The 2025 Autumn Budget has delivered a mix of opportunities and challenges for the UK metals industry. For our aluminium manufacturing and processing community, several announcements could have a significant impact.
Below is a summary of the most relevant developments, and what we encourage you to think about next.
What’s New (and What to Watch)
• CBAM Indirect Emissions Deferred: The government confirmed that indirect emissions (e.g., electricity usage) will not be included under the UK’s Carbon Border Adjustment Mechanism (CBAM) when it comes into force in 2027. Instead, these will be considered from 2029 at the earliest. This delay reflects the need for continued support for energy-intensive industries, and offers important breathing space for those heavily reliant on electricity.
• Technical Revisions to CBAM Framework: Several crucial changes were made to CBAM’s structure. These include sector-average emissions-based free-allowance calculations, recognition of carbon costs already paid under other CBAM regimes, and exemptions for UK-produced precursor goods in complex imports to avoid double carbon pricing. For businesses that refine, treat or process aluminium, this reduces risks of overburdening and double-charging under CBAM.
• Energy & Competitiveness Signals – But Help Is Still 2 Years Away: The Budget confirms the Government’s plan to introduce the British Industrial Competitiveness Scheme (BICS), which aims to cut electricity costs for manufacturers. However, support under BICS is not scheduled to begin until 2027, leaving many firms facing uncompetitive energy costs in the near term. This has already raised concern within the manufacturing community. More details to be shared soon – anyone part of the Supercharger scheme will not be eligible for BICS as well.
• Wider Business Environment Still Challenging: Despite some supportive measures, the overall context remains difficult. The 2025 Budget has generated fresh warning from industry bodies such as Make UK, which argues that ongoing cost pressures, including rising energy and labour costs, risk further deindustrialisation if not addressed urgently.
What ALFED is Doing and What We Ask of You
“The Budget acknowledges many of the pressures facing the aluminium and metals sectors, but support such as BICS needs to come sooner, not in 2027 – some businesses will not have that long to wait. We must now work together to ensure the relief arrives in time to protect UK capacity, investment and jobs.”
— Nadine Bloxsome, CEO, ALFED
ALFED is already engaging with Government and industry partners on the following:
• We will coordinate a sector-wide response to the BICS consultation, backed by members.
• Through our UK Aluminium Alliance, we are building a robust evidence base to support energy, scrap, and downstream processing as critical to the UK’s industrial strategy.
• We will continue to monitor CBAM implementation closely and ensure that aluminium sector interests are represented in both legislation and compliance
guidance. As part of this, the ALFED policy team will be attending the “One Month to Go Until EU CBAM: Final Readiness Summit” on 28 November, to gather the latest practical insights on EU CBAM, the move to actual embedded emissions data, and the emerging UK CBAM regime, and will feed these directly into our member briefings and policy work.
We encourage all members to:
• Review their energy use and cost forecasts in light of delayed BICS relief.
• Prepare for CBAM compliance, but note the changes reduce some of the initial burden (e.g., on imports, precursor goods, free allowances).
• Share data with ALFED where possible, particularly on energy usage and scrap flows, to support our policy work and consultation responses.
Industry Context & External Voices
• Make UK has warned that unless energy costs are addressed, the survival of many manufacturers is at risk, underlining the urgency for practical measures, not long-term pledges.
• The Cast Metals Federation has noted that while the Industrial Strategy and Budget offer some positive signals, the timeline for relief and investment remains too slow for many firms to remain competitive.
Bottom Line: Now Is the Time to Engage, Not Wait
Budget 2025 contains some important steps in the right direction, but for many aluminium businesses, the real pain lies in today’s energy costs, not in promises for 2027. ALFED will continue to press Government for faster action and stronger support. We urge all members to remain engaged, share data, and help shape the sector’s response, because the decisions we make now will determine whether UK aluminium remains competitive and sustainable over the coming decade. If you have questions or want to discuss how these changes affect your business specifically, please contact nbloxsome@alfed.org.uk
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