Europe’s Aluminium Dilemma: Balancing Sanctions and Sustainability

The European Union faces a critical decision as it navigates the complex landscape of international trade, climate goals, and geopolitical tensions. The EU relies heavily on imports for over 90% of its aluminium needs, with 8-9% sourced from Russia. As it considers imposing sanctions on Russian aluminium imports, the EU must weigh the potential environmental and economic consequences. This move could increase the carbon content of its aluminium imports by as much as 14%, challenging the EU's commitment to its climate initiatives.

Russian aluminium is renowned for its low carbon footprint, primarily due to its production using hydropower. If the EU opts for a ban, it will need to secure approximately 500,000 tonnes of material annually from alternative sources. This shift would likely disrupt international supply chains and drive up metal prices, posing significant challenges to European consumers who rely on Russia's competitively priced, low-carbon aluminium.

The ripple effects of such a ban would extend beyond Europe. China, for instance, stands to benefit from increased Russian aluminium exports. Russia has already ramped up its aluminium shipments to China, potentially altering global trade dynamics in the sector. Meanwhile, the Middle East emerges as a potential alternative supplier for the EU. However, this option comes with its own set of environmental concerns. Aluminium production in some Middle Eastern countries could lead to increased coal-fired production in nations like India and Indonesia, further complicating the EU's climate objectives.

The environmental implications of sourcing aluminium from non-Russian suppliers cannot be overlooked. Currently, producing one tonne of aluminium in Russia emits approximately 2.1 tonnes of CO2, significantly lower than the global average of 15 tonnes. A shift away from Russian aluminium could undermine the EU's efforts to maintain its climate commitments.

The EU's ambitious climate strategies, including the Green Deal and the Carbon Border Adjustment Mechanism (CBAM), aim to penalise high-carbon imports beginning in 2026. These initiatives underscore the EU's dedication to reducing its carbon footprint and achieving sustainability targets. However, a ban on Russian aluminium imports may conflict with these goals by inadvertently increasing emissions through alternative sourcing methods.