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.
Which goods and emissions are covered?
CBAM covers goods listed by customs (CN) code in Annex I of the regulation, in six sectors:
- Iron and steel (including many semi-finished and some finished products such as screws, bolts and similar articles)
- Aluminium
- Cement
- Fertilisers
- Electricity
- Hydrogen
If your product's CN code is not in Annex I, CBAM does not apply to it today. Check the exact 8-digit code with your EU buyer or customs broker.
Direct and indirect emissions
- Direct emissions come from the production process itself, including heating and cooling used in production.
- Indirect emissions come from producing the electricity used in production.
According to the Commission's Q&A, CBAM counts only direct emissions for iron and steel, aluminium and hydrogen, while cement and fertilisers (and agglomerated iron ore) must declare both direct and indirect emissions. Emissions embedded in relevant precursors, such as clinker for cement or pig iron for steel, are also counted.
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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