Indian steel exports to European Union (EU) is likely to come under pressure during calendar 2026 and 2030 as the region implements Carbon Border Adjustment Mechanism (CBAM) framework, rating agency ICRA said in a steel sector report on Tuesday, June 27.
The impact on steel shipments to EU could range between 15 percent to 40 percent and expected in the period 2026 and 2030, ICRA said.
EU recently signed the mechanism laying the framework for the imposition of taxes on embedded carbon imports from six sectors, which includes steel, aluminium, cement, hydrogen, electricity, and fertiliser.
“CBAM compliance requirements could pull down the profits of Indian steel exports to the EU by $65-165/mt between calenda year 2026 and calendar year 2034. CBAM to impact between 15-40 percent of India's annual steel exports to Europe. Failure to reduce the carbon footprint may result in lower profits in EU markets," the ICRA report said.
According to ICRA, India exports up to 3-5 million mt of finished steel to Europe every year against a domestic production of 122 million mt achieved in 2022-23.
Average emission intensity of leading domestic primary steel producers is 12 percent higher than the global average level from the blast furnace route, ICRA said.