The EU's Carbon Border Adjustment Mechanism entered its definitive phase in January 2026, making carbon disclosure a financial obligation for Indian exporters of steel, aluminium, cement, and fertiliser. India's steel relies heavily on coal-based blast furnaces, so its covered exports carry high embedded emissions. The Centre for Science and Environment estimates the mechanism could eventually add a cost equal to roughly a quarter of the value of affected exports. Buyers are already demanding firmer emissions data, and shipments have softened. A core problem is that carbon accounting systems don't align. India's Carbon Credit Trading Scheme uses emissions-intensity targets, while the EU attaches a monetary value to embedded emissions. It's unclear whether compliance under an intensity-based system will qualify for a deduction from the EU levy. If not, exporters risk paying twice. The article argues that India needs a robust domestic carbon measurement and verification system, with standard methods, calibrated emission factors, and an auditable registry, because credible carbon accounting is becoming export infrastructure.
