off the tap” after three years of demand reduction and diversification.

Alongside the LNG measure, the package adds a full transaction ban on Rosneft and Gazpromneft. These state-controlled groups already faced partial limitations, but the new rules target a broader range of crude and refined product dealings. As a result, Russia’s remaining oil revenue channels into Europe will come under tighter scrutiny.

Sanctions tighten on oil flows, shipping and financial channels

The EU Russian LNG ban is one pillar of a wider sanctions upgrade. The package expands asset freezes to more Russian firms and targets refineries, oil traders and petrochemical companies in third countries. The EU wants to clamp down on actors that help move Russian oil in breach of existing measures, though specific entities and enforcement tools were not disclosed.

The EU is also adding 118 vessels from Russia’s so-called “shadow fleet” to its sanctions list. This brings the total to over 560 vessels and raises compliance risks for shipowners, insurers and charterers dealing with opaque Russian flows. Meanwhile, additional sanctions on banks and institutions linked to alternative payment systems and crypto platforms aim to close remaining financial loopholes.

Von der Leyen said Russia’s oil revenues from Europe have already fallen by more than 90pc in three years. The new measures, including the EU Russian LNG ban, aim to lock in that reduction and limit future circumvention. However, markets will watch how quickly LNG volumes reroute to Asia, and how smoothly Europe backfills supply.

The Metalnomist Commentary

The EU Russian LNG ban shifts the sanctions debate from crude and products to gas, where Europe still faces structural risks. If implemented as proposed, the ban will hard-wire diversification into LNG contracts and infrastructure planning over the next two years. Traders, utilities and shipowners should prepare for tighter compliance scrutiny and evolving trade routes as Brussels increasingly targets not just Russian exporters, but third-country facilitators.

EU stalls US trade deal as Greenland tariff row escalates

Greenland

EU stalls US trade deal as a direct response to President Trump's Greenland-linked tariff threats. EU leaders will meet on 22 January to coordinate a unified response and reassess transatlantic economic engagement. Meanwhile, the European Parliament is preparing to freeze implementing laws for the EU-US trade deal agreed last summer. As a result, EU stalls US trade deal at precisely the moment businesses across North America and Europe seek stability.

Greenland tariffs derail EU-US trade deal momentum

EU leaders are weighing a tough response after Trump threatened to annex Greenland and impose a new 10pc tariff. The measures would hit imports from France, Germany and five other European countries from 1 February, rising to 25pc in June. The threatened tariffs specifically target countries involved in a military mission in Denmark’s Greenland territory, widening the geopolitical rift.

The stalled EU-US trade deal had locked in a 15pc US baseline tariff and 0pc tariffs on selected EU-bound US exports. However, lawmakers now argue that EU stalls US trade deal implementation until Washington withdraws its Greenland-linked tariff threats. As a result, European politicians are signalling that no agreement offering 0pc tariffs can move forward under open coercive pressure.

European Parliament trade chair Bernd Lange urged using all available tools, including the anti-coercion instrument (ACI). Meanwhile, EPP group leader Manfred Weber said that approval of the pact is “not possible at this stage”. Their stance confirms that EU stalls US trade deal not just tactically, but as part of a wider strategic rethink.

Anti-coercion instrument raises stakes for supply chains

The EU’s anti-coercion instrument would allow Brussels to curb US access to goods, services and public procurement markets. Therefore, any escalation could hit key transatlantic value chains, including autos, machinery, chemicals and high-end manufactured goods. For metals, this would feed into steel, aluminium, copper and specialty alloy demand linked to these sectors.

The ACI also covers foreign direct investment and financial markets, increasing uncertainty for cross-border industrial projects. As a result, companies with integrated EU-US manufacturing footprints face higher risk premia and more complex trade planning. This comes as tariffs already feature prominently in US economic policy, further complicating capital allocation decisions.

The Greenland dispute will also follow leaders to Davos, where Trump and senior EU figures will share a stage. Any harsh rhetoric could harden positions and accelerate planning for retaliatory steps on both sides. Investors and industrial players will watch closely for signals on how far the EU is willing to push the ACI lever.

The Metalnomist Commentary

The current standoff shows how quickly geopolitics can override the economic logic of a hard-won trade deal. For metals and manufacturing supply chains, the real risk is not a single tariff move, but a sustained cycle of coercive measures and retaliation. Firms that diversify sourcing, build tariff resilience into contracts and hedge regulatory risk will be better positioned if this dispute drags on.

EU Brazil critical minerals agreement targets strategic autonomy

Brazil critical minerals

The EU Brazil critical minerals agreement signals a major shift in how Europe secures lithium, nickel and rare earths. The EU Brazil critical minerals agreement aims to underpin the bloc’s digital and clean transitions while reducing exposure to geopolitical shocks. By elevating Brazil as a strategic partner, the EU Brazil critical minerals agreement also diversifies away from single-country dependence in sensitive supply chains.

EU Brazil critical minerals agreement builds on Mercosur trade deal

The new framework for critical minerals cooperation comes as the EU signs a long-awaited free trade agreement with Mercosur. This broader deal creates a legal and commercial backbone for long-term investment in Brazil’s mining, processing and midstream industries. As a result, European OEMs and utilities gain clearer access to Brazilian lithium, nickel and rare earths under a stable trade regime.

EU leaders explicitly link critical minerals to the green and digital transitions, not just to raw material security. The EU wants Brazilian supply to feed battery plants, magnet producers and clean-tech manufacturers across the bloc. Meanwhile, joint projects in exploration, processing and ESG standards can lift Brazil’s role from simple ore exporter to integrated value chain partner.

The trade and minerals agenda also reflects Brazil’s own industrial policy. Brasília seeks to climb the value chain by promoting local processing, refining and technology transfer. EU financing, offtake contracts and technology cooperation can accelerate that goal and create more predictable long-term flows to European buyers.

China export controls keep rare earth risks in focus

China’s rolling export controls on medium and heavy rare earths remain the backdrop for this strategic pivot. Even with recent suspensions and simplified licensing, Beijing still holds powerful levers over global magnet and rare earth supply. European policymakers view these episodes as a warning that minerals can become tools of coercion in future disputes.

Therefore, the EU is racing to build parallel supply routes through partners like Brazil, Australia, Canada and the US. New agreements with Brazil complement EU critical raw materials partnerships already under way with other producer countries. In practice, this means more diversified sourcing of rare earths, battery metals and strategic by-products into European industry.

However, turning memorandums into molecules will take time and capital. Brazil must expand infrastructure, environmental permitting capacity and midstream processing to meet European demand. The EU, in turn, must mobilise public finance, de-risk long-term offtakes and align sustainability rules with commercial reality for miners and processors.

The Metalnomist Commentary

This deal underlines how trade policy and critical minerals strategy now move in lockstep. For metals and mining players, EU–Brazil alignment could unlock new funding, offtake and joint-venture structures over the next decade. The key question is how fast projects can move from political announcements to bankable assets before the next supply shock hits.

China and EU Resume Electric Vehicle Talks Amid Growing US Tariff Pressures

US tariff, China

Negotiations on Price Commitments Could Ease Trade Friction in the EV Market

China and the European Union (EU) have decided to resume negotiations regarding a price commitment mechanism for battery electric vehicles (BEVs). This decision follows the EU's implementation of countervailing duties on Chinese BEV imports in 2024. The goal of these talks is to replace the tariffs imposed on Chinese electric vehicles (EVs), addressing ongoing trade tensions between China and the EU.

EU's Countervailing Duties and the Push for a Price Commitment Mechanism

In October 2024, the European Commission finalized its ruling on countervailing duties on BEVs imported from China, which came into effect at the end of October. These duties ranged from 17% to 35.3%, impacting major Chinese automakers like BYD, SAIC, and Geely. The aim was to counter what the EU viewed as unfair pricing practices by Chinese EV manufacturers. However, these tariffs have faced opposition from both China and European companies seeking to expand their market share in the fast-growing electric vehicle sector.

Despite early talks on a price commitment mechanism in November 2024, the discussions stalled without significant progress. However, on April 10, 2025, China’s Ministry of Commerce announced that both sides had agreed to resume negotiations on the price commitments and to discuss broader issues of investment cooperation in the automotive industry.

US Tariffs Intensify the Pressure on China and the EU

The resumption of talks between China and the EU comes amidst escalating trade tensions with the United States. As of April 11, 2025, the US imposed a 145% tariff rate on imports from China, adding additional pressure on Chinese manufacturers, particularly in the electric vehicle and battery sectors. US President Donald Trump's tariffs, which were initially implemented in 2024, compounded by those under the Biden administration, have made it nearly impossible for Chinese EVs and lithium-ion batteries to enter the US market.

In an effort to counterbalance the US's growing tariff measures, China has been seeking closer economic ties with the EU. Chinese Premier Li Qiang held discussions with EU President Ursula von der Leyen on April 8, 2025, addressing the need for structural solutions to re-balance bilateral trade relations. The talks have emphasized the urgency of enhancing market access for European businesses in China and forging a collaborative approach to the challenges posed by US tariffs.

Potential Impact on the Electric Vehicle Market

If China and the EU reach an agreement on the price commitment mechanism, it could significantly alter the landscape for Chinese EVs in Europe. Prior to the implementation of the countervailing duties, the EU accounted for about 28% of China’s new energy vehicle (NEV) exports, which includes both BEVs and hybrid plug-in vehicles. However, the tariffs have drastically reduced Chinese EV exports to Europe.

The continuation of trade protectionist measures from both the US and the EU is putting immense pressure on China’s EV and battery markets, particularly as it struggles to enter key international markets. The future of Chinese electric vehicle exports largely hinges on these negotiations, and any breakthrough could bring Chinese-made EVs back into the competitive EU market.

EU CBAM export support moves to the top of Brussels agenda

EU CBAM

EU CBAM export support is moving closer as the European Commission considers a two-step aid mechanism. EU CBAM export support would offer “immediate” transitional relief for energy-intensive exporters facing rising carbon costs. As a result, EU CBAM export support is emerging as the key political trade-off between climate ambition and industrial competitiveness.

EU CBAM export support to start with transitional measures

The commission is preparing EU CBAM export support that begins with short-term, transitional tools. Officials indicated that a first phase of support would arrive “immediately,” ahead of a more permanent scheme. However, they have not clarified whether support will take the form of direct payments or carbon cost refunds.

Meanwhile, Brussels wants any EU CBAM export support to be WTO-compatible and legally robust. Industry groups argue that exporters cannot plan while details remain vague and timelines unclear. Fertilizers Europe is pushing to retain free ETS allocations for exports until 2030 as the “easiest solution.”

Debate deepens over free allocation and exporter ‘fairness’

The debate around EU CBAM export support centres on fairness for EU exporters under rising carbon prices. The commission is exploring using a share of CBAM revenues to finance long-term export support schemes. As a result, future CBAM cash flows could be recycled back into hard-pressed energy-intensive sectors.

However, fertilizer producers warn that simultaneous CBAM implementation and fast ETS phase-out could trigger widespread bankruptcies. They point to structurally higher EU energy prices that have already pushed margins to zero or below. Industry leaders now openly call for pausing the ETS reduction for CBAM-covered sectors until a final export mechanism is defined.

Politics, timing and the risk of policy fatigue

The political path for EU CBAM export support remains uncertain and highly contentious. Any legal act must pass the European Parliament and member states amid tight legislative calendars. Officials admit that securing agreement on all CBAM amendments before end-2025 would be “highly ambitious.”

At the same time, policymakers acknowledge that the fertilizer sector’s situation is “dire” and cannot absorb more shocks. Yet they are reluctant to dilute CBAM’s climate integrity or delay broader decarbonisation targets. This creates a narrow window where support must be generous enough to retain industry, yet disciplined enough to survive legal and political scrutiny.

The Metalnomist Commentary

Brussels is effectively trying to retrofit a CBAM export leg that was politically postponed during the original negotiations. The eventual shape of EU CBAM export support will signal how far Europe is willing to go to protect its mid- and downstream metals, fertilizer and hydrogen value chains. If delays continue, we should expect more calls for ETS pauses, higher import prices, and accelerated de-industrialisation risk in exposed sectors.

EU Ferro-Titanium Imports from Russia Decline in Q2, Surge in June Amid Sanctions

In a complex geopolitical landscape marked by sanctions and shifting trade patterns, the European Union's(EU) imports of ferro-titanium from Russia witnessed notable fluctuations in the second quarter of 2024. According to recent trade data, while overall imports during April-June fell to their lowest quarterly levels since the fourth quarter of 2022, June alone saw a significant increase, reaching a nine-month high. This paradox highlights the uneven impact of EU sanctions targeting Russian ferro-alloys at the year's midpoint.

During the second quarter, the EU imported 3,321 metric tons of Russian ferro-titanium, representing a 33% increase from the first quarter's 2,497 metric tons. However, this figure still marked an 11% year-on-year decline. Within the EU, member states accounted for 2,192 metric tons, while non-EU countries absorbed the remaining 1,129 metric tons— the highest share held by non-EU states since Q2 2022.

A significant trend observed in 2024 has been the redirection of Russian ferro-titanium exports towards non-EU states, particularly China and Turkey, amid increasing sanctions. Despite this, the Netherlands broke the pattern in June by importing 473 metric tons, the highest intake by any EU country this year, slightly surpassing Estonia's January intake of 468 metric tons.

Under Article 3i of the 12th EU sanctions package, the purchase, import, or transfer—directly or indirectly—of Russian ferro-titanium is prohibited, with allowances for pre-existing contracts. However, market insiders suggest that Russian ferro-titanium may still be entering the EU through specific channels.

Market analysts had anticipated a steady decline in EU imports throughout 2024 as contracts predating the sanctions expired. However, the surge in Dutch imports in June contrasts sharply with a notable decrease in Estonia's imports, which reached their lowest level this year. For the entire quarter, Estonia imported 910 metric tons, a decline compared to both prior periods.

In parallel, Estonia's re-exports of ferro-titanium in Q2 fell to 654 metric tons, with Latvia receiving 597 metric tons and the United States 57 metric tons. Interestingly, Latvia reported zero imports directly from Russia.

China's imports of Russian ferro-titanium surged to 460 metric tons in Q2, up from zero in both the previous quarter and the same period last year. Turkey also increased its imports to 483 metric tons during this period. The potential for any of this material to eventually enter the EU remains uncertain as the market adapts to the evolving sanctions regime.

Russian ferro-titanium prices in Europe averaged $5.80-6.23 per kilogram of titanium in Q2, up from $5.33-5.81 per kilogram in Q1. The price increase reflects rising production costs and, to some extent, follows Western market trends. As of August 15, prices were last assessed at $5.60-6.30 per kilogram, as Russian suppliers lowered their offers to clear stock ahead of more stringent sanctions set to take full effect by the end of the year.

EU and UK Move Toward Linking Carbon Markets

EU and UK

The EU and UK have formally agreed to work toward linking their carbon emissions trading systems (ETS), a move expected to benefit both industries and climate policy alignment. The announcement, made during a summit in London, emphasized that a EU and UK carbon markets link would support fair trade and reduce carbon leakage between jurisdictions. According to the joint statement, such a link would also exempt both regions from their respective carbon border adjustment mechanisms (CBAM), providing a more level playing field for domestic industries while maintaining environmental ambition.

ETS Link Could Unlock Significant Economic Gains

The linking of the EU and UK carbon markets could generate significant cost savings. UK Prime Minister Keir Starmer claimed British businesses could save £800 million in EU carbon taxes, while a recent industry-commissioned study projected up to €1.2 billion in savings from lower hedging costs due to improved market liquidity. While there is no timeline for implementation, market participants note that linking the Swiss ETS to the EU’s system took nearly a decade. Still, the potential economic efficiency and regulatory clarity have made the EU and UK carbon markets discussion a top priority for energy-intensive sectors across Europe.

Shared Climate Goals, Independent Ambitions

The agreement stressed that neither side should be constrained from pursuing more ambitious climate goals. The UK’s ETS remains guided by the legally binding Climate Change Act and its Paris Agreement commitments. The UK targets a 68% GHG reduction by 2030 and 81% by 2035, compared to 1990 levels. The EU aims for a 55% net reduction by 2030 and is still shaping its 2035 benchmark. Despite regulatory differences, both jurisdictions reaffirmed their commitment to net-zero emissions by 2050. The agreement also includes cooperation on hydrogen, CCS, biomethane, and a potential UK entry into the EU’s internal power market—further aligning EU and UK carbon markets within a broader clean energy framework.

The Metalnomist Commentary

The potential linkage of EU and UK carbon markets signals a return to pragmatic climate diplomacy. While structural alignment will take time, the economic and environmental incentives suggest both sides are committed to meaningful integration—setting a precedent for future carbon market collaborations globally.

Japan EU battery recycling alliance aims to cut China dependence

Japan, EU battery alliance

Japan EU battery recycling alliance marks a strategic push to reduce reliance on China in battery materials. The new Japan EU battery recycling alliance brings together key industry groups to strengthen recycling, black mass handling and data sharing. As a result, the Japan EU battery recycling alliance targets a more resilient and transparent battery supply chain across both regions.

Japan EU battery recycling alliance links tech strength and market scale

The Japan EU battery recycling alliance is built around three core industry associations. Japan’s Battery Association for Supply Chain, the European Battery Alliance and Brussels based Recharge have signed an initial agreement. Together, they will cooperate on improving recycling processes, materials flows and supply chain governance.

The agreement covers information exchange on issues such as data sharing and regulatory interpretation. It also includes joint studies on black mass classification, a key bottleneck for cross border recycling flows. Black mass refers to shredded cathode material containing nickel, cobalt and lithium from spent batteries. Therefore, clear definitions and standards for black mass are critical for trade, permitting and ESG compliance.

Japanese officials highlight the importance of combining Japan’s technology strength with Europe’s market size. Japan offers advanced recycling technologies and process know how developed over decades of battery manufacturing. Meanwhile, Europe provides a rapidly growing battery market driven by EV mandates and energy storage deployment. This mix gives the Japan EU battery recycling alliance strong industrial foundations.

Reducing strategic exposure to China dominated battery materials

The Japan EU battery recycling alliance clearly responds to geopolitical supply concerns. Officials from Japan’s trade and industry ministry note that the current battery supply chain depends heavily on one country. Although unnamed, the reference clearly points to China’s dominance in processed lithium, nickel, cobalt and anode materials.

By deepening cooperation, Tokyo and Brussels aim to reduce vulnerability to export controls or political friction. Recycling and black mass trade can partially offset primary supply risks from Chinese refineries and processors. In addition, improved data sharing should help track origin, quality and ESG performance of recovered materials. As a result, the Japan EU battery recycling alliance supports compliance with emerging battery passport and due diligence rules.

The initiative also fits within the broader Japan EU competitiveness alliance launched in July. That framework seeks closer coordination on semiconductors, clean energy, critical minerals and industrial standards. Battery recycling now becomes a visible test case for how quickly the partnership can move from statements to practical projects.

The Metalnomist Commentary

This partnership underlines how recycling is moving from a niche activity to a core pillar of battery security strategy. If the Japan EU battery recycling alliance can harmonise black mass standards and data systems, it will lower barriers for serious cross regional recycling investment. Market participants should watch for pilot projects, joint ventures and regulatory tweaks that follow this initial, largely framework level agreement.

EU Carbon Border Adjustment Mechanism Gains Parliamentary Support for 50-Tonne Threshold

EU CBAM

The EU carbon border adjustment mechanism (CBAM) received decisive parliamentary backing as the European Parliament's environment committee voted to implement proposed regulatory changes. The committee approved a minimum mass threshold of 50 tonnes for goods covered by the carbon border adjustment mechanism, effectively exempting approximately 90% of importers from CBAM requirements. This significant modification will streamline compliance while maintaining environmental effectiveness across key industrial sectors.

Parliamentary Vote Confirms CBAM Exemptions for Small-Scale Importers

The environment committee overwhelmingly supported the EU carbon border adjustment mechanism changes with 85 members voting in favor, only one against, and one abstention. Environment committee chair Antonio Decaro emphasized that amendments did not reopen other provisions of existing CBAM legislation. Therefore, the core framework of the carbon border adjustment mechanism remains intact while reducing administrative burden on smaller importers.

Meanwhile, the amendments clarify that CBAM applies to electricity importers but excludes power generated exclusively in European Economic Area countries. This exemption covers electricity from Iceland, Liechtenstein, and Norway imported into the EU. As a result, the EU carbon border adjustment mechanism maintains its focus on third-country imports while preserving regional energy cooperation.

Industrial Sectors Maintain Comprehensive CBAM Coverage Despite Exemptions

The revised EU carbon border adjustment mechanism will continue covering 99% of total CO2 emissions from imports of iron, steel, aluminum, cement, and fertilizers. This comprehensive coverage ensures that the carbon border adjustment mechanism achieves its environmental objectives despite the small-importer exemption. However, the 50-tonne threshold significantly reduces compliance costs for smaller trading companies and specialized importers.

Parliamentary negotiations with EU member states will finalize the legal text under Antonio Decaro's leadership. EU states aim to agree their position by the end of May, setting the stage for final approval. Therefore, the EU carbon border adjustment mechanism implementation timeline remains on track for full enforcement across affected industrial sectors.

The carbon border adjustment mechanism represents a cornerstone of EU climate policy, targeting carbon leakage from high-emission industries. These amendments balance environmental effectiveness with practical implementation concerns raised by industry stakeholders.

The Metalnomist Commentary

This parliamentary approval demonstrates the EU's commitment to implementing CBAM while addressing legitimate concerns about administrative burden on smaller importers. The 50-tonne threshold strikes a practical balance that maintains environmental integrity while reducing compliance costs, positioning the carbon border adjustment mechanism as a more workable trade policy tool for the global metals and minerals industry.

EU to Launch Aluminium Safeguard Probe Amid Rising Import Pressure

EU Aluminium

New U.S. Tariffs and CBAM Adjustments Prompt EU to Rethink Aluminium Trade Policy

Brussels Acts to Shield European Aluminium Industry

The European Commission will launch a safeguard investigation on 19 March to assess the need for trade defense measures on aluminium imports. This move responds to fears that U.S. tariffs will redirect global aluminium flows into Europe.

Washington reintroduced 25% import tariffs on steel and aluminium on 12 March, prompting the EU to act. European producers risk losing U.S. market access while facing increased inflows of diverted metal. Unlike steel, aluminium is not yet protected by EU safeguard measures.

Since 2021, over half of Europe’s aluminium smelting capacity has been curtailed. Today, just 46% of EU aluminium demand is sourced domestically. The Commission warns that continued pressure from imports threatens the survival of remaining producers.

New 'Melt and Pour' Rule and CBAM Reform

In addition to safeguard measures, the Commission will implement a new “melt and pour” rule. This rule defines the origin of metal products based on where they were originally melted—not where they were later processed. It aims to block minimal transformations that allow products to bypass tariffs or dumping duties.

The carbon border adjustment mechanism (CBAM) will also undergo revisions. The proposed update would extend the carbon levy to more aluminium- and steel-intensive downstream products. This adjustment addresses concerns that carbon-intensive imports could undercut EU-made goods, which comply with stricter climate rules.

The EU also plans to address carbon leakage. It will design compensation mechanisms for CBAM-regulated goods exported from the EU, with new anti-circumvention rules due in Q4 2025, before CBAM fully activates in 2026.

Scrap Export Restrictions and Demand Boosts Ahead

To secure domestic raw materials, the EU plans to tighten scrap metal export controls. The Commission will explore reciprocal restrictions on countries that limit scrap exports to the EU and may impose new charges on outbound scrap.

By the end of 2026, the EU will propose new demand-side targets for steel and aluminium usage in critical sectors like construction. These measures aim to support domestic producers while aligning with climate and circular economy goals.

EU Launches Review of Steel Import Safeguard Tariffs: Changes Expected from April 2025

The European Commission(EC)

The European Commission(EC) has officially launched a review of its steel import safeguard tariff-rate quotas, with proposed changes to take effect from 1 April 2025. This review, which follows a request by 13 EU member states on 29 November 2024, aims to address the evolving dynamics of steel imports into the EU. The focus will be on adjusting quotas, particularly in light of a contraction in EU demand and a rise in Chinese steel exports, which have led to shifts in trade flows.

Key Changes Under Review for Steel Safeguard Tariffs

The EC's review will examine several key aspects of the current steel import safeguard measures. Among the possible changes is the introduction of a new quota volume. EU steel producers have expressed concerns that current duty-free quota volumes no longer align with the demand in the EU, with some regions experiencing gaps due to shrinking consumption. Additionally, an increase in Chinese steel exports has led to an influx of steel from other countries into the EU market, further complicating the allocation of quotas.

The EC will reassess how these quotas are managed and allocated. Producers and users have been invited to provide feedback via a questionnaire, which must be submitted by 10 January 2025. Some of the other factors under evaluation include the exclusion of certain developing countries from the safeguard measures based on their 2024 imports, as well as potential updates to the level of liberalization within the quotas.

The steel safeguard measures, which were first introduced provisionally in 2018, became definitive in 2019. Initially set for a three-year period, they were extended for another year until June 2024 and then further extended until June 2026. Recent updates to these measures have had a noticeable impact on trade, particularly with the cap on hot-rolled coils (HRC) and wire rod quotas from ‘other countries’ being limited to 15% per origin. This has resulted in a significant reduction in import opportunities, especially for smaller markets.

The Impact of the Quota Review on Steel Imports

The current steel import safeguard measures have significantly impacted trade flows within the EU. In previous years, quotas would exhaust quickly after being reset each quarter, but the 15% cap on 'other countries' volumes has left a larger portion of the quotas underused. While there were expectations that some countries, like South Korea, could increase exports to the EU in April 2025 when residual quota volumes become available, the upcoming review could alter this outlook.

With EU imports largely unaffected by these changes so far due to a rush to buy final volumes before the duties apply, the redistribution of quotas will be a key focus of the review. The EC aims to ensure that the safeguard measures strike a balance between protecting EU producers and allowing for sufficient import access to meet demand. These changes, when finalized, could have significant implications for steel producers and importers alike, influencing trade relationships and steel prices in the EU market.

Russia EU CBAM Dispute Challenges Carbon Border Mechanism at WTO

Russia, EU CBAM

Russia EU CBAM dispute escalated to formal World Trade Organisation proceedings as Moscow challenges the European Union's carbon border adjustment mechanism. The Russia EU CBAM dispute claims the carbon pricing system violates multiple WTO agreements including the General Agreement on Tariffs and Trade 1994, potentially disrupting global metals trade and climate policy implementation across aluminum, steel, and iron sectors.

WTO Challenge Targets Multiple Trade Agreement Violations

Russia EU CBAM dispute allegations encompass comprehensive trade agreement breaches affecting critical industrial sectors. Moscow claims the carbon border mechanism violates the Agreement on Import Licensing Procedures and the Agreement on Subsidies and Countervailing Measures. Additionally, Russia targets specific WTO accession protocols for Bulgaria, Croatia, Estonia, Latvia, and Lithuania, broadening the dispute's scope beyond core EU institutions.

Meanwhile, the CBAM implementation schedule spans 2026-34 with carbon pricing applied to goods imported from aluminum, cement, iron, steel, electricity, fertilizers, ammonia, and hydrogen sectors. This phased approach affects major Russian export commodities, particularly metals and fertilizers that constitute significant portions of bilateral trade with European markets.

Export Subsidy Claims Challenge Free Allocation Calculations

However, Russia's primary objection centers on alleged "prohibited subsidies contingent upon export performance" within CBAM's design framework. Although the mechanism lacks specific provisions for EU export sectors, Russia considers free allocation calculations that include export values as discriminatory trade practices. This interpretation challenges fundamental CBAM architecture and carbon pricing methodologies.

Therefore, the dispute highlights tensions between climate policy implementation and international trade law compliance. Russia argues that EU domestic industry receives preferential treatment through free allocation systems while foreign competitors face carbon pricing burdens. This asymmetry allegedly creates unfair competitive advantages violating WTO non-discrimination principles.

Consultation Process Shapes Future Climate Trade Policy

Furthermore, mandatory 60-day consultations between Russia, the EU, and member states will determine dispute resolution pathways. If negotiations fail, Russia can request WTO panel adjudication, potentially creating precedent-setting rulings on carbon border mechanisms. The outcome influences global climate policy implementation and international trade law interpretation.

As a result, the Russia EU CBAM dispute represents broader conflicts between environmental regulations and trade liberalization principles. Major economies worldwide monitor these proceedings as they develop similar carbon border mechanisms. The WTO ruling could significantly impact future climate policy design and international carbon pricing coordination.

The Metalnomist Commentary

The Russia-EU CBAM dispute represents a critical test case for international trade law's intersection with climate policy, potentially establishing precedents that influence global carbon border mechanism development. While Russia's challenge primarily reflects economic interests in preserving metals and fertilizer export competitiveness, the dispute's resolution will significantly shape how nations balance environmental objectives with WTO compliance requirements.

EU presses China on critical mineral export licences as gallium, germanium and antimony supplies tighten

EU & China

EU presses China on critical mineral export licences as European stocks of key materials shrink. Officials raised the issue at the Antimony Day industry event in Brussels. EU presses China on critical mineral export licences to stabilise supply for industry and defence. Therefore, the dispute is moving from trade friction to strategic risk.

China began restricting gallium and germanium exports in August 2023. It then added antimony controls in September 2024. Companies must request licences from China’s commerce ministry and disclose end-use details. However, businesses say the process can require sensitive information.

China’s exports have dropped since controls began. China exported 7,520kg of germanium in January–September, down 71% versus 25,764kg in the same period of 2022. Meanwhile, European inventories have dwindled across key users. As a result, EU presses China on critical mineral export licences to reduce near-term disruption.

Defence and high-tech supply chains face the sharpest exposure

Gallium and germanium compounds support advanced defence technologies. They also enable high-frequency communications and threat-detection systems. Meanwhile, antimony links to flame retardants, alloys, and specialised applications. Therefore, supply shortages create direct industrial security concerns.

European Commission trade deputy director-general Denis Redonnet said the EU is asking China to “recalibrate” measures. He said the EU views the controls as a long-term industrial strategy. However, he said the EU is not yet at the countermeasure stage. Therefore, Brussels is signalling escalation risk while keeping diplomacy open.

EU considers countermeasures and accelerates stockpiling alliances

EU officials said countermeasures remain possible if disruptions worsen. They said any response will focus on immediate damage control and long-term resilience. Meanwhile, Europe’s decision-making spans trade, industry, energy, and diplomacy. As a result, action can move slower than in more centralised systems.

European Policy Centre chief executive Fabian Zuleeg said member states retain significant influence. The EU is also working with like-minded partners beyond the bloc. Therefore, joint purchasing, stockpiling, and alliances with mining countries are rising priorities.

The Metalnomist Commentary

Export licensing has become a strategic lever, not a simple trade tool. Meanwhile, Europe will need faster stockpiling and qualification of alternative sources. Therefore, buyers should contract diversified supply and build audited inventories for 2026–2027.

EU RESourceEU action plan accelerates EU critical raw materials supply security

EU, Critical Raw Materials

The EU RESourceEU action plan aims to harden Europe’s critical minerals resilience. European Commission will mobilise close to €3bn within the next 12 months. Therefore, the EU RESourceEU action plan turns the 2024 framework into faster financing.

Funding targets fast-deliverable molybdenum and lithium projects

The plan prioritises projects that can cut strategic dependencies quickly. The European Investment Bank and member states will support two flagship developments. Meanwhile, officials frame these as near-term supply wins.

The first backed project is Greenland Resources’ Malmbjerg molybdenum project in Greenland. The plan links molybdenum supply to defence-sector demand and security priorities. The second supported project is Vulcan Energy Resources lithium extraction project in Germany. As a result, the EU RESourceEU action plan tightens the link between finance and battery raw materials.

Scrap export controls and joint purchasing reshape circular supply

The EU RESourceEU action plan strengthens circular supply through targeted scrap controls. The plan restricts exports of scrap and waste from permanent magnets. It also introduces targeted measures for aluminium scrap to expand EU recycling capacity. However, the plan leaves the door open to copper scrap measures if needed.

The plan also creates a new governance layer for long-term execution. A European Critical Raw Materials Centre will launch from early next year to oversee supply chains. It will provide market intelligence, enable joint purchasing, support stockpiling, and catalyse investment. Therefore, the EU RESourceEU action plan shifts from ad-hoc response to structured procurement power.

The Metalnomist Commentary

The EU RESourceEU action plan signals a decisive pivot from policy intent to industrial action. Meanwhile, scrap controls will matter as much as new mining in tight markets. Therefore, Europe’s next advantage will come from coordinated purchasing and faster permitting discipline.

EU zero-tariff offer for US products aims to unlock trade while keeping sensitive goods protected

EU zero-tariff

The EU zero-tariff offer for US products sets out wide duty relief to defuse transatlantic tensions. The EU zero-tariff offer for US products targets industrial goods, plastics and selected agri-food via tariff-rate quotas. As a result, the EU zero-tariff offer for US products could secure a 15pc US tariff ceiling for EU exports, applied retroactively.

What the offer covers and why it matters

Brussels proposes zero tariffs on fertilisers, plastics, machinery, autos and parts, wood and pulp, paper, ceramics and leather. However, access will run through product-specific TRQs such as 25,000t for pig meat and 400,000t for crude soybean oil. The package also removes import duties on US-origin polyethylene. Therefore, EU manufacturers and farmers could see cheaper inputs and improved supply security. A safeguard clause allows the EU to suspend concessions if import surges threaten domestic industry.

What the offer excludes and the political trade-off

The plan excludes “sensitive” farm goods such as beef, poultry and ethanol. Meanwhile, the EU lists mineral fuels and a broad set of chemicals, reflecting industrial priorities over agriculture. Senior officials framed fertiliser access as a hedge against dependence on Russian supply. As a result, the offer balances cost relief for industry with protection for politically sensitive sectors. Final approval still requires the European Parliament and member states.

The commission expects the US to uphold a 15pc tariff ceiling on EU cars and parts once the deal is approved. Moreover, Washington would apply the ceiling retroactively from 1 August under the EU-US joint statement. Therefore, automakers could claw back costs tied to recent tariff uncertainty. Implementation details on rules of origin and monitoring will determine the real-world value.

The Metalnomist Commentary

The offer steers relief toward energy-intensive value chains while ring-fencing farm sensitivities. Watch how TRQ administration, rules of origin and the auto tariff ceiling interact; frictions there can erase headline gains. If fertiliser flows shift toward US supply, European ammonia and nitrate producers may push harder for safeguards.

Verde Magnesium Listed as EU Strategic Project

Verde Magnesium

CRMA recognition boosts Romania’s plan to revive European magnesium production

EU Backs Verde Magnesium for Local Supply Security

The EU has designated Verde Magnesium’s Romanian project as a strategic initiative under the Critical Raw Materials Act (CRMA). This decision aims to re-establish magnesium production within the EU for the first time in over two decades. Verde Magnesium will build an integrated mining and processing facility in Budureasa, Bihor County.

Currently, the EU imports 97% of its magnesium metal from China, creating significant supply risk. As a result, the EU seeks to diversify sourcing and enhance resilience through domestic production. Verde’s project aligns with this goal and will benefit from fast-tracked permitting and regulatory support.

Production Timeline and Investment Outlook

Verde Magnesium expects to begin commercial operations by the end of 2028. Initial production will range from 15,000 to 20,000 t/yr, increasing to 30,000 t/yr in 2030. By 2036, the facility aims to reach peak output of 90,000 t/yr.

However, earlier targets were delayed due to licensing issues with Romania’s National Agency for Mineral Resources. The company finally secured the mining licence in April, allowing development to move forward. Though CRMA designation does not guarantee EU funding, it may unlock institutional investment.

Strategic Material for EU Industry

Magnesium is vital for alloying in aluminium, automotive, aerospace, and defence applications. Its inclusion on the CRMA’s strategic materials list highlights its industrial importance. Verde CEO Alexandru Rosu said the site will become a low-carbon hub for extraction, processing, and recycling in Europe.

France’s Pechiney operated the EU’s last magnesium facility until Chinese imports forced its closure in 2001. Verde’s return could reduce reliance on volatile global supply chains and restore European production capability.

The Metalnomist Commentary

Verde Magnesium’s CRMA status reflects Europe’s intent to de-risk supply chains and revive critical material independence. With high demand across strategic sectors, restoring EU-based magnesium production is both a geopolitical and industrial imperative.

EU Steel Import Proposal Freezes Trade and Deepens Market Divide

EU steel

The EU steel import proposal has pushed the European steel market into a new standstill as stakeholders reassess risk and supply. Producers see the EU steel import proposal as a long-awaited shield against global overcapacity and unfairly priced imports. However, buyers and downstream manufacturers warn that the same EU steel import proposal could choke critical inflows, push prices higher and erode competitiveness just as demand remains fragile.

Buyers fear a ‘steel clamp’ on downstream manufacturing

Assofermet describes the new regime as a “steel clamp” on distributors and processors that depend on non-EU material to fill gaps. It argues that the 50pc out-of-quota duty and deep quota cuts could effectively shut many import routes and destabilise supply. As a result, downstream steel users face higher costs, thinner margins and greater difficulty competing in global export markets. European automakers share similar concerns. Acea notes that even though 90pc of their steel is sourced domestically, the remaining imported grades are essential for safety-critical and advanced components. However, the group warns that sharply lower quotas and a 50pc duty will remove an important pressure valve for a market already stretched by energy costs and decarbonisation demands. Acea also criticises the melt-and-pour origin rule, arguing that it will add heavy administrative load to complex automotive supply chains without clear proportional benefits.

Producers back tighter controls to restore utilisation and independence

In contrast, Eurofer hails the proposal as a “major leap forward” in defending EU steel from low-priced, high-volume imports. The association points to quota breaches “by triple digits in just two days” under current rules as proof that existing safeguards are too loose. Therefore, Eurofer sees the new tariff-rate quota structure as a way to maintain fair import access while preventing destabilising surges. The ultimate objective is to lift plant utilisation from unsustainable levels around 65pc back towards 80-85pc, which is vital for viability and decarbonisation investment. Eurofer also backs the melt-and-pour clause to improve traceability and deter circumvention via third countries, and wants future coverage extended to steel derivatives. Meanwhile, day-to-day trading has slowed sharply as mills, traders and buyers wait for clarity on timelines and country allocations. Import activity is likely to remain subdued until the proposal passes the EU’s legislative process and implementation details become clearer, leaving the market in limbo.

The Metalnomist Commentary

The EU steel import proposal underscores a widening policy divide between protecting primary production and safeguarding downstream competitiveness. If design and implementation lean too far toward insulation, the risk is a tighter, more expensive steel market that accelerates deindustrialisation rather than preventing it. The eventual outcome will hinge on how Brussels balances utilisation targets with the real needs of processors, automakers and exporters across the EU value chain.