The European Union's Carbon Border Adjustment Mechanism (CBAM) is one of the most consequential trade policy shifts in a generation — and it has direct implications for Indian exporters of steel, aluminium, cement, fertiliser, hydrogen, and electricity.
What CBAM does
CBAM requires importers of covered goods into the EU to purchase certificates corresponding to the embedded carbon emissions of those goods. In effect, it puts a carbon price on imports equivalent to what EU producers already pay under the EU Emissions Trading System.
For Indian manufacturers, this means two things:
- You need accurate, auditable data on the embedded emissions of your products.
- Higher-emission production processes will become less price-competitive in the EU market over time.
Why this matters now
The transitional reporting phase is already underway, and full financial obligations are phasing in. Exporters who wait until the deadline to build emissions accounting infrastructure will be at a disadvantage relative to competitors who start now.
How Terrasols and CarbonNex help
Through our sustainability consulting practice — and our CarbonNex platform — we help Indian manufacturers:
- Build product-level carbon footprints aligned with the GHG Protocol
- Prepare CBAM-compliant emissions reports
- Identify decarbonisation levers, including verified carbon removal purchases
Compliance-ready carbon accounting isn't optional anymore. It's a market access requirement.
Manish Kumar
Terrasols Solutions Private Limited