EU CBAM explained for Indian exporters: what it is and how to prepare
A plain guide to the EU Carbon Border Adjustment Mechanism as of October 2026: covered goods, the 2026 definitive period, the 50-tonne threshold, default and actual values, CBAM certificates, proposed changes, and a checklist for Indian MSME exporters.
How do CBAM certificates work?
- Each CBAM certificate covers one tonne of CO2e of embedded emissions.
- Only authorised CBAM declarants (the EU importer, or its indirect customs representative) buy and surrender them, through the CBAM registry. The Indian exporter does not buy certificates.
- The price follows EU ETS auction prices: a quarterly average in 2026 and a weekly average from 2027. The Commission publishes the prices on its CBAM website; for example, the first price, for Q1 2026, was published on 7 April 2026.
- The number to surrender is reduced by a free allocation adjustment (matching the free allowances EU producers still get) and by any carbon price effectively paid in the country of production. The Commission plans an implementing act in 2026 on how to prove a carbon price paid abroad, and may publish default carbon prices for some countries.
This article does not estimate CBAM costs. The cost depends on the importer's data, the adjustments and the certificate price at the time.
Sources: European Commission, Carbon Border Adjustment Mechanism (CBAM) Questions and Answers, last updated 15 October 2026; European Commission, Carbon Border Adjustment Mechanism (main page); European Commission, CBAM definitive regime; European Commission, CBAM legislation and guidance; European Commission news: Officially published: Simplifications for CBAM (20 October 2025); European Commission news: CBAM successfully entered into force on 1 January 2026 (14 January 2026); European Commission, CBAM communication and news; European Commission, Price of CBAM certificates; European Parliament press release: CBAM: Parliament adopts simplifications (10 September 2025); Regulation (EU) 2023/956 establishing a carbon border adjustment mechanism (EUR-Lex); Regulation (EU) 2025/2083 amending Regulation (EU) 2023/956 (EUR-Lex); European Parliamentary Research Service: Extension of CBAM scope to downstream goods and anti-circumvention measures (7 September 2026); Ministry of Commerce and Industry, India's Free Trade Agreements (2025-26): Key Highlights
This article was prepared with AI assistance and checked by the GreenEye team against the sources shown in each section.
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