CBAM

Regulatory

Carbon Border Adjustment Mechanism — EU carbon price on imports of steel, aluminium, cement, fertilisers, electricity, hydrogen.

A second entry for this term. The fuller version, with everything from both, is at CBAM.

Common questions

How does CBAM affect Indian steel and aluminium exporters?

CBAM (Carbon Border Adjustment Mechanism) impact on Indian steel/aluminium: (1) CBAM entered its definitive regime on 1 January 2026 and is now fully in effect, (2) EU importers of Indian steel, aluminium, cement, fertilisers, electricity, hydrogen must purchase CBAM certificates equal to embedded carbon cost, (3) If India steel producer has paid carbon price domestically, EU importer can deduct this from CBAM liability, (4) India currently has no national carbon price (carbon trading being developed), (5) Indian steel/aluminium producers should: calculate their specific CO2 emission intensity, invest in energy efficiency and renewable energy to reduce embedded carbon, engage with the EU CBAM portal reporting requirements.

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

Carbon Border Adjustment Mechanism (CBAM) is an EU carbon price on imports of carbon-intensive goods: steel, aluminium, cement, fertilisers, electricity, and hydrogen. Importers must purchase CBAM certificates equivalent to the embedded carbon cost in the imported goods. CBAM's transitional period ran 2023-2025 (reporting only); its definitive regime took full effect on 1 January 2026 and is now in force. Indian steel and aluminium exporters to EU face a significant cost unless they can demonstrate low-carbon production.

Related terms

• BIS Standards
• CDSCO
• CE Marking
• Certificate of Suitability
• CSRD
• Declaration of Conformity

From the AJG lexicon archive (July 2026). FAQ sources: European Commission — CBAM.