India’s small steel exporters are reporting the first wave of shipment seizures at European ports and order cancellations due to missing compliance reports, marking the most serious disruption yet for the country’s steel micro, small and medium enterprises (MSMEs) since the European Union’s (EU’s) Carbon Border Adjustment Mechanism (CBAM) entered its payment phase on January 1.
India was unable to secure any concession on CBAM in the free trade agreement signed with the EU on January 27.
CBAM is the EU’s tool to impose a “fair price” on carbon embedded in carbon-intensive goods — such as steel, cement, and aluminium — entering the bloc. It is mandatory for imports exceeding 50 tonnes per calendar year.