CBAM and Indian Exporters: What Steel, Cement and Aluminium Companies Must Do Before 2026

From January 2026, Indian companies exporting steel, cement, aluminium, fertilisers, and electricity to the European Union face a new carbon cost at the border: the Carbon Border Adjustment Mechanism (CBAM). If you export to Europe and have not yet calculated your embedded emissions, you are already behind. This guide explains exactly what CBAM means for Indian exporters and what you need to do now.

What is CBAM?

CBAM is the EU’s carbon border tax. It puts a carbon price on imports of goods from countries without a carbon pricing mechanism equivalent to the EU ETS (Emissions Trading System). The goal is to prevent carbon leakage — where EU manufacturers lose business to foreign competitors who face no carbon cost.

CBAM is now in its transitional phase (October 2023 to December 2025), where importers must report embedded emissions but do not yet pay. From January 2026, financial obligations begin — importers must purchase CBAM certificates corresponding to the carbon price that would have been paid under EU ETS.

Which Indian Sectors Are Affected?

CBAM Phase 1 covers six sectors under specific CN codes:

What Does CBAM Compliance Actually Require?

Under CBAM, your EU importer (the declarant) is responsible for filing the CBAM declaration, but the data must come from you — the Indian exporter. Specifically, you must provide:

• Direct embedded emissions (Scope 1) from your production process per tonne of product
• Indirect embedded emissions (Scope 2) from purchased electricity used in production
• For steel: embedded emissions from precursor inputs (scrap, pig iron, DRI/HBI)
• Country of origin and installation details
• Calculation methodology used (must follow EU CBAM Implementing Regulation methodology)

The EU CBAM Methodology — What’s Different from Standard GHG Accounting?

This is where many Indian companies get confused. CBAM embedded emissions calculations follow the EU CBAM Implementing Regulation (EU 2023/1773), which has specific rules that differ from standard GHG Protocol corporate accounting:

• Emissions are calculated per tonne of product, not at company or facility level
• Specific system boundaries are defined per sector (e.g., for steel, the boundary includes the steel plant but also the upstream iron-making)
• The electricity emission factor to use is specified by the regulation — it may differ from CEA’s grid factor
• Data must be based on actual production data — default values are allowed only temporarily and will attract a higher carbon price
• Monitoring plans and verification requirements are specified

The Financial Impact: How Much Will CBAM Cost Indian Exporters?

The CBAM certificate price tracks the EU ETS carbon price. In 2024-25, EU ETS prices ranged between EUR 50-70 per tonne CO₂e. A simplified calculation:

• Indian steel (BF-BOF route): approximately 2.0-2.3 tCO₂e per tonne of steel
• At EUR 60/tonne: EUR 120-138 per tonne of steel exported
• For a company exporting 50,000 MT of steel to EU annually: potential CBAM cost of EUR 6-7 million per year

For cement exporters, clinker process emissions (approximately 0.5-0.8 tCO₂ per tonne of clinker) add significantly to the embedded carbon calculation.

What Indian Exporters Should Do Right Now

• Step 1: Identify all EU-bound exports and CN codes that fall under CBAM
• Step 2: Calculate your product-level embedded emissions using the EU CBAM methodology — not just corporate GHG Protocol accounting
• Step 3: Set up an installation-level monitoring plan per the regulation requirements
• Step 4: Communicate your verified embedded emissions data to your EU importers so they can file accurate CBAM declarations
• Step 5: Identify decarbonisation levers — lower your embedded emissions to reduce the CBAM liability

How Planetary Plus Supports CBAM Compliance

Planetary Plus provides end-to-end CBAM advisory for Indian exporters. We calculate product-level embedded emissions using the EU CBAM Implementing Regulation methodology, develop installation-level monitoring plans, and prepare the data package your EU importers need for CBAM declarations.

We have worked with steel, cement, and aluminium clients on CBAM readiness and understand both the regulatory requirements and the practical data challenges of Indian manufacturing operations.

If you export to Europe and have not yet assessed your CBAM exposure, contact us today for a CBAM readiness assessment.