European copper smelters and refineries face carbon-related operating costs without the direct border protection available to producers of certain other metals under the European Union’s Carbon Border Adjustment Mechanism (CBAM). The gap affects investment conditions for a metal essential to electricity networks, renewable energy, data centres and electrification, as Europe seeks to expand domestic raw-material processing.
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, the Democratic Republic of Congo for 17% and Brazil for 15%. Although supply is relatively diversified compared with some smaller critical materials, the EU remains a major net importer of copper.
Refining Costs Create a Competitive Disadvantage
Copper concentrate must pass through drying, smelting, converting and refining before producing cathode for manufacturing wire rod, tubes, foil and other products. Electricity, oxygen, fuels and process chemistry all influence emissions throughout these stages.
European processing installations face exposure to the EU Emissions Trading System (ETS) and high electricity costs. Imported refined copper does not incur a direct CBAM charge under the current framework, leaving domestic refiners without the same border-carbon protection available to aluminium and covered steel products.
This distinction weakens one element of the investment case for new European smelting and refining capacity. Projects can still benefit from Critical Raw Materials Act (CRMA) strategic status, integrated recycling, secure concentrate supplies and demand for traceable metal, but cannot assume equivalent CBAM protection.
Rising Copper Demand Raises Supply Security Concerns
European demand is supported by investment in electricity grids, electric-vehicle charging infrastructure, electrified heating and data centres, all of which require substantial quantities of copper.
If domestic refining capacity declines while consumption increases, supply dependence could shift further from imported ore towards refined copper and semi-fabricated products. This creates additional challenges for Europe’s objective of strengthening domestic raw-material processing.
Financing European Copper Processing Projects
For lenders, assessing European copper refineries requires evaluating whether projects can remain competitive through low-carbon electricity, efficient processing technology, recycling integration and premium offtake agreements without a direct CBAM mechanism.
Copper therefore presents a test of whether the EU’s carbon-border policy will eventually extend beyond its original six covered sectors, particularly as the bloc seeks to strengthen domestic processing capacity for strategic industrial metals.
