Vedanta Aluminium Gears Up for EU’s CBAM Challenge
In line with global efforts to combat climate change, the European Union has introduced a significant measure—the Carbon Border Adjustment Mechanism (CBAM), designed to regulate the import of carbon-intensive products, such as aluminium, by charging a tariff based on the emissions produced during their manufacturing.
This tariff currently applies to six product categories – aluminium, iron and steel, hydrogen, electricity, cement, and fertiliser, irrespective of the product’s origin. The CBAM is set to come into effect in January 2026. In preparation, the European Union has already begun requesting reports on the carbon emissions of goods exported to the EU.
As the CBAM is also applied to aluminium, Vedanta Aluminium is filing reports on its Scope 1 emissions in compliance with CBAM requirements. According to Vedanta’s report, the company is progressively reducing greenhouse gas intensity through conscious efforts like including renewable energy in the power mix and expanding the usage of biofuels for smelting aluminium and deploying India’s largest fleet of electric forklifts across their operations.
John Slaven, CEO of Vedanta Aluminium said, “We are focusing on further diversifying our power portfolio through the increased use of renewable energy (RE) and sustainable alternatives such as biofuels. Towards fulfilling this aim, we have entered into long-term power delivery agreements to source an initial 1,335 MW of renewable energy. This will comprise a mix of both solar and wind energy, which will together contribute to powering Vedanta Aluminium’s operations across Odisha and Chhattisgarh. It will also result in a reduction of GHG emissions of ~3.2 million tonnes of CO2 per year, thereby contributing significantly to our decarbonisation efforts. In addition, we will deploy innovative new process technologies to decarbonise the value chain as and when they become commercially available.”
Beyond Scope 1 emissions, Vedanta has low-carbon aluminium products like Restora and Restora ULTRA. John Slaven said Vedanta would continue to meet the European Union’s growing demand for low-carbon primary products with Restora and Restora ULTRA, as even today, the EU is willing to pay a modest premium for the low-carbon products.
Vedanta Aluminium is committed to reaching net zero by 2050 and is actively working to reduce their carbon emissions.