EU CBAM and deforestation rules: what Indian exporters must do

This guide is for exporters selling metals, cement, fertilisers or forest and farm commodities to the European Union. It explains what the EU's carbon border adjustment mechanism (CBAM) and deforestation regulation (EUDR) require, and what data your EU buyer will ask you for.

Part 1: CBAM

What it covers

CBAM puts a carbon price on certain imports so that they bear a cost similar to goods made under the EU's emissions trading system. It covers six sectors: iron and steel, aluminium, cement, fertilisers, hydrogen and electricity. Coverage is by CN code and includes some downstream products such as steel tubes, fasteners and aluminium structures. Check your codes against Annex I of the CBAM Regulation, (EU) 2023/956.

Where things stand

• The transitional period, with quarterly reporting and no payment, ended on 31 December 2025. The definitive period began on 1 January 2026.
• Only an authorised CBAM declarant may import covered goods above the threshold. Importers that applied by 31 March 2026 could keep importing while their application was pending.
• Under the simplification adopted in 2025 (Regulation (EU) 2025/2083), an importer bringing in less than 50 tonnes net mass a year of covered goods, counted together, is exempt. Hydrogen and electricity are not covered by this exemption. Once an importer crosses 50 tonnes, obligations apply to all of that year's imports.
• CBAM certificates go on sale from 1 February 2027. The first annual declaration and surrender, for goods imported in 2026, is due by 30 September 2027. For 2026 imports, the certificate price follows the quarterly average of EU carbon allowance auction prices.
• The European Commission has proposed extending CBAM to about 180 more steel- and aluminium-intensive downstream products from 1 January 2028. This is a proposal, not yet law.

What your EU buyer needs from you

The legal obligation is on the EU importer, but the cost depends on your data. The importer declares the embedded emissions of the goods, using either:

• actual emissions from your installation, calculated by the EU method and verified by an accredited verifier; or
• default values set by the Commission, which include a mark-up that rises over time (for most goods 10% for 2026, 20% for 2027 and 30% from 2028).

Default values are deliberately set high, so buyers will prefer suppliers who can provide verified actual data. For steel, aluminium and hydrogen only direct emissions are counted; for cement and fertilisers, indirect emissions from electricity also count. A carbon price actually paid in the country of origin can be deducted if it is properly evidenced.

Steps for an Indian exporter

1. List your products by CN code and confirm which fall in Annex I.
2. Ask each EU buyer whether they are above the 50-tonne threshold and authorised, and what data and format they want. Most use the Commission's communication template for installation operators.
3. Set up monitoring at installation level: fuels, electricity, process inputs and the embedded emissions of precursors you buy in, such as billets, slabs or primary aluminium. Ask your own suppliers for their data.
4. Engage an accredited verifier for your annual emissions report, including a site visit where required.
5. Agree in contracts who pays for data and verification, and how confidential data is protected.

Part 2: EUDR

What it covers

The EU Deforestation Regulation, (EU) 2023/1115, bans placing on the EU market, or exporting from it, products made from seven commodities unless they are deforestation-free, produced legally and covered by a due diligence statement. The commodities are cattle, cocoa, coffee, oil palm, rubber, soya and wood, together with listed products made from them, such as chocolate, furniture, paper and tyres.

"Deforestation-free" means produced on land not deforested after 31 December 2020; for wood, also without forest degradation after that date. "Legal" means produced in line with the laws of the country of production, including land use, environmental, labour and tax laws.

Application dates after the delays

Who or what	Applies from
Large and medium operators and traders	30 December 2026
Micro and small operators (those already under the EU Timber Regulation: 30 December 2026)	30 June 2027
Products newly added in 2026 (soluble coffee, certain palm oil derivatives, frozen cattle tongues)	30 December 2027

These dates come from the amendments of December 2024 and December 2025 (Regulation (EU) 2025/2650). A delegated act adopted in July 2026 (Delegated Regulation (EU) 2026/2102) also takes cattle hides, skins and leather, retreaded tyres, some vulcanised rubber articles and certain vehicle seats out of scope, and confirms that samples for testing are outside it. Check the current Annex I for your exact code.

What your EU buyer needs from you

Under the amended rules, only the operator who first places the product on the EU market files a due diligence statement in the EU information system; later traders in the chain refer to it. That first operator is usually your importer, and it will need from you:

• geolocation of every plot of land where the commodity was produced: a latitude and longitude point, or a polygon for plots larger than four hectares (except for cattle);
• the date or period of production, the quantity and the product description with HS code;
• the country of production and your suppliers' details;
• evidence that production was legal, such as land records and permits;
• proof that EUDR-compliant material was kept separate from material of unknown origin through processing.

The EU classifies countries as low, standard or high risk. A lower risk class means simpler checks by your buyer, but geolocation and legality information are still required. Check India's current classification on the Commission's EUDR pages.

Steps for an Indian exporter

1. Map your supply chain back to the farm, estate or forest plot. For smallholder coffee or rubber, this means collecting plot coordinates from growers or aggregators.
2. Set up traceability so compliant lots stay segregated from collection to shipment.
3. Prepare a standard data pack for buyers in the format they request, and agree it before you ship goods that will arrive after 30 December 2026.

Common mistakes

• Assuming the rules do not affect you because your buyer is the one regulated.
• Sending CBAM data without verification, which leaves your buyer on costly default values.
• Mixing traceable and untraceable lots, which makes the whole consignment non-compliant.
• Relying on old dates or product lists: both regimes changed several times in 2025 and 2026.

Related on Exportsmitra

• Policy and market alerts
• Choosing export markets: free research tools that work
• HS Code Finder
• Document Checklist Generator

Sources

• European Commission: Carbon Border Adjustment Mechanism
• Regulation (EU) 2025/2083 simplifying CBAM
• ICAP: EU CBAM enters compliance phase (default value mark-ups, certificate pricing)
• European Commission: Regulation on deforestation-free products
• Regulation (EU) 2025/2650 amending the EUDR
• European Commission: delegated act on EUDR product scope (July 2026)

Last checked 1 October 2026. Rules change: confirm with your EU buyer and the European Commission's guidance before you act.