Italy’s foundry sector is facing an acute crisis, with industry representatives warning that production could soon come to a standstill due to structural flaws in the EU’s Carbon Border Adjustment Mechanism (CBAM).
During a roundtable discussion at the Ministry of Enterprise and Made in Italy (MIMIT) with energy-intensive industries, Assofond, the Italian foundry trade association, cautioned Enterprise Minister Adolfo Urso that the sector is “on the verge of a production shutdown.”
While CBAM was introduced to prevent carbon leakage, Assofond argues that its current regulatory scope is having the opposite effect on European foundries. EU foundries are forced to import key raw materials such as pig iron and ferroalloys, as domestic supply is insufficient, and must pay carbon-related costs of up to 35 percent.
By contrast, non-EU producers can source raw materials domestically or at low cost from Russia, manufacture finished or semi-finished products, and export them to Europe without CBAM-related charges, as these products fall under customs codes currently excluded from the mechanism.
Competitiveness and downstream risks
According to Assofond president Fabio Zanardi, the industry is experiencing extreme fragility, driven by high energy costs, weak demand, and shrinking margins. The added carbon cost burden risks making European foundries uncompetitive against non-EU producers, potentially accelerating plant closures.
Zanardi also warned that a shutdown of foundries would have serious consequences for strategic downstream sectors, including automotive, mechanical engineering, construction, and energy, all of which rely heavily on domestic cast products.
Industry calls for urgent policy adjustments
To prevent what it described as irreversible deindustrialization in Italy and Europe, Assofond has urged MIMIT to take immediate action. The association is calling for an extension of the CBAM transition phase to 2026–2027, converting it into an “evaluation period”, and for the inclusion of additional customs codes to eliminate the competitive advantage currently enjoyed by non-EU producers.
“Without this correction,” Zanardi said, “the mechanism will not protect the environment but will instead undermine Europe’s most virtuous industries in favor of more polluting non-EU production.”
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