What is CBAM and how does it affect my exports to the EU?

Key takeaways

• CBAM applies to steel, cement, fertilizer, plastics, and aluminum imported into the EU from January 1, 2026.
• Importers must declare carbon emissions; exports without verified emissions data cannot clear.
• Verification reports from EU-accredited verifiers are mandatory from January 2027 onwards.
• Indian exporters of CBAM goods must prepare emissions data in advance or work with EU verifiers starting September 1, 2026.
• CBAM price adjustment directly competes with competitive pricing; larger exporters are more exposed.

Which goods and which exporters does CBAM cover?

CBAM covers six product categories: cement, iron and steel, aluminium, fertilisers, electricity, and organic chemicals. The mechanism applies to:

• Any importer of CBAM goods into the EU (UK not included; Norway and Switzerland exempt)
• Large exporters first (Phase 1: Oct 2023. Dec 2025 was reporting-only; Phase 2: Jan 2026+ enforces duty)
• Indirect emissions count: embedded carbon in imported inputs (e.g., electricity used to make steel) also applies

If you export steel, aluminium, fertiliser, or cement to the EU, your customer (the importer) faces CBAM liability on your shipment. This means:

• You may need to declare the carbon intensity of your goods on the commercial invoice or packing list
• Your competitiveness against EU-produced goods shrinks if you do not have verified emissions data
• Your customer's landed cost increases by the CBAM price adjustment (currently ≈€0. 50/tonne depending on EU carbon price)

What emissions data do I need and who verifies it?

The EU requires two forms of emissions declaration:

1. Self-declared emissions (now to Dec 2025): Importers declare the carbon intensity of goods based on supplier data (you). No third-party verification required yet.
2. Verified emissions (Jan 2027 onwards): Importers must use verification reports from EU-accredited verifiers. These verifiers assess your facility's emissions and issue a report recognized by the EU CBAM Registry.

What this means for you: As an Indian exporter, you must collect or calculate:

• Direct emissions (Scope 1): Your production facility's fuel use and on-site process emissions
• Indirect emissions (Scope 2): Electricity purchased from the grid used in your production
• Optional (Scope 3): Upstream supplier emissions if you use imported inputs (rare for CBAM, but emerging)

From January 2027, an EU-accredited verifier will audit your emissions data and issue a certification report. The EU has published accreditation requirements; Indian certification bodies and international auditors (Dekra, SGS, etc.) will likely offer CBAM verification services.

What are the key dates and registrations I need to track?

How does CBAM affect my pricing and competitiveness?

CBAM is a carbon price. The EU auctions ETS (Emissions Trading Scheme) allowances; CBAM importers pay the equivalent price on imported goods. Currently (2026), the ETS carbon price is ≈€55. 85/tonne of CO₂. For steel:

• Average embodied carbon: 2. 3 tonnes CO₂/tonne of steel
• CBAM cost per tonne of steel: €110. 255
• This increases your customer's landed cost by 8. 15% depending on the steel grade

What this means: If you export mid-range carbon-intensive goods (e.g., primary steel, portland cement), your margin compresses. EU producers face the same carbon cost but recover it through the ETS rebate mechanism; you do not. Over time, CBAM may shift demand toward lower-carbon suppliers or trigger technology investments in your facility.

Do I need to register anywhere or notify anyone?

Directly: No. Indian exporters do not register in the EU CBAM Registry; the importer does. However, you must:

• Provide emissions data on invoices/packing lists (your buyer will request this starting Sept 2026)
• Cooperate with EU verifiers who may audit your facility or demand production records to certify emissions
• Notify your AD bank (if applicable) of CBAM declarations on the commercial invoice

Indirectly: Your EU customer (the importer) must register in the CBAM Registry by September 1, 2026, and file quarterly declarations starting January 2027. If you are also an importer (e.g., buying EU goods to re-export), you face registration separately.

What if I cannot get my emissions verified before Jan 2027?

Goods without verified emissions data cannot clear the border as of January 1, 2027. Your buyer's options:

• Halt shipments until verification is complete (delay risk for time-sensitive orders)
• Use default values (not yet finalized, but the EU is considering a conservative worst-case carbon footprint for unverified goods. Likely 30. 50% higher than actual)
• Switch suppliers to competitors with verified data (loss of order)

Recommendation: Start emissions audits now. Engage an international certification body (SGS, Dekra, TÜV, etc.) to conduct a baseline emissions assessment in Q3 2026. This positions you for verification before January 2027.

Which products are in and which are out?

CBAM Phase 1 covers six categories; Phase 2 (likely 2027. 2029) will expand. Current scope:

• Cement (HS 2523): All portland cement and clinker
• Steel (HS 72): Iron and steel products (not stainless; not secondary/scrap)
• Aluminium (HS 76): Primary aluminium and ingots
• Fertilisers (HS 3104. 3105): Nitrogenous, phosphatic, potassic fertilisers
• Electricity (HS 2716): Imported electricity (rare for India)
• Organic Chemicals (HS 29): Subset of bulk chemicals (ammonia, methanol, etc.)

Products NOT covered: finished goods containing CBAM materials (e.g., a car with steel, a machine with aluminium) are NOT subject to CBAM; only the primary material is. Processed steel (e.g., stainless, galvanised) falls outside HS 72 and is not covered. Recycled steel and scrap are exempt.

How do I prepare now?

Immediate steps (now to Sept 2026):

1. Audit your emissions baseline: Engage an ISO 14064-certified consultant or auditor to quantify Scope 1 (fuel) and Scope 2 (electricity) emissions from your facility.
2. Collect energy data: Request consumption records (electricity bills, fuel invoices, production logs) for 2024 and 2025.
3. Notify your buyers: Tell EU customers that CBAM verification will be available from Sept 2026; offer early emissions declarations on invoices.
4. Check your buyers' readiness: Ask if they have registered in the CBAM Registry; if not, they will face deadlines in Sept 2026.
5. Budget for verification: EU verifier audit ≈€3,000. 10,000 depending on facility size and complexity.

Medium-term (Sept 2026. Dec 2026): Arrange and complete verification audit. The verifier will issue a report valid for 2 years, usable for all CBAM declarations in that period.

Long-term (2027+): Embed emissions reporting into your compliance system. Update declarations annually; track carbon intensity improvements.

A Jaipur secondary steel mill (SAIL/Tata/JSW-scale) producing rebar exports 100 tonnes monthly to a German steel distributor. The facility uses electric arc furnaces (EAF) with 500 kW grid power per tonne of output. </> } result={ <>

Baseline emissions (estimated):

• Direct (fuel): 0.5 tonnes CO₂/tonne
• Indirect (electricity at 0.8 kg CO₂/kWh India grid): 0.4 tonnes CO₂/tonne
• Total: 0.9 tonnes CO₂/tonne

CBAM cost to buyer (at €70/tonne CO₂):

• €63 per tonne of steel (0.9 × €70)
• €6,300/month on 100-tonne shipment
• If your margin is €200/tonne, CBAM reduces buyer's net by 31%. Unless verified emissions arrive by Jan 2027, in which case you use actual 0.9 and stay competitive.

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Action: Audit your actual emissions now (range 0.6. 1.2 depending on efficiency, fuel mix, and electricity source). Engage an ISO 14064 consultant in Q3 2026 to prepare for EU verification. When your German buyer files the CBAM declaration in Jan. Mar 2027, they declare your verified 0.9. Without verification, they use a conservative default (likely 1.5. 2.0 tonnes CO₂/tonne = €105. 140/tonne = higher landed cost = buyer switches suppliers).

Which other EU rules hit the same shipment?

CBAM is one of several EU regimes that attach to an Indian consignment independently of tariff. A shipment can clear CBAM and still be stopped by any of these:

• REACH for Indian exporters. Chemical registration duties when the manufacturer sits outside the EU.
• CE marking from India. Conformity routes and the technical file behind the mark.
• EUDR deforestation rules. Plot geolocation data the EU buyer needs for leather and derived goods.
• GPSR and the EU Responsible Person. The named EU-based person every consumer product now needs.
• IOSS and EU VAT. The VAT leg that runs alongside the carbon leg on the same parcel.

References and resources

• EU CBAM Regulation (EU) 2023/956: Full text (eur-lex.europa.eu)
• EU CBAM Guidance on Verifiers (Aug 2024): European Commission announcement
• EU CBAM Registry: Opens Sept 1, 2026 at cbam.ec.europa.eu
• ISO 14064 Emissions Assessment: Engage a consultant certified under this standard to measure your facility's baseline.
• International Verifiers: SGS, Dekra, TÜV, Bureau Veritas, Kiwa offer CBAM verification services.

Last updated: 2026-08-25. CBAM regulations are evolving; consult the EU EU Taxation & Customs page for updates.

Update history

• 2026-08-25 First published.