CBAM Compliance Guide

CBAM solutions help exporters of covered goods in India and worldwide, and the EU importers who declare them, comply with the European Union Carbon Border Adjustment Mechanism. The work covers exposure assessment, measurement of embedded emissions, verification, reporting through the CBAM registry and management of certificate obligations under the definitive regime that has applied since 1 January 2026.

CBAM covers six product groups: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. A proposal published in December 2025 would extend the mechanism to a wider set of downstream products from 2028, but that extension has not been adopted.

The Omnibus simplification introduced a de minimis threshold of 50 tonnes per importer each year for cement, iron and steel, aluminium and fertilisers. Electricity and hydrogen are excluded from this exemption. Around 90 percent of importers fall below the threshold, yet close to 99 percent of embedded emissions remain covered, so material exporters are still affected.

The importer or authorised declarant needs the verified embedded emissions of the goods supplied. An Indian installation can register voluntarily in the CBAM registry and share this verified data centrally, so the declarant can file an accurate annual declaration.

Default values carry a regulatory markup, so they tend to overstate emissions. Actual verified installation data, confirmed by an accredited verifier, usually produces a lower and more accurate figure, which reduces the certificate obligation that the European importer faces.

The price tracks EU ETS auction closing prices: certificates covering 2026 imports are priced on the quarterly average of the quarter of importation, and the standing price from 2027 is the weekly average. The first official price, for the first quarter of 2026, is 75.36 EUR per tonne of CO2e, published by the European Commission on 7 April 2026.

A carbon price paid in the country of origin is deductible against the certificate obligation where the European Union recognises it. As of June 2026 India's Carbon Credit Trading Scheme is not yet recognised by the European Union, although the India and European Union trade agreement opens a technical dialogue on carbon price recognition.

Importers above the threshold must hold authorised CBAM declarant status; the application window closed on 31 March 2026. Certificate sales begin on 1 February 2027, and the first annual CBAM declaration, covering 2026 imports, is due by 30 September 2027.

Embedded emissions are the greenhouse gas emissions released in producing a good. Under CBAM they are calculated from actual verified installation data where available, or from default values that carry a regulatory markup of 10 percent in 2026, 20 percent in 2027 and 30 percent from 2028.

The iron and steel group covers most of combined nomenclature chapter 72 and listed headings of chapter 73, from pig iron and semi finished steel through flat rolled products, bars, rods, tubes and pipes, to finished articles such as screws, bolts and nuts and steel structures. Coverage follows the CN code of each good, so Annex I of Regulation (EU) 2023/956 is the reference for any specific product.

The definitive regime covers the six Annex I product groups: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen, including finished articles that Annex I lists, such as iron or steel screws, bolts and structures. A proposal published in December 2025 would extend the mechanism to a wider set of downstream products from 2028, but that extension is a proposal only and has not been adopted.

Only a share of embedded emissions needs certificates while EU ETS free allocation phases out. The payable share is 2.5 percent for 2026 imports, then 5, 10, 22.5, 48.5, 61, 73.5 and 86 percent through 2033, reaching 100 percent in 2034. A shipment that costs little in 2026 carries nearly twenty times that certificate cost by 2030 on the same emissions, so verified low emission data compounds in value across the phase-in.

Each certificate missing at the 30 September surrender costs the EU ETS excess emissions penalty of 100 EUR per tonne of CO2e, indexed to European consumer prices since 2013, so the effective rate sits above that figure today. Importing covered goods above the 50 tonne threshold without authorised declarant status carries three to five times that rate under Article 26.

Yes. Annex I of Regulation (EU) 2023/956 lists the covered goods by combined nomenclature (CN) code, grouped into six product groups. Whether a good is in scope follows from its CN classification rather than from its trade name, so classifying the product correctly is the first step of any CBAM exposure assessment.

Embedded emissions are determined using the methods set out in the EU monitoring rules, principally a calculation based approach and a measurement based, or continuous monitoring, approach, with a mass balance option as a calculation sub method. The sequence runs as follows. First, the system boundary of the installation and the production process is defined. Second, production and activity data are gathered, covering fuels, raw materials, electricity and the relevant process emissions. Third, the calculation based or measurement based approach is applied to those data. Fourth, the result is converted into tonnes of carbon dioxide equivalent, the unit CBAM uses for embedded emissions. Fifth, the figure is reported, verified and shared so the EU importer or authorised declarant can rely on it. Default values published by the European Commission could be used where actual data was unavailable only until 31 July 2024; from 1 August 2024 reporting based on actual emissions was required, with a limited tolerance allowing up to 20 percent of a complex good's embedded emissions to rely on default or estimated values. The direct and indirect emission categories behind this work map onto the wider greenhouse gas scopes covered on the carbon footprint solutions page.

An accredited verifier in India supports the data work but does not, by itself, replace EU CBAM verification. NABCB, the National Accreditation Board for Certification Bodies under the Quality Council of India, accredits validation and verification bodies in India to ISO 14065 and ISO/IEC 17029 for greenhouse gas verification, which supports preparing and assuring the emissions data behind a covered good. The final EU CBAM declaration, however, must be verified by a verifier accredited under the EU CBAM accreditation rules set out in Commission Delegated Regulation (EU) 2025/2551, so an India accredited body supports and prepares the data while EU CBAM verification remains a separate step.

No. The India and European Union free trade agreement does not provide any exemption from the Carbon Border Adjustment Mechanism. CBAM remains fully applicable to imports from India, and the agreement instead establishes a technical dialogue on CBAM implementation. Indian exporters of CBAM covered goods to the European market stay subject to the mechanism, which is why a CBAM consultant in India works from the regulation as it stands rather than on any expected carve out.