CBAM for Indian steel and aluminium exporters
What the EU's carbon border charge means for you since January 2026: who pays, what counts, and why your buyer is asking for emissions data.
Checked against the EU rules on 6 October 2026.
Since 1 January 2026 an EU company that imports iron, steel, aluminium, cement, fertilisers, hydrogen or electricity has to pay for the carbon emitted when those goods were made. This is the Carbon Border Adjustment Mechanism, CBAM. It puts imports on the same footing as EU producers, who already pay for their emissions under the EU Emissions Trading System.
Who pays
The legal duty sits with the EU importer, through an authorised CBAM declarant. You, the exporter, have no obligation under EU law. In practice the cost comes back to you: your buyer compares suppliers on price plus CBAM, and asks for a discount or for emissions data that lowers the bill. Importers bringing in less than 50 tonnes of CBAM goods a year are exempt, so the pressure comes mainly from larger buyers.
What counts for steel and aluminium
For iron, steel and aluminium goods only direct emissions count: fuel burned in your furnaces and processes, plus the embedded emissions of the steel or aluminium you buy in and process further (the precursors). Electricity is not counted for these goods. For a fastener, forging or wire maker, the precursor, such as wire rod or billet, is usually most of the total.
What happens if you send nothing
Without verified data the importer must use the EU default value for your product and country, plus a mark-up of 10% in 2026, 20% in 2027 and 30% from 2028. The defaults are set high on purpose. For Indian wire rod (CN 7213 10 00) the default is 4.27 t CO2e per tonne, or 4.697 with the 2026 mark-up.
After the free allocation deduction, that is 3.367 certificates a tonne. At €75 per tonne of CO2, close to the 2026 quarterly prices, your buyer pays about €253 a tonne in 2026, and more each year after. See this example in the calculator.
What you can do
- Know the number. Use the cost calculator for one product or the multi-product calculator for your range, so you go into price talks with facts.
- Calculate your actual emissions with the EU method: fuels, process emissions and precursors, per tonne of each product.
- Get them verified by a verifier accredited in the EU. Only verified actual figures can replace the default.
- Ask your suppliers of wire rod, billet or aluminium for their verified figures. Without them the precursor default applies, which often outweighs everything you do in your own plant.
Read next: default values or actual emissions and what your EU buyer will ask for.
General information for planning, not legal, tax or customs advice. See the disclaimer.