CBAM Aluminium Calculation: How to Compute Embedded Carbon for Primary and Secondary Aluminium

CBAM Aluminium Calculation Formula

For aluminium products under CBAM Annex I:

SEE = (DE + IE_electricity + ΣEE_precursors) ÷ AL

The critical difference from steel: IE_electricity is in scope for aluminium. For a primary smelter, electricity consumption is approximately 13–15 MWh per tonne of aluminium. The grid emission factor of the smelter location therefore drives the dominant share of embedded emissions.

Primary Aluminium Calculation (Electrolysis)

For primary aluminium produced by Hall-Héroult electrolysis:

• Direct emissions: anode consumption (carbon anodes oxidised in the electrolysis cell), perfluorocarbon (PFC) emissions from anode effects, and any auxiliary fuel combustion. Typical: 1.5–2.0 tCO2e/t.
• Indirect emissions from electricity: 13–15 MWh/t × grid emission factor. At a coal-heavy grid (0.85 tCO2/MWh), this is 11–13 tCO2e/t. At a hydro grid (0.04 tCO2/MWh), this is 0.5–0.6 tCO2e/t.
• Precursor inputs: alumina (refined from bauxite) at typical embedded emissions of 0.5–1.0 tCO2e/t alumina.

Total primary aluminium actual embedded emissions range from 2 tCO2e/t (hydro-powered smelters in Iceland, Norway, Mozambique) to 18+ tCO2e/t (coal-powered smelters in China, Australia legacy). The EU default of 12.40 tCO2e/t reflects the global average weighted toward grid-mix electricity.

Secondary Aluminium Calculation (Scrap-Based)

Secondary aluminium produced from scrap has dramatically lower embedded emissions because it bypasses the energy-intensive electrolysis step:

• Direct emissions: melting fuels (typically natural gas), refining additives. Typical: 0.20–0.50 tCO2e/t.
• Indirect emissions from electricity: approximately 0.5–1.0 MWh/t × grid emission factor. Low.
• Precursor inputs: scrap is treated as recycled input with zero embedded emissions for CBAM purposes.

Total secondary aluminium actual embedded emissions: 0.30–0.80 tCO2e/t. The saving versus the 12.40 default is approximately EUR 760–790/t at the current ETS price band — the largest per-tonne saving available under CBAM.

Why Smelter Location Dominates the Calculation

For primary aluminium, the smelter's grid emission factor accounts for 80%+ of total embedded emissions. This is why hydro-powered smelters in Iceland, Norway, and the Mozambique Mozal facility have a structural advantage in EU aluminium markets. It is also why a coal-powered Chinese or Indian smelter cannot economically reach low actual values without grid decarbonisation — the calculation is dominated by something the smelter operator does not directly control.

This is the most powerful argument for documenting actuals: a UAE smelter (gas grid, ~0.45 tCO2/MWh) versus a Chinese coal-powered smelter (~0.85 tCO2/MWh) producing physically identical aluminium will have very different CBAM exposures. Without documented actuals, both pay the same default rate.