CBAM for Indian exporters: what steel and aluminium suppliers must provide
For Indian exporters, CBAM means the EU importer pays for the carbon embedded in your steel or aluminium, and the importer needs your data to work out how much. Since 1 January 2026, imports of iron, steel and aluminium into the EU carry a CBAM certificate obligation. An Indian producer that can supply verified, installation-level emissions data helps its customer pay less than the conservative default values would imply.
CBAM India: who carries the obligation and why exporters still matter
The legal obligation under the EU Carbon Border Adjustment Mechanism sits with the EU importer, who must be an authorised CBAM declarant once its CBAM imports exceed 50 tonnes in a calendar year. The importer declares the embedded emissions of the goods it imported and surrenders CBAM certificates to cover them. The first annual declaration, for goods imported in 2026, is due by 30 September 2027. For background on the definitive period, see our CBAM definitive period overview.
The Indian exporter has no filing duty in the EU, but it controls the one input that drives the cost: the embedded emissions of the goods. If the importer cannot obtain verified actual data from the producing installation, it must use the Commission's default values, which include a mark-up that rises each year. In practice, the CBAM impact on Indian exporters shows up as customer questions, data requests, contract clauses and price negotiations.
The India–EU free trade agreement concluded in January 2026 did not exempt Indian goods from CBAM. Any future flexibility depends on EU decisions, so plan on the rules as they stand.
What CBAM covers for Indian steel and aluminium
Coverage is defined by CN (customs) codes. For iron and steel this runs from inputs such as pig iron, ferro-alloys and direct reduced iron through semi-finished products to many downstream items — flat and long products, tubes, wire, fasteners and some structures. For aluminium it covers unwrought aluminium and a range of products such as bars, plates, foil, tubes and some structures. Check each CN code you export against the current annex rather than relying on product names.
A Commission proposal from December 2025 would extend CBAM to further downstream products that contain steel and aluminium. The European Parliament adopted its position in September 2026, but the extension is not yet law. Exporters of components and fabricated goods should track it.
Direct emissions only, for steel and aluminium
In the definitive period, CBAM steel and aluminium goods carry only direct emissions in the certificate calculation. Indirect emissions from electricity consumption count for cement and fertilisers, not for steel or aluminium (with a narrow exception for sintered ore used as a precursor in steel). That matters for Indian aluminium smelters, whose largest emissions are often from captive power: what counts is the direct emissions at the installation, including process emissions such as anode consumption and PFCs, plus the embedded emissions of relevant precursors such as unwrought aluminium bought in for further processing. Emissions from generating the electricity consumed — including at a captive plant — are generally treated as indirect and so fall outside the steel and aluminium obligation, which makes direct process and fuel data the priority.
What Indian exporters must provide to EU importers
Commission guidance for non-EU operators sets out three outputs from the installation: an annual emissions report, a summary that can be shared with all declarants, and a confidential addendum for declarant-specific data. An EU customer will usually ask for some or all of the following:
- Installation identity: name, address, coordinates and the production routes used (for example blast furnace–basic oxygen furnace, DRI–electric arc furnace, scrap-based EAF, primary or secondary aluminium).
- Specific embedded emissions per tonne for each good, by CN code, for the calendar year of production.
- Precursor data: which precursors were used, from which installations and countries, and whether their values are actual (verified) or default.
- Verification report from an accredited verifier covering the actual values.
- Carbon price paid in the country of production, if any, with evidence.
- Free-allocation-relevant data the importer needs to apply the adjustment for EU ETS benchmarks.
The definitive period uses the calendar year as the reporting period, replacing the flexibility of the transitional phase. Indian companies that run an April–March financial year will need their monitoring to produce calendar-year figures.
Verification: the step most exporters underestimate
Default values need no verification. Actual values do. An accredited verifier checks the monitoring plan, the activity data, emission factors, the attribution of emissions to production processes and the precursor values. The verification rules also require a physical site visit to each installation in its first verification year.
The first verifiers were only being accredited in the third quarter of 2026, and their registration in the CBAM Registry opened on 1 September 2026, so capacity is tight. An installation that wants its 2026 data verified in time for importers' September 2027 declarations should engage a verifier early and fix data gaps before the visit.
Rules, guidance and the list of accredited verifiers are still evolving. Check the latest European Commission guidance before committing to a verification plan.
Cost implications: how to think about exposure
Exporters do not pay CBAM directly, but its cost lands in the commercial relationship. A simplified view of the importer's cost for one shipment:
- Tonnes imported × specific embedded emissions = total embedded emissions.
- Less an adjustment reflecting free allocation still given to EU producers under the EU ETS.
- Less any carbon price effectively paid in the country of production.
- Multiplied by the CBAM certificate price for the relevant period.
For 2026 imports, the certificate price is a quarterly average of EU ETS auction prices published by the Commission; from 2027 it becomes weekly. Certificates for 2026 imports go on sale from 1 February 2027.
| Illustrative case | Embedded emissions per tonne | Relative CBAM cost per tonne |
|---|---|---|
| Default value with 2026 mark-up | Highest | Baseline |
| Actual value, average installation | Lower | Lower than baseline |
| Actual value, efficient route (e.g. scrap EAF with low direct emissions) | Lowest | Substantially lower |
The table is illustrative only. The actual gap depends on your route, product, country default and precursor sources. Our guide to CBAM default values vs actual data explains how the mark-up widens it over 2026–2028.
Carbon price paid in India
CBAM allows a deduction for a carbon price effectively paid in the country of production, with evidence. India's Carbon Credit Trading Scheme sets emission-intensity targets for sectors including aluminium, and draft targets for iron and steel were published in June 2026. Whether, and how, obligations under it could reduce a CBAM liability depends on EU rules on carbon price paid, which are still being settled. Do not price this into contracts yet. See our CCTS guide.
Action plan for Indian steel and aluminium exporters
- List EU-bound products by CN code and the installation and route behind each.
- Write a monitoring plan in English for each installation, using the Commission template, covering fuels, process inputs, carbon content and precursors.
- Set up calendar-year data collection with evidence: fuel invoices, meter readings, lab analyses, production records.
- Trace precursors to their installations and request verified values from suppliers, or plan to use defaults for them.
- Calculate specific embedded emissions per good — see how to calculate CBAM embedded emissions.
- Appoint an accredited verifier and schedule the site visit.
- Agree data-sharing terms with EU customers: format, timing, confidentiality and who pays for verification.
- Model your exposure against defaults for 2026, 2027 and 2028, and use it in price negotiations.
How EKOTRACE helps
EKOTRACE lets Indian producers model installations, production processes and precursors, calculate specific embedded emissions per good on a calendar-year basis, and compare actual against default values. Every figure carries its evidence and maker-checker approval, which gives a verifier one trail to follow. The same approved fuel and electricity data feeds your corporate GHG inventory and BRSR reporting, so the numbers reconcile.
See our CBAM compliance page, how the supplier portal handles data requests from customers, or talk to our CBAM advisory team.
Frequently asked questions
Do Indian exporters have to register for CBAM?
No. The EU importer must be an authorised CBAM declarant and files the declaration. Indian installation operators supply emissions data and verification reports to their customers, and may register their installations with the Commission so that data can be shared through the CBAM Registry.
Does CBAM apply to Indian aluminium in 2026?
Yes. Aluminium goods imported into the EU from 1 January 2026 are in the definitive period, unless the importer stays under the 50-tonne annual threshold. For aluminium, only direct emissions and precursor emissions count towards the certificate obligation.
What happens if an Indian supplier cannot provide actual emissions data?
The importer uses the Commission's default value for the product and country of origin, including a mark-up of 10% in 2026, 20% in 2027 and 30% from 2028. This is usually more expensive than verified actual data for an efficient producer.
Did the India–EU trade agreement remove CBAM for Indian exporters?
No. The agreement concluded in January 2026 does not exempt Indian goods from CBAM. Exporters should plan to supply data and verification as the rules currently require.