A new study published in Nature Climate Change examines early signals from the EU Carbon Border Adjustment Mechanism on India's iron and steel exports. Researchers integrated firm-level export data with emissions estimates and found that high-emission Indian steel producers significantly reduced both export quantities and revenues to the EU during the CBAM reporting phase. Low-emission firms, by contrast, maintained their export levels. The findings suggest the policy is working as intended, creating trade advantages for cleaner producers while putting pressure on high-emission suppliers. India is among the EU's top steel suppliers and has roughly double the emissions intensity of EU steel production for an equivalent product mix. The CBAM transitional phase runs through 2025, with the definitive phase starting in 2026 when importers must purchase CBAM certificates. This is one of the first empirical looks at how CBAM is affecting actual trade flows at the firm level rather than just modeling aggregate impacts. For anyone tracking carbon border adjustments, industrial decarbonization, or EU climate trade policy, this paper provides concrete early evidence of supply chain shifts in response to carbon pricing asymmetry.
