Introduction
Shubham Thakur: Welcome to this episode of the Carbon Edge podcast by CleanCarbon.ai, which focuses on decoding CBAM and understanding everything about the Carbon Border Adjustment Mechanism. I’m Shubham Thakur, climate communications specialist and CBAM expert at Clean Carbon. In this episode, we will discuss how CBAM impacts India’s manufacturers on the ground.
To discuss this further, we have Mr. Kishan Yadav (General Manager – Process and System Improvement) from Yerik International, who will share his thoughts and experiences on turning CBAM reporting challenges into a business and competitive advantage. Thank you so much, Kishan Yadav ji. Let’s begin the interview.
The EU CBAM Learning Journey
Shubham Thakur: My first question is: how did Yerik International first learn about the EU’s CBAM regulation, what was your initial reaction, and how did you expect it to impact your business trade with the European Union?
Kishan Yadav: First of all, thank you Mr. Shubham for giving me this opportunity to talk to CleanCarbon.ai. I am also thankful to Mr. Nilesh Bhattad. About a year ago, in 2024, we received queries from European Union customers raising questions about CBAM reporting. At the time, we had no knowledge about EU CBAM and had not even heard about it in the local trading market or business community.
When inquiries multiplied, I contacted Mr. Nilesh Bhattad from CleanCarbon.ai. Their team visited our company location and guided us on how CBAM works and how industrial carbon footprints impact our trade in the current scenario.
Challenges in CBAM Implementation
Shubham Thakur: So you learned about CBAM once your customers started requesting reports. Initially, what were your biggest challenges regarding compliance, especially for sectors like tractors and heavy machinery?
Kishan Yadav: We faced several immediate challenges. First, our in-house capabilities for calculating CBAM requirements—such as our electricity consumption and grid usage—were limited. We did not know how to collect data related to our fuel consumption, cutting oils, hydraulic oils, and furnace oils. We also didn’t know how to account for LPG and chemical usage in our production unit’s paint shop.
Beyond calculating carbon emissions, we had difficulties analyzing Material Safety Data Sheets (MSDS) and using emission factors to compare our emissions. Externally, our major challenge came from our vendors, as they lacked data collection systems and knew nothing about EU CBAM.
Supplier Relations and CBAM Data Collection Challenges
Shubham Thakur: What specific challenges did you encounter on the vendor side when collecting data under CBAM?
Kishan Yadav: Under the guidance of our CBAM consultant, Mr. Nilesh Bhattad, I personally visited several vendors to assist with data collection. We soon realized that most suppliers had no framework for collecting, calculating, or analyzing data. They only maintained incoming and outgoing material logs without tracking emission tonnages or material processing volumes. Most suppliers lacked ISO systems or standard industry norms. Involving our vendors in the CBAM supply chain was our single biggest challenge.
Shubham Thakur: Have you been able to convince your vendors to share the required data for CBAM compliance?
Kishan Yadav: Vendors still find it difficult to provide data. Some supplied information after multiple discussions and emails. In cases where vendors resisted despite site visits, we involved our top management. While some vendors now provide proper data, others remain stuck. We are continuing our outreach, but if suppliers remain incapable of providing basic data requirements, we are replacing them. Going forward, we will not proceed with incomplete information.
CBAM Impact on Aluminium Export Operations
Shubham Thakur: Looking ahead to 2026—when financial adjustments, penalties, and strict audits take effect—how will CBAM impact supply chains and business models in the Indian aluminium industry?
Ravi Kumar: To remain competitive and expand our presence in the European market, full compliance is non-negotiable. European buyers are actively screening suppliers based on carbon intensity.
CBAM forces companies to evaluate emission hotspots across their operations and invest in energy-efficiency initiatives. From a financial perspective, the lower your embedded carbon emissions, the lower your carbon tax exposure under CBAM. Achieving lower carbon intensity directly enhances market competitiveness and protects profit margins.
CBAM’s Operational Impact and Strategy
Shubham Thakur: Replacing non-compliant suppliers is a major operational shift. How is CBAM compliance impacting your day-to-day business operations, from production to reporting?
Kishan Yadav: The impact has been positive in terms of reducing emissions and optimizing our processes. In our forging division, traditional furnace oil and low-grade oils create significant pollution. We are replacing those with lower-footprint alternatives, such as graphite-based lubricants.
In our machining center, we are replacing conventional cutting oils with biodegradable oils that reduce carbon footprints without harming the environment. We are also retrofitting our heat-treatment furnaces. The older burner designs caused significant heat loss, which negatively affects our CBAM metrics. Replacing those burners improves thermal efficiency and eliminates environmental pollutants.
CBAM Cost and CBAM Competitive Edge
Shubham Thakur: Costing is a major part of this compliance journey. Has CBAM created an extra regulatory burden, or have you fully integrated it into your operational costs?
Kishan Yadav: Costing is a major factor because profit margins are shrinking. We have to work simultaneously along two strategic tracks: lean manufacturing and CBAM compliance. Since customers rarely absorb compliance costs, we must reduce our carbon footprint by eliminating operational waste, maximizing resource efficiency, and replacing outdated processes.
Shubham Thakur: As you expand trade in the European Union, accurate CBAM reporting becomes essential. How critical is early compliance to securing future export opportunities?
Kishan Yadav: It is crucial. Every country is setting net-zero targets, so this shift is global, not just European. Adapting to CBAM now gives us a strong advantage. European buyers will actively favor suppliers who already possess the infrastructure and capability to provide accurate CBAM reporting.
Shubham Thakur: So compliance directly unlocks more business opportunities?
Kishan Yadav: Absolutely. Many manufacturers are still unaware of CBAM reporting or aren’t operating at that level yet. While some buyers may not demand it immediately, full compliance will become 100% compulsory in the near future.
Future Outlook and Technology
Shubham Thakur: As we move past the transition period toward the definitive regime—where penalties and carbon adjustments take full effect—how do you see CBAM shaping global trade for manufacturers in developing markets like India?
Kishan Yadav: The direction is clear: we must save nature and tackle global warming. European governments initiated this framework years ago, and India is participating through international summits and awareness programs. Starting early gives manufacturers a golden opportunity to conduct deep operational audits, identify inefficiencies, and adopt low-emission technologies ahead of time.
Shubham Thakur: Identifying and correcting data errors early prevents major compliance risks later.
Kishan Yadav: Exactly. If we don’t start on time, hidden operational gaps remain unaddressed. Acting now allows us to replace high-emission resources with cleaner alternatives.
Shubham Thakur: Studies suggest that full CBAM implementation—with strict audits, verification, and penalties—will add administrative costs that could impact product pricing in the EU market. How do you view this pricing impact?
Kishan Yadav: Cost absorption is a major pain point for suppliers because customers resist price increases. To protect margins, suppliers must re-engineer processes, adopt lean manufacturing, and remove non-value-adding activities that don’t generate revenue.
Embedded emissions may carry costs around €8 to €10 per ton of CO₂, and penalties during the definitive period could exceed €50 per ton. Managing these costs requires strong collaboration between buyers and suppliers to ensure long-term business sustainability.
Shubham Thakur: Given the massive volume of data required for CBAM—direct emissions, indirect emissions, precursors, and supplier metrics—what is the role of technology in accelerating your reporting?
Kishan Yadav: Technology plays a massive role in refining industrial processes. For example, replacing polluting inputs like kerosene or adopting solar power directly improves carbon reporting metrics.
How CleanCarbon.ai Helped Yerik International
Shubham Thakur: How does an automated system like CleanCarbon.ai accelerate reporting compared to manual Excel sheets?
Kishan Yadav: The CleanCarbon dashboard has completely transformed our workflow. Initially, we compiled reports manually using Excel templates, which was time-consuming. The dashboard simplifies data entry across precursor inputs, electricity consumption, and fuel metrics, generating complete reports automatically.
Shubham Thakur: In one sentence, what is the biggest advantage of using an automated dashboard over manual spreadsheets?
Kishan Yadav: It is extremely user-friendly, highly effective, and allows us to retrieve historical compliance data across any time period in a single click.
Shubham Thakur: Thank you so much, Kishan ji. It was a pleasure speaking with you. I am sure our audience will gain valuable insights from your experience in implementing CBAM reporting. Thank you for your time.
Kishan Yadav: Thank you, sir.