India CBAM Cost Index — Q3 2026
The quarterly reference on what the EU Carbon Border Adjustment Mechanism actually costs Indian exporters of steel, aluminium, cement and fertiliser — comparing the price of shipping on EU default values against verified actual emissions, sector by sector.
Default values vs verified actuals, across all four CBAM sectors
Every table below compares typical Indian emission intensities against EU averages and the EU default value applied when no verified data is filed. The gap between the last two columns is the overpayment — it is route-specific, and it is removable.
Iron & Steel
CN 72 & 73The production route decides the bill. Indian BF-BOF steel typically runs ≈2.1–2.2 tCO₂ per tonne of actual embedded emissions — usually well below what EU defaults assume — so filing verified actuals is a direct cost advantage.
Representative midpoints. The red zone is the markup an EU default applies when no verified actual is filed — that gap is what the buyer overpays.
| Production route | India typical | EU average | EU default value | Savings with actuals |
|---|---|---|---|---|
| BF-BOF (Blast Furnace) | 2.2–2.8 | 1.4–1.8 | 3.5+ | ₹56–80 lakh |
| EAF (Electric Arc Furnace) | 0.8–1.4 | 0.3–0.5 | 2.0+ | ₹48–72 lakh |
| DRI/Sponge Iron + EAF | 1.8–2.4 | 1.0–1.2 | 3.0+ | ₹40–64 lakh |
| IF (Induction Furnace) | 1.2–2.0 | 0.5–0.8 | 2.5+ | ₹36–56 lakh |
Emission values in tCO₂ per tonne of crude steel. Full sector detail: CBAM for Iron & Steel exporters →
Aluminium
CN 76Aluminium is the most electricity-driven CBAM sector: the same smelter output carries a very different footprint on coal power versus captive hydro or renewables — which makes the gap to a single flat default the widest of any sector.
Representative midpoints. Renewable-powered smelting shows the single largest default-vs-actual gap in the index.
| Production route | India typical | EU average | EU default value | Savings with actuals |
|---|---|---|---|---|
| Primary Smelting (Coal Power) | 14.0–18.0 | 6.0–8.0 | 20.0+ | ₹1.2–1.8 Cr |
| Primary Smelting (Captive Hydro/Renewable) | 4.0–7.0 | 2.0–4.0 | 20.0+ | ₹2.5–3.8 Cr |
| Secondary (Scrap-Based) | 0.5–1.5 | 0.3–0.8 | 3.0+ | ₹48–72 lakh |
| Extrusion / Fabrication | 1.0–3.0 | 0.5–1.5 | 5.0+ | ₹60–96 lakh |
Emission values in tCO₂ per tonne of aluminium. Full sector detail: CBAM for Aluminium exporters →
Cement
CN 2523Blended Indian cements (PPC, PSC) substitute clinker with fly ash or slag, so their actual intensity sits well below the flat defaults applied to unverified shipments.
Representative midpoints. Blended cements benefit most from verified actuals because defaults do not credit clinker substitution.
| Cement type | India typical | EU average | EU default value | Savings with actuals |
|---|---|---|---|---|
| Ordinary Portland Cement (OPC) | 0.82–0.95 | 0.60–0.70 | 1.20 | 20–35% |
| Portland Pozzolana Cement (PPC) | 0.55–0.70 | 0.45–0.55 | 0.90 | 25–40% |
| Portland Slag Cement (PSC) | 0.45–0.60 | 0.40–0.50 | 0.85 | 30–40% |
| Clinker (unblended) | 0.85–1.05 | 0.75–0.85 | 1.35 | 20–30% |
Emission values in tCO₂ per tonne of cement / clinker. Full sector detail: CBAM for Cement exporters →
Fertilisers
CN 28 & 31Feedstock is destiny: natural-gas ammonia runs cooler than naphtha-based routes, and nitric-acid plants with N₂O abatement can sit far below the default.
Representative midpoints. Fertiliser is the only CBAM sector where N₂O (not just CO₂) counts, so abatement status moves the number sharply.
| Product | India typical | EU average | EU default value | Savings with actuals |
|---|---|---|---|---|
| Ammonia (natural gas) | 1.8–2.2 | 1.6–1.9 | 2.8 | 25–35% |
| Ammonia (naphtha-based) | 2.5–3.2 | N/A | 3.5 | 10–25% |
| Urea | 1.0–1.5 | 0.8–1.0 | 1.8 | 20–40% |
| Nitric acid | 0.8–2.5 | 0.3–0.5 | 3.0 | Varies widely |
Emission values in tCO₂e per tonne of product. Full sector detail: CBAM for Fertilisers exporters →
The cost of unverified data rises every year to 2034
Two escalators run in parallel: the default-value markup for steel and aluminium steps up from 10% in 2026 to 30% in 2028, and EU free allowances phase out until 2034. Certificate prices track the EU ETS, around €70–80/tCO₂ in 2026.
| Period | Default markup | Applies to | What it means |
|---|---|---|---|
| 2026 | 10% default markup | Steel & aluminium | Definitive regime begins; certificates purchased at EU ETS-linked prices (~€70–80/tCO₂). |
| 2027 | Escalating | Steel & aluminium | Default markup steps up on the path from 10% to 30%; free-allowance phase-out continues. |
| 2028 | 30% default markup | Steel & aluminium | Default-basis costs peak relative to verified actuals — the penalty for unverified data widens. |
| 2029–2033 | Rising CBAM share | All CBAM sectors | EU free allowances continue phasing out, so a growing share of embedded emissions is payable. |
| 2034 | Full exposure | All CBAM sectors | Free-allowance phase-out completes: 100% of embedded emissions carry CBAM certificate cost. |
Where these figures come from
The India CBAM Cost Index is compiled quarterly by CarbonSettle from four source layers: the EU Regulation 2023/956 framework and its implementing acts, the EU’s published default values guidance, market analyst reporting through 2026 on default-basis versus verified-actual carbon costs, and CarbonSettle’s India-specific engagement experience across steel, aluminium, cement and fertiliser production routes.
Emission intensities shown are representative ranges and midpoints for typical Indian production routes — they are not plant-specific measurements. Per-plant numbers vary with fuel mix, grid factor, precursor sourcing and process configuration, and verified actual emissions can only be established through accredited verification of factory-level data. Euro cost figures use the 2026 CBAM certificate price context of €70–80/tCO₂, tracking the EU ETS.
The index is refreshed each quarter. Figures on this page reflect the Q3 2026 edition, last updated July 2026.
Journalists, researchers and analysts: this index is citable.
CarbonSettle India CBAM Cost Index, Q3 2026, https://carbonsettle.com/india-cbam-cost-index
Republication of figures from this index is welcome with attribution to CarbonSettle and a link to this page. For sector-specific context or India production-route detail behind any figure, write to us — we respond to press and research queries.
CBAM costs for Indian exporters, in plain English
How much does CBAM cost per tonne for Indian steel in 2026?
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What are CBAM default values and why are they so expensive?
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How much can Indian exporters save with verified actual emissions?
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What is the CBAM certificate price in 2026?
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What happens to CBAM costs by 2034?
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Turn the index into your number. Free.
The EU's definitive CBAM phase began in January 2026, and buyers now demand verified actual emissions. We cover the full cost of your first CBAM report — for the April–June 2026 quarter — so an inflated EU default value never costs you an order. Start by 30 September 2026; continuing after is a normal paid engagement, only if you choose to.
Each report is a managed, expert-led engagement, so we take on a limited number of exporters free each quarter.