06/17/2026
New report: The Effect of a U.S. Border Carbon Adjustment on the Aluminum Industry and Trade
An Assessment of the Foreign Pollution Fee Act (FPFA) and the Clean Competition Act (CCA).
We are pleased to announce the publication of our new report. This report by Global Efficiency Intelligence examines two leading U.S. border carbon adjustment proposals and their potential implications for the aluminum industry, trade flows, government revenue, and GHG emissions.
Using detailed trade, production, and emissions data, we model the impacts of both policies on U.S. aluminum imports through 2030 and evaluate key policy design considerations. The analysis highlights important trade-offs between trade disruption, supply security, revenue generation, emissions reductions, and long-term policy coherence.
Among the key findings:
• The Foreign Pollution Fee Act (FPFA) would drive larger and more immediate changes in aluminum trade patterns but carries higher supply disruption risks.
• The Clean Competition Act (CCA) would produce more gradual market adjustments while providing dedicated funding for domestic and international decarbonization.
• Strategic reinvestment of border carbon revenues could significantly accelerate decarbonization of the aluminum industry in the U.S. (and globally).
• Transitioning U.S. aluminum smelters to 80% renewable electricity plus storage would require about $360 million per year ($1.8 billion over five years), delivering roughly 3.8 Mt CO₂ annual emissions reductions (~80%) at an abatement cost of $90–95/tCO₂. This funding need is modest relative to projected revenues under the FPFA and CCA.
The report also proposes a revenue distribution framework and identifies several policy design improvements that could strengthen future U.S. border carbon adjustment policies.
You can download the report from this link:
Members of both parties in the U.S. Congress have put forward several proposals for Border Carbon Adjustment (BCA) policies, also referred to as border carbon fees to address carbon leakage and protect the competitiveness of domestic energy-intensive industries. Aluminum is central to this debate. I...