Indian steel exporters are adjusting production routes, emissions reporting systems and certification processes as the EU’s Carbon Border Adjustment Mechanism (CBAM) enters its financially liable phase.
While several large producers have begun early compliance steps, uncertainty around emissions verification is emerging as a key risk, Kallanish understands.
CBAM requires exporters supplying steel to the EU to submit verified data on embedded carbon. Where emissions are not verified by EU-accredited agencies, country-level default values are applied. This can sharply increase the carbon levy and undermine export competitiveness.
Leading Indian steelmakers are aligning EU-bound shipments with lower-emission production routes. Electric arc furnace steel, which relies on scrap and emits less carbon, is being increasingly prioritised for Europe, while blast furnace routes continue to serve other markets.
Producers such as Tata Steel, AMNS India and others are also investing in renewable energy and emissions-reduction technologies to lower overall carbon intensity (see table). These include captive solar and wind power, coal gasification and redesigned plant layouts. Such investments are aimed at improving emissions performance rather than achieving immediate CBAM compliance.
However, most compliance activity remains preparatory as sources say current efforts are limited to the “pre-verification” stage. Only a handful of mills have begun preliminary work, while formal audits and final verification will start only after the EU publishes its list of approved certification agencies. The expected timeline for this is August-September, industry sources tell Kallanish.
CBAM entered its payment phase from January, turning emissions reporting from a regulatory exercise into a direct cost consideration for exporters and their customers.
Legal advisers warn that limited availability of EU-accredited emissions verifiers in India could create a bottleneck. Once self-reported data is no longer accepted, exporters unable to secure verification risk having shipments assessed using default emissions values. Although the levy is legally paid by EU importers, the cost is expected to be passed back to exporters through pricing.
Smaller producers are particularly exposed. Limited access to verification slots, weaker balance sheets and less favourable contracts increase the risk of margin erosion or loss of EU market access.
Low-carbon investment snapshot
| Producer | Technology focus | Approx capacity / detail | Timeline |
| Tata Steel | Captive wind-solar, onsite solar | 966 MW round-the-clock hybrid renewable project under long-term PPA, plus ~41 MW onsite solar |
Commissioning targeted for 2025; onsite solar operational |
| JSW Steel | Renewable power procurement | Around 2,500 MW of wind and solar capacity tied up through group PPAs |
Additional capacity targeted by 2025 |
| Jindal Steel | Coal gasification | Coal gasification unit at Angul steel plant | Operational |
| AM/NS India | Solar and wind | Around 550 MW of planned renewable capacity to support Hazira operations |
Phased completion by 2027-28 |
| SAIL | Rooftop and floating solar | Floating and rooftop solar projects identified across plants, including at Bhilai; total potential estimated at ~15-196 MW |
Phased rollout to 2028-29 |
Source: company reports, Kallanish
CBAM is often viewed as a test of carbon efficiency, but in the near term it is shaping export competitiveness through process readiness. Indian steelmakers are investing in lower-emission production, yet access to verification is emerging as the decisive factor.
In practice, CBAM may initially consolidate Indian exports to the EU among larger, better-prepared producers rather than drive immediate emissions reductions across the sector. However, compliance timelines and administrative capacity may matter as much as technology choices for Indian exporters.
