The Carbon border bill is smaller than feared
Indian steel exporters have spent a year bracing for the EU's carbon border levy. A study by the climate think tank Sandbag, reported on August 18, models the bill at €407 million in 2034 under a realistic scenario, compared with €762 million under business-as-usual. The difference is not new technology. It is deciding which plant's output goes to which market.
What changes on the ground
Sandbag modelled product categories, production routes, and existing capacity rather than national emission averages, which is where the earlier, larger estimates came from.
The mechanism is reallocation: send low-emission steel from gas-based DRI-EAF and scrap-based EAF plants to Europe, and serve domestic and other markets with the carbon-intensive output.
Sandbag's executive director says India's steel industry has the know-how and scale to absorb CBAM if suppliers respond appropriately, thereby shifting the burden to commercial planning rather than capital spending.
What is already moving
Thirteen working groups have been set up between India and the EU on sustainable steel production.
Verification remains the live risk: where emissions are not verified by EU-accredited agencies, default country values apply, and those are far more expensive than verified actuals.
Earlier modelling still exists and disagrees; an ICRIER study projected a 24% fall in India's steel exports to the EU, so the range of credible outcomes remains wide.
The bigger trade picture
CBAM increasingly looks less like a wall and more like a sorting mechanism, separating producers by route and by paperwork rather than by nationality. Plants with EAF or gas-based DRI capacity and verified emissions data hold an export asset; plants without either face the default values. The same logic will apply wherever carbon border rules spread next.