Posted on 19 Aug 2026
The introduction of the EU’s Carbon Border Adjustment Mechanism (CBAM) could cost Indian steel exporters significantly less than previously anticipated. Under a realistic scenario, India’s CBAM payments in 2034 will amount to €407 million. This is according to the findings of a study by the climate think tank Sandbag. This is reported by Euobserver.
The CBAM mechanism requires importers to pay a levy on carbon emissions generated during the production of goods such as steel and cement. India, which has a powerful steel industry, has repeatedly challenged this measure at the WTO, and in 2021, together with Brazil, China and South Africa, described the CBAM as ‘discriminatory’.
Under Sandbag’s baseline modelling scenario, India’s steel sector as a whole could face €762 million in CBAM levies by 2034. However, this approach is based on the simplified assumption that all enterprises across India’s diverse steel industry have the same high level of carbon intensity.
Under a more realistic and likely scenario, Indian exporters are likely to redirect their existing low-carbon production towards the European market. This would significantly optimise supplies and reduce gross CBAM payments to €407 million in 2034.
As reported by GMK Center, India is cooperating with the EU on the implementation of the CBAM. Thirteen working groups have been set up to draw up a roadmap for environmentally friendly steel production, which is a step towards reducing carbon emissions in the industry. Indian steelmakers have appealed to the government for incentives to support production and the green transition.
Source:GMK Center
