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, preparation for verification by an accredited verifier, reporting through the CBAM registry and planning of certificate obligations. It runs under the definitive regime that has applied since 1 January 2026. GreenSutra prepares the installation data and the records that an accredited verifier checks. It does not verify.

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.

To declare actual emissions instead of default values, 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 installation data, verified 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. The second-quarter price is 75.28 EUR, published on 6 July 2026, and the third-quarter price is 82.32 EUR, published on 5 October 2026.

A carbon price effectively paid in India can be deducted, net of any rebate, under Article 9 of Regulation (EU) 2023/956. The European Union does not have to recognise India's Carbon Credit Trading Scheme first. To deduct the price actually paid, the emissions must be actual, and a person independent of the declarant and of the Indian authorities must certify the records. With default values, the deduction needs a yearly default carbon price for India, and none had been published by 15 October 2026. The Commission's rules on converting the price into fewer certificates were still a draft on that date. India and the European Union concluded negotiations on a trade agreement in January 2026, and it is not yet in force. Its annex on carbon border measures gives no exemption from CBAM. It sets up a technical dialogue that covers the possibility of taking into account a carbon price effectively paid in India.

Importers above the threshold must hold authorised CBAM declarant status. Applications for the status can be made at any time. 31 March 2026 was the cut-off for the rule that let an applicant keep importing while its application was pending. 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. Those for cement, iron and steel, aluminium and hydrogen carry a regulatory markup of 10 percent in 2026, 20 percent in 2027 and 30 percent from 2028. Fertiliser defaults carry a flat 1 percent, and electricity defaults none.

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.

The declarant surrenders certificates for the embedded emissions minus the free allocation adjustment, and minus any carbon price deduction, never below zero. The adjustment mirrors the free allocation EU producers of the same good still receive. On default values it is the good's CBAM benchmark, times the CBAM factor for the year, times the cross-sectoral correction factor, times the mass imported. The deduction shrinks each year. The CBAM factor is 97.5 percent in 2026, 95 percent in 2027, 90 percent in 2028 and 77.5 percent in 2029. It falls to 51.5 percent in 2030, 39 percent in 2031, 26.5 percent in 2032 and 14 percent in 2033. From 2034 nothing is deducted for free allocation. How fast the bill grows depends on how far a good's emissions sit above its benchmark. On default values, Indian hot-rolled flat steel (CN 7208) needs 3.372 certificates a tonne in 2026 and about 4.86 in 2030, if the benchmark stays at its 2026 value. That is about 1.4 times, before any change in price. A plant whose emissions equal the benchmark starts far lower and rises much faster.

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. Since 1 January 2026 the importer may instead declare default values published by the European Commission, which carry a mark-up. A complex good can combine actual emissions for the installation's own processes with default values for one or more precursors, under Article 15 of Implementing Regulation (EU) 2025/2547. 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. Actual emissions declared under EU CBAM, however, must be verified by a verifier accredited under the EU CBAM accreditation rules set out in Commission Delegated Regulation (EU) 2025/2551. An India accredited body supports and prepares the data, and 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.