The EU’s Carbon Border Adjustment Mechanism (CBAM) will have a milder financial impact on Indian steel exports than previously estimated, climate think tank Sandbag reported. Instead of relying on national emission averages, Sandbag evaluated product categories, production routes, and existing capacities.

The study reveals that Indian exporters can lower their CBAM burden from EUR 762 million to EUR 407 million by 2034 through resource reallocation, directing low-emission steel from gas-based DRI-EAF and scrap-based EAF plants to the EU while supplying carbon-intensive products domestically. 

Sandbag noted that this strategic reshuffling enables Indian exporters to maintain competitiveness without requiring an immediate, full-scale technological overhaul across the industry.