Russian aluminium's share in EU imports falls amid sanction pressure

The European Union's approach to Russian primary aluminium imports has significantly transformed in a landscape marked by evolving geopolitical tensions, as revealed by a recent report by Eurasia Strategic Consulting.
While presently, any formal sanctions on Russian aluminium remain absent, other than the earlier ban on the aluminium wire rod, foil, tubes, and pipes supplied from Russia, the practical reality of self-sanctioning by European importers and the ripple effects of secondary sanctions have dramatically altered the market dynamics.
This decline comes amid a broader downturn in EU-Russia trade relations, exacerbating the effects of ongoing economic sanctions. The European Union is now facing mounting calls from pressure groups, industry lobbyists, and politicians across several member states to incorporate sanctions on Russian aluminium into the upcoming EU sanctions package.
Sanctions on Russian primary aluminium could sharply drive up prices in the EU, jeopardize net zero goals, and disrupt aluminium-consuming industries. This would likely lead to job losses and company closures, especially among SMEs, representing 70 per cent of turnover and 92 per cent of employment in the sector. These SMEs might face shortages and higher costs, pushing them to purchase higher-carbon aluminium from coal-fired smelters. As a result, the influx of higher-carbon aluminium into the EU would increase, becoming more expensive after carbon import taxes (CBAM) are implemented in 2026.
Aluminium produced in Russia benefits from low carbon emissions, with around 2.1 tonnes of CO2 per tonne of aluminium (Scope 1 and 2), due to its use of hydroelectric power. In contrast, aluminium from countries like China and India, which may increase exports to the EU without Russian aluminium, can have a carbon footprint of 15-20 tonnes per tonne, compared to the world average of 15 tonnes.
Sanctions on aluminium imports from Russia to the EU are unlikely to impact the Russian aluminium industry or its economy significantly. RUSAL, the leading producer, is already shifting its focus, with exports to China tripling over the past three years. Cooperation between Russia and China in alumina and aluminium is growing.
The EU sanctions will have minimal effect on the Russian energy sector. Although Russian Aluminium’s production and sales increased in early 2024—export volumes were up 30 per cent in January—the impact of EU sanctions on energy usage is negligible compared to total consumption.