Copper is essential to Europe’s energy transition, supporting electricity grids, renewable power generation, electric vehicle charging, data centres and industrial electrification. Yet the metal remains outside the European Union’s current Carbon Border Adjustment Mechanism (CBAM) coverage, creating a potential disadvantage for domestic smelting and refining at a time when the bloc is seeking to strengthen its strategic raw materials supply chains.
The gap raises questions about whether Europe’s carbon-border policy adequately supports domestic copper processing or leaves European producers exposed to international competition despite facing EU climate compliance costs.
European Copper Imports Rise in Value
Eurostat data show that EU copper imports reached approximately €17.2 billion in 2025, compared with €10.7 billion in 2019, while import volumes remained broadly stable. Chile accounted for 23% of import value, followed by the Democratic Republic of Congo at 17% and Brazil at 15%.
Although copper supply is relatively diversified compared with some other critical materials, Europe remains a major net importer. This dependence makes the competitiveness of domestic smelting and refining increasingly relevant to industrial security. As demand for copper-intensive infrastructure grows, the ability to process raw materials within Europe could become an important part of efforts to reduce external supply-chain risks.
Copper Processing Carries Significant Energy Costs
Copper production involves several stages, from concentrate preparation and smelting to converting, refining and producing cathode copper. The refined metal is subsequently used to manufacture wire rod, tubes, foil and other industrial products.
Each stage has its own energy requirements and emissions profile. Electricity consumption, fuel use, oxygen production and process chemistry all influence the environmental footprint of copper processing.
European smelters and refineries must account for applicable EU Emissions Trading System (ETS) costs and manage energy expenses that can affect their competitiveness. However, imported refined copper does not face a direct CBAM charge under the mechanism’s current scope.
This creates a regulatory asymmetry: European copper processors can face carbon-related operating costs while competing with imported refined metal that is not subject to the same direct border mechanism. Unlike covered aluminium and selected iron and steel products, copper does not currently receive equivalent carbon-border treatment.
CBAM Exclusion Complicates Investment in European Refining
The absence of direct CBAM coverage weakens one potential component of the business case for new European copper smelting and refining capacity.
Projects may still benefit from strategic status under the Critical Raw Materials Act (CRMA), integration with recycling operations, secure concentrate supplies and long-term demand from industrial customers. Traceability and reliable delivery can also support commercial relationships with manufacturers seeking greater supply-chain transparency. Investors cannot assume that European copper production will receive the same carbon-border protection available to covered metals.
For prospective projects, competitiveness will therefore depend heavily on electricity prices, processing efficiency, access to feedstock, financing conditions and the ability to secure long-term offtake agreements.
Low-carbon electricity and advanced processing technologies could help reduce operating costs and emissions, while recycled copper may provide an additional source of feedstock. Nevertheless, these advantages must be sufficient to support commercial returns without relying on a CBAM benefit that does not currently apply.
Rising Copper Demand Increases Europe’s Supply-Security Challenge
Europe’s demand for copper is supported by investment in electricity networks, renewable energy, electric vehicle charging, electrified heating and data centres. These applications require substantial quantities of conductive metal, reinforcing copper’s strategic importance.
If domestic refining capacity declines while consumption increases, dependence could shift further downstream. Rather than relying primarily on imported ores or concentrates, European manufacturers could become increasingly dependent on refined copper and semi-fabricated products produced elsewhere.
This would complicate efforts to build resilient industrial supply chains and retain more processing value within the European economy. The issue is particularly relevant as the EU pursues its critical raw materials objectives. Access to mineral resources alone does not guarantee security of supply if processing capacity remains concentrated outside Europe.
Low-Carbon Power and Recycling Could Strengthen Copper Projects
For European copper producers, the most immediate routes to stronger competitiveness include efficient processing technology, access to affordable low-carbon electricity, recycling integration and reliable concentrate supply.
Recycling can reduce dependence on primary feedstock and support circular material flows, although the availability and quality of scrap influence how much secondary copper can contribute to overall supply.
Long-term offtake agreements with grid operators, renewable energy developers and industrial manufacturers could also improve revenue visibility for new processing facilities. For banks and investors, the central question is whether these operational and commercial advantages can offset the absence of a direct CBAM mechanism while covering the capital and energy requirements of copper refining.
Could Copper Become the Next Test for CBAM?
Copper highlights a broader policy question about the relationship between carbon regulation, industrial competitiveness and strategic material security. Europe seeks to expand domestic processing, but the current CBAM framework does not cover every energy-intensive metal that supports its industrial transition.
Any future expansion would require regulatory decisions about product coverage, emissions accounting and the relationship between border measures and domestic carbon pricing.
For now, European copper smelters and refineries must compete without the direct CBAM protection available to certain other metals. Whether low-carbon power, recycling, technological improvements and strategic supply agreements can sustain new investment will be central to Europe’s ability to strengthen its copper processing industry. Copper could consequently become an important test case in future discussions about extending the EU’s carbon-border policy beyond its original covered sectors.
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