Tusharika Sharma: Hello everyone, welcome to another great episode of our podcast. Today, we are talking about CleanCarbon. For those in manufacturing, especially steel and iron, you likely know about carbon credits. Today, we are joined by Nilesh Bhattad, founder of CleanCarbon.ai, to discuss how to navigate new compliance regulations, specifically the EU Carbon Border Adjustment Mechanism (CBAM).
Mr Nilesh Bhattad: Thank you, Tusharika. It’s a pleasure to be here.
Tusharika Sharma: Mr. Nilesh, you have been in the entrepreneurial space for a long time. What prompted you to start CleanCarbon.ai?
Nilesh Bhattad: We have been in IT services since 2012. In 2017, we worked with Canadian companies on sustainability. We realized that measuring carbon emissions is not just a Western problem; it’s a global one. We launched CleanCarbon.ai in 2023 to help Indian companies measure and reduce their carbon footprint .
Tusharika Sharma: You’ve integrated Artificial Intelligence into a very physical, industrial process like steel and iron manufacturing. How does that work?
Nilesh Bhattad: India’s main advantage is technology. Data collection from reactors and boilers is repetitive and tedious. AI automates this, ensuring accuracy and lowering costs. We also have recommendation engines to help suggest ways to reduce emissions.
Tusharika Sharma: Can you explain carbon accounting in simple terms? Is it necessary for businesses outside the manufacturing sector?
Nilesh Bhattad: Carbon accounting is simply tracking the carbon emitted during the production of a product. Whether it’s a spoon or a nut and bolt, global buyers now demand proof of sustainability. The greener your product, the more attractive it is to the market.
Tusharika Sharma: Do you think carbon-related taxes will be the ‘next GST’?
Nilesh Bhattad: It is the ‘big brother’ of GST. GST is domestic, but carbon taxation is borderless. Under CBAM, you must calculate emissions for exports to Europe, and the tax depends on the volume of your emissions.
Tusharika Sharma: Why do you call carbon data the ‘new business currency’?
Nilesh Bhattad: Without this data, you cannot trade in changing global markets. Furthermore, banks now use this data for ‘green financing,’ providing loans based on your sustainability ratings.
Tusharika Sharma: Is CBAM an opportunity or a threat for Indian exporters?
Nilesh Bhattad: If you act fast and understand your data, it is an opportunity. If you remain passive, it is a significant threat to your business.
Tusharika Sharma: Can you clarify the timeline for CBAM payments?
Nilesh Bhattad: The definitive phase began on January 1, 2026. While the tax applies to shipments landing in Europe from that date, actual payments through the purchase of carbon certificates will begin in early 2027.
Tusharika Sharma: The legal burden of CBAM falls on the European buyer, but how does this impact the exporter?
Nilesh Bhattad: Economically, the burden falls on the exporter. Buyers will face higher costs and will either demand that you lower your emissions or decrease your prices.
Tusharika Sharma: How important is it to provide actual emission data versus using default values?
Nilesh Bhattad: Default values are set intentionally high—based on worst-performing industries. If you don’t calculate your actual emissions, you could pay 200 to 300 Euros extra per ton.