The LME is dedicated to supporting and promoting ethical and sustainable practices in the metals industry. After establishing ethical sourcing regulations in 2019 and introducing their digital sustainability credentials register, LMEpassport, in 2021, they are now looking to build on their previous work by seeking feedback on proposals to further drive progress in the rapidly changing sustainability landscape.
Their consultation and discussion papers released in May 2024 are encouraging input on how to best address the upcoming regulatory changes and how to assist the industry's advancement towards a more sustainable future.
Consultation paper: Proposed LME Action on the Carbon Border Adjustment Mechanism (CBAM)
What is CBAM?
The CBAM is a policy of the EU aimed at reducing carbon leakage by imposing a cost on certain carbon-intensive goods, such as aluminum, that are imported into the EU. The CBAM regulation is designed to ensure that imported goods pay a price for their carbon emissions that is comparable to the price paid by domestic EU producers under the EU's Emission Trading System (ETS), thereby discouraging the relocation of production to countries with less strict environmental policies.
What is their proposal?
They suggest implementing new requirements from March 2025 for producers of all LME-listed aluminum brands (including primary aluminum, aluminum alloy, and NASAAC) to upload verified emissions data to the LME's digital credentials register, LMEpassport, in accordance with the EU CBAM regulation.
How can this help aluminum industry participants?
Integrating the reporting of aluminum emissions seamlessly into LMEpassport would benefit industry participants in the following ways:
- facilitating the smooth flow of information across the value chain
- reducing the administrative burden for producers by providing a centralized platform for emissions data
- empowering market participants with accurate data to make well-informed decisions.
The proposal aims to pave the way for the integration of additional regional policy changes that are expected to come.
Discussion paper
Their discussion paper seeks the opinions of the market on seven key areas:
Key timings and feedback
The CBAM consultation and sustainability discussion paper periods are both open until 14 June 2024, 17.00 (BST).
Afterwards, the LME will consider any market feedback received with the goal of publishing a response paper outlining the next steps in the latter part of the year.
