Posted on 19 Nov 2025
The provisional EU CBAM benchmarks point to a wide spread in cost exposure for Indian steel exporters depending on whether verified mill-level emissions data can be supplied, Kallanish learns from sources.
Hot rolled coil produced via the blast furnace/basic oxygen furnace route carries a benchmark of 1.53 tonnes of CO2/t of steel, against which importers must surrender CBAM certificates according to the phase-in rate, according to the leaked European Commission’s draft document seen by Kallanish.
The 2026 CBAM obligation for Indian HRC exporters is calculated at approximately €64.7/tonne ($75/t). This is based on an industry-average Indian BF/BOF emissions intensity of 2.3t CO2/t and assuming an €80/t EU ETS carbon price, according to Kallanish analysis. But when verified plant-level emissions are unavailable, importers must apply default values, which are significantly higher.
For India, the default figure for BF/BOF route HRC is estimated at 4.27 t CO2/t, yielding a 2026 CBAM cost of roughly €222/t. This difference over three times higher than if actual data is provided.
Beyond HRC, the leaked benchmarks imply similarly wide differentials across other flat and long steel categories depending on whether mill-level emissions are provided.
Based on CRC’s BF/BOF route benchmark of 1.641t CO2/t, its 2026 cost is calculated at €52.3/t and €210/t for default values, applying the same assumptions.
Hot-dip galvanized material has a higher benchmark at 1.692t CO2/t. Its 2026 cost equates to €48.1/t with verified data versus about €205/t on default emissions.
Plate (under slab-based products) aligns closely with HRC benchmarks at 1.53t CO2/t. Its 2026 CBAM exposure therefore mirrors HRC at €64.7/t with verified emissions and €222/t using India’s default factor.
Rebar’s benchmark matches semis and longs at 1.52t CO2/t. The verified-data cost calculation is around €66.1/t, while the default-based cost approaches €224/t.
Costs rise further each year as the phase-in rate declines. By 2030, when only 51.5% of the benchmark is deducted, the verified-data CBAM cost on Indian HRC increases to around €121/t, while the default-based cost exceeds €278/t.
In 2034, when the phase-in falls to zero and importers must pay on 100% of embedded emissions, the CBAM charge reaches €184/t on verified Indian HRC and €341/t under default values.
“We still need to see the final version. This is a leaked benchmark. And it is not clear whether the EU will fully accept company-level data or continue to rely partly on country defaults,” another source cautions.
However, “Indian companies would be willing to export, irrespective of the [CBAM] price. There’s plenty of material to liquidate [and] every company [is] under tremendous pressure,” another market participant counters.
This dynamic places pressure on Indian mills to supply verified emissions declarations, including detailed precursor-level data, to prevent importers from defaulting to country factors.
Source:Kallanish
