AICE Expert Insights | Enterprises Must Accelerate Low-Carbon Transition to Transform Compliance Pressure into Market Differentiation Advantages

02Expert Insights

"EU regulations present both challenges and a watershed moment for the aluminum industry. Enterprises must accelerate low-carbon transformation through technological innovation, supply chain collaboration, and third-party professional services (e.g., SGS), turning compliance pressure into market differentiation advantages."

Core Impacts on the Aluminum Supply Chain

1. Surging Cost Pressures

High-carbon aluminum enterprises (reliant on coal power) face CBAM certificate costs and must reassess export viability. Supply chain upgrades (e.g., green electricity substitution, process improvements) require upfront investments, disproportionately affecting small and medium-sized enterprises.

2. Increased Compliance Complexity

Enterprises must establish life cycle carbon footprint accounting systems (Scope 1-3), relying on third-party certifications (e.g., SGS’s ISO 14064, PAS 2050). Due diligence demands granular supply chain data (e.g., alumina sources, aluminum scrap recycling pathways), potentially forcing supply chain transparency.

3. Trade Barrier Risks

EU buyers may prioritize low-carbon aluminum (e.g., hydropower aluminum, secondary aluminum), threatening orders for traditional high-carbon capacity. Regional green trade alliances (e.g., US-EU "Steel and Aluminum Club") could squeeze China’s market share.

Potential Opportunities and Transformation Pathways

1. Seizing the Low-Carbon Aluminum Market

Expand green power aluminum capacity (e.g., Yunnan hydropower aluminum) and increase secondary aluminum ratios (China’s aluminum scrap recycling rate below 30%, with high potential). Develop low-carbon certified products (e.g., ASI certification, EPD declarations) to meet EU buyer preferences.

2. Supply Chain Digitization and Collaboration

Leverage blockchain for carbon data traceability (e.g., tracking emissions from bauxite to end-use products). Collaborate across supply chains to build green industrial clusters (e.g., green electricity partnerships with energy firms, closed-loop recycling systems with automakers).

3. Policy Incentives and Financial Tools

Utilize domestic carbon markets and green credit to offset transition costs. Explore carbon tariff cost-sharing mechanisms with EU clients to jointly bear low-carbon premiums.

For in-depth analysis, join the [Aluminum Industry Chain Sustainable Development Forum] hosted by AICE Aluminum Industry Expo at Suzhou International Expo Center on April 17, 2025!