CBAM for EU importers and Indian exporters: what applies now

What CBAM is and where it stands

The Carbon Border Adjustment Mechanism puts a carbon price, linked to EU Emissions Trading System (EU ETS) auction prices, on certain goods imported into the EU. Importers pay it by buying and surrendering CBAM certificates for the emissions embedded in their goods.

The definitive regime under Regulation (EU) 2023/956 has applied since 1 January 2026. It brings three obligations: authorisation, annual reporting, and the purchase and surrender of certificates. The CBAM Omnibus simplification, Regulation (EU) 2025/2083, published on 17 October 2025, changed several of the rules below, including the new 50-tonne threshold.

Which goods are covered

CBAM covers imports of six sectors, listed by CN code in Annex I of the regulation:

Coverage is decided by CN code, so classification matters. If you are unsure whether a product falls in a covered code, start with HS codes explained and the HS code finder.

Proposed extension. In December 2025 the Commission proposed extending CBAM to 180 downstream products with high steel and/or aluminium content, with anti-circumvention measures (COM(2025) 989). The European Parliament’s ENVI committee adopted its report on 9 July 2026, with the plenary vote scheduled for September 2026 ahead of negotiations with the Council. It is not yet law, but manufacturers of steel- and aluminium-heavy products should follow it.

The 50-tonne exemption

An importer is exempt from CBAM obligations if the total net mass of CBAM goods it imports in a calendar year, across all CN codes, does not exceed 50 tonnes.

Three details matter:

• It is annual and cumulative across all CBAM goods you import, not per shipment or per product.
• Once you exceed it, everything counts. All CBAM goods imported that year are covered, not just the tonnes above 50.
• Electricity and hydrogen are excluded from the exemption.

The Commission reviews the threshold each year by 30 April. If your volumes are near 50 tonnes, track them monthly.

Authorisation, declarations and certificates

Above the threshold, goods may only be imported by an authorised CBAM declarant. Importers who applied for authorisation by 31 March 2026 may keep importing provisionally until the competent authority decides.

The key dates for 2026 imports:

From 2027, at the end of each quarter, a declarant must hold certificates covering at least 50% of the embedded emissions in goods imported since the start of the year. After the first cycle, the declaration is due by 30 September each year for the previous calendar year.

How the certificate price and the phase-in work

For emissions declared for 2026, the certificate price is the quarterly average of EU ETS auction clearing prices, weighted by volume, for the quarter in which the goods were imported. From 2027 the price will be a weekly average. Implementing Regulation (EU) 2025/2548 sets how the price is calculated and published.

CBAM phases in as free allocation under the EU ETS phases out. The CBAM factor, which reflects the free allocation still given to EU producers, falls each year:

In 2026, only 2.5% of free allocation is phased out. The number of certificates to surrender is adjusted for free allocation using the method in Implementing Regulation (EU) 2025/2620. Default emission values, by CN code and country of origin, are set in Implementing Regulation (EU) 2025/2621.

The CBAM cost estimator applies the factor, the benchmark and the current price to your tonnes.

Worked example: an importer of Indian steel

What EU importers should do now

1. List your CBAM goods by CN code and total the tonnes per calendar year.
2. Check the threshold and, if above it, confirm your authorisation status.
3. Request emissions data from suppliers for each product and plant, in the format your declaration needs.
4. Budget for certificates, using the published quarterly prices for 2026 imports, and put CBAM cost into your landed cost.
5. Watch the downstream extension if you import steel- or aluminium-intensive finished goods.

What Indian exporters should prepare

For Indian exporters of steel and aluminium products, CBAM cost is now part of how an EU buyer compares suppliers, so be ready with clear, consistent answers.

• Know which products are CBAM goods. Share correct CN codes with your customers.
• Prepare emissions data per product and plant. Your customers need it for their declarations. Ask them what they need and in what format, early.
• Understand the default values. Default values exist for each CN code and country of origin. Discuss with your customer how your data compares.
• Follow the downstream proposal. Engineering exporters of steel- and aluminium-heavy products may be brought into scope if the extension becomes law.

CBAM sits alongside other EU rules that reach Indian exporters, such as the EU Deforestation Regulation and the Packaging and Packaging Waste Regulation. The EUDR checker and PPWR checker help you see which apply.