CBAM Explained: What Indian Exporters Need to Do Before 2026

The EU’s Carbon Border Adjustment Mechanism (CBAM) is one of the most consequential trade-and- climate policies of the decade — and for many Indian exporters, it is already a live obligation. This guide cuts through the jargon.

What is CBAM?

CBAM is the European Union’s mechanism to put a carbon price on imports of certain carbon-intensive goods, so that products made outside the EU face a comparable carbon cost to those made inside it. In effect, it extends EU carbon pricing to the embedded emissions of imported goods.

Which products does CBAM cover?

CBAM currently applies to six product groups:

• Iron and steel
• Aluminium
• Cement
• Fertilisers
• Hydrogen
• Electricity

The scope is expected to broaden over time, so exporters in adjacent sectors should watch developments closely.

What exporters must actually do

There are two phases that matter:

1. Transitional phase (to end-2025): reporting only. EU importers must report the embedded emissions of covered goods. Exporters are expected to supply accurate emissions data.
2. Definitive regime (from 2026): financial obligation. EU importers must buy and surrender CBAM certificates corresponding to the embedded emissions of what they import.

The practical implication is the same for both phases: your embedded-emissions data becomes commercially important. Accurate, low, well-documented emissions can protect your competitiveness; poor data can cost you orders.

How to prepare

• Confirm scope. Identify which of your products and installations fall under CBAM.
• Calculate embedded emissions. Quantify direct and indirect emissions per the EU methodology — not estimates, but defensible, installation-level data.
• Build the reporting trail. Set up the systems to produce audit-ready figures each quarter.
• Decarbonise strategically. Every tonne of embedded CO₂ you remove reduces your customers’ future certificate cost — and your exposure.

CBAM is also a GHG-accounting problem

You cannot report embedded emissions you have not measured. Strong GHG accounting at the product and installation level is the foundation for CBAM compliance. The two go hand in hand.

Carbon Credit Consulting helps exporters assess scope, calculate embedded emissions and build a decarbonisation roadmap. See our CBAM advisory service or get in touch.