Brazilian aluminium and steel exporters face urgent pressure to certify emissions under the EU’s Carbon Border Adjustment Mechanism (CBAM), as trade dynamics shift amid compliance challenges and premium fluctuations.
Brazilian aluminium exports and Rotterdam premiums
Brazilian aluminium exports to Europe faced a 43.9% drop in billet shipments and a 47.3% decline in ingots during January-June 2026, according to government data cited by Fastmarkets. However, exports rebounded after February 2026 as Middle East tensions boosted European premiums. Between March and June, aluminium ingot shipments to Europe rose 61.9% year-on-year to 40,564 tonnes, driven by higher premiums that offset CBAM-related costs. Fastmarkets assessed the P1020A aluminium premium in Rotterdam at USD 500-530 per tonne on July 21, up from USD 320-350 in January, with CBAM certificate costs included.
Steel exports told a different story.
Rafael Della Barba and emissions accounting
Rafael Della Barba, climate risk coordinator at WayCarbon, highlighted the complexity of CBAM compliance for Brazilian exporters. Companies must calculate emissions at the product level, covering production routes and traceability, he said. Those unable to demonstrate lower emissions may rely on default values, reducing Brazil’s clean energy advantage. This has spurred a rush to improve emissions accounting, with some steel producers preparing since 2023 and others scrambling to understand their exposure.
On July 10, 2026, Della Barba told Fastmarkets, “I see two waves. In 2023, we worked with some companies, mainly in the iron and steel sector, with the products that would be included in this initial phase, largely with the intention of already taking part in that stage. It wasn’t mandatory at the time, but they wanted to be prepared.” He noted that the mechanism’s design further complicates compliance. CBAM counts only direct emissions, excluding electricity—a key factor in Brazil’s relatively clean energy matrix. Electricity-driven differences stay invisible, Della Barba observed.
On April 7, 2026, the European Commission priced carbon at the border for the first time, with a CBAM certificate for the first quarter costing EUR 75.36 per tonne of CO2 equivalent, and EUR 75.28 for the second quarter. The logic seems obvious from here: the dirtier the metal, the more the border charges, clean producers win, coal-based producers lose. However, a deeper analysis reveals that the system rewards the best-organised paperwork
rather than the cleanest production.
ASEAN manufacturing and low-carbon production
Industrial transitions have always changed the types of jobs economies require, and the shift toward low-carbon production is no exception. Companies will need engineers specialising in renewable energy, industrial electrification, and energy-efficient manufacturing, alongside experts in carbon accounting, emissions monitoring, and sustainable supply-chain management. The transition could also strengthen ASEAN’s competitiveness. Multinational companies are now weighing carbon intensity alongside labour costs when deciding where to invest. Countries that develop cleaner energy systems and low-carbon manufacturing capabilities are likely to become more attractive destinations for investment. ASEAN is well positioned to benefit from this shift, given its abundant renewable energy resources, expanding manufacturing capacity, and young workforce. If governments invest in clean infrastructure, workforce development, and industrial upgrading, ASEAN could reinforce its position as a global manufacturing hub rather than lose ground to other regions.
European Parliament draft proposal
The EU’s broader application of its carbon pricing framework on imports has raised concerns among trading partners, including India, over potential cost pressures. The European Parliament’s draft proposal, which recommends expanding CBAM to additional steel- and aluminium-based items, signals a shift in approach. This expansion would mean that exporters of value-added products, not just base metals, could face new challenges. The EU’s move underscores the growing influence of carbon-linked trade rules in shaping global markets.
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