On 1 January 2026, the EU's Carbon Border Adjustment Mechanism entered its definitive phase. Reporting obligations that had applied since 2023 were joined by a real, priced obligation: importers of steel and iron, aluminium, cement, fertilisers, hydrogen and electricity now carry a cost for the carbon embedded in what they bring into the EU.
Where the burden actually lands
CBAM is written as an obligation on EU importers. In practice, the burden runs backward down the supply chain to whoever made the product. An EU buyer cannot supply data it does not have — so an Indian exporter in one of the six covered sectors now needs to produce verifiable, product-level embedded-carbon figures, or risk losing access to one of its largest external markets.
This is not a distant compliance deadline. It is already the operating reality for anyone shipping steel, aluminium, cement, fertiliser, hydrogen or electricity-intensive goods into Europe.
The problem is the accounting, not the carbon
Most Indian manufacturers have never had to measure emissions at this level of granularity, because nothing domestic has required it. European industry has been building exactly this discipline for the better part of a decade, first under the EU Emissions Trading System and now under CBAM — it is mature, documented practice there, and largely unbuilt here.
That gap is not a technology problem. It is a measurement and reporting problem: knowing what to count, building the systems that count it consistently, and producing figures that will survive an EU auditor's scrutiny rather than an internal report's looser standards.
Where we sit in this
This is our Climate & Sustainability pillar — baselining, data systems, reporting — applied to a specific, dated, external deadline rather than a general aspiration. And it is exactly the kind of problem our structure exists for: European reporting standards understood on one side of the practice, Indian operating reality understood on the other, with no translation layer missing in between.
This will not be the last one
CBAM will not be the only EU rule that reaches into Indian supply chains this way. Due diligence and deforestation-linked regulation are moving through Brussels on a similar trajectory, and CBAM's own sectoral coverage is expected to widen. The organisations building the measurement discipline now, ahead of the next deadline, will not be the ones scrambling when it lands.
Related: Climate & Sustainability, International Partnerships.