- Fasteners are covered: Products classified under CN heading 7318 fall within the EU’s CBAM scope.
- Steel supplier data matters: Embedded emissions from the steel used to manufacture fasteners can drive much of the product’s emissions figure.
- Verified data is essential: From 2026, actual emissions data must be verified by an accredited third-party verifier. Otherwise, default values apply.
For Indian steel and fastener exporters, CBAM is no longer a future compliance concern. European buyers need emissions data for covered imports, and suppliers that cannot provide reliable, verified figures may face higher costs for their customers and greater commercial pressure.
Does CBAM Cover Steel Components and Fasteners, or Just Steel?
Yes, CBAM covers specified downstream steel products, including fasteners classified under CN heading 7318, not just raw steel.
The EU’s Carbon Border Adjustment Mechanism covers iron and steel, aluminium, cement, fertilisers, electricity and hydrogen, along with specified downstream products. This brings certain screws, bolts, nuts and similar fasteners within its scope.
For Indian Tier-1 manufacturers supplying automotive components, machinery, construction hardware or industrial fasteners to European customers, the first step is to check the customs classification of every exported product. Not every steel component is automatically covered, so the exact CN code matters.
Source: European Commission, CBAM sectors
What Emissions Data Will EU Buyers Ask Indian Suppliers For?
EU buyers need product quantities and embedded-emissions information linked to the supplier and the product’s customs classification.
Manufacturers should prepare production and emissions records that support the calculation of emissions per tonne of covered goods. For iron and steel goods during the definitive period, CBAM accounts for direct emissions, not indirect emissions from purchased electricity.
The information EU buyers may request includes:
- Product descriptions, CN codes and quantities supplied.
- Manufacturing installation and production-process details.
- Direct emissions associated with production.
- Emissions data for the steel and other relevant precursors used in the product.
- Supporting activity data and documentation for emissions calculations.
The European Commission’s CBAM guidance for installation operators outside the EU explains the requirements for monitoring and calculating embedded emissions.
A general company-level carbon footprint is not a substitute for product-level data. Manufacturers need consistent records that connect their production processes and material inputs to the goods supplied to European customers.
Why Does the Steel You Buy Affect Your CBAM Number?
The emissions associated with producing the steel used in a fastener can have a significant influence on its embedded-emissions figure.
A fastener manufacturer may carry out wire drawing, forming, heat treatment and other production processes. However, the emissions calculation also considers the steel precursor under the prescribed CBAM methodology. The emissions profile of the steel supplier can therefore affect the final product’s reported figure.
This creates a supply-chain data challenge similar to Scope 3 accounting. Manufacturers need emissions information from upstream steel suppliers, not just records of their own electricity use and production activity.
Procurement teams should begin collecting supplier emissions data and identifying the steel inputs used in products exported to the EU.
What Happens If You Cannot Provide the Data?
If actual emissions data is unavailable or cannot be verified, the EU importer must use the prescribed default values instead.
Under Commission Implementing Regulation (EU) 2025/2621, default emissions values for iron and steel goods receive the following mark-ups when calculating CBAM certificate requirements:
- 2026: 10%
- 2027: 20%
- 2028 onwards: 30%
These mark-ups increase the default emissions values used for the calculation. If a manufacturer’s actual emissions are lower than the prescribed default value, using default values can increase the importer’s potential CBAM cost.
The European Fastener Distributor Association (EFDA) has warned that European importers may avoid suppliers that fail to provide emissions data. In a Fastener World interview with EFDA’s secretary general, the association highlighted the importance of suppliers providing valid data to support European importers’ CBAM reporting.
For Indian exporters, missing data can therefore become a commercial disadvantage, even when their actual production emissions are relatively low.
Why Is Third-Party Verification Necessary Under CBAM?
From 2026, actual emissions data used for CBAM declarations must be checked by an independent verifier accredited under the EU framework.
Manufacturers must monitor and calculate emissions using the prescribed methodology, maintain supporting records and arrange verification by an accredited third party. Unverified actual data cannot be used as verified actual emissions for the declaration. Default values apply instead.
Verification takes place at the installation level, where the covered goods are produced. Manufacturers should therefore confirm the verification requirements for their production facilities and coordinate with their European buyers on the information and documentation needed.
Read the European Commission’s CBAM verification guidance for details on accredited verifiers and the verification process.
When Do CBAM Costs Actually Start?
CBAM entered its definitive phase on 1 January 2026, with certificate purchases beginning in February 2027 and the first annual declaration due by 30 September 2027.
The key dates are:
- 1 January 2026: Definitive CBAM requirements begin.
- 1 February 2027: EU Member States begin selling CBAM certificates to authorised declarants.
- 30 September 2027: First annual CBAM declaration and certificate surrender deadline for covered imports made during 2026.
These dates are set out in Regulation (EU) 2025/2083.
The EU importer is responsible for the CBAM declaration and certificate obligations, although the cost may be reflected in the exporter’s contract price, commercial terms or future sourcing decisions. Indian suppliers should not wait until 2027 to organise emissions records, because buyers need time to assess and verify the data.
Is There a 50-Tonne CBAM Exemption?
Yes. An EU importer bringing in 50 tonnes or less of covered goods per calendar year is exempt under the mass-based threshold, subject to the statutory conditions.
The threshold applies per importer and aggregates covered goods across the iron and steel, aluminium, fertilisers and cement sectors. It is not a separate 50-tonne allowance for every product or customs code. Electricity and hydrogen are excluded from this threshold.
If the importer exceeds the threshold during the year, CBAM obligations apply to all covered goods imported by that importer during that calendar year.
Source: Regulation (EU) 2025/2083.
Can Lower-Carbon Steel Reduce CBAM Costs?
Yes, lower embedded emissions can reduce the number of CBAM certificates required, subject to the prescribed calculation and adjustment rules.
Manufacturers should assess steel suppliers on documented emissions performance as well as quality, cost and technical specifications. Claims about low-carbon steel must be supported by reliable data that can be used in the CBAM methodology.
What Should an Indian Tier-1 Manufacturer Do in the Next 90 Days?
Use the next 90 days to establish a practical CBAM-readiness process:
- Days 1 to 15: Map EU-bound products against CN codes and identify which products fall within CBAM scope.
- Days 16 to 30: Collect plant-level activity data, production volumes and steel supplier emissions information.
- Days 31 to 45: Calculate embedded direct emissions using the prescribed methodology and identify missing or unreliable data.
- Days 46 to 60: Arrange for an accredited third-party verifier to review the emissions data and supporting records.
- Days 61 to 90: Address data gaps, engage suppliers on emissions hotspots, share verified information with EU buyers and assess lower-emissions material and process options.
The objective is to establish a repeatable process for collecting, calculating, verifying and improving emissions data before customers need it for their CBAM obligations.
How Fitsol Helps Manufacturers Measure and Reduce Emissions
Fitsol supports manufacturers through emissions measurement, supplier data collection and practical decarbonisation work.
Kyoto measures plant and process emissions using activity data rather than spend estimates. This gives manufacturers a clearer view of the emissions associated with their operations and production processes.
GreenAlign collects emissions data from suppliers, including steel suppliers. For one Tier-1 automotive client, more than 500 suppliers were baselined, helping establish a structured view of supplier emissions.
Fitsol then works on identified emissions hotspots on the ground, helping manufacturers focus their reduction efforts where they matter most.
Prepare your manufacturing operations for a data-driven, lower-emissions future with Fitsol Kyoto.
Frequently Asked Questions
1. Who pays for CBAM, the Indian exporter or the EU importer?
The EU importer is legally responsible for CBAM declarations and certificate obligations. However, the commercial cost may be reflected in contract pricing, negotiations or sourcing decisions affecting the Indian exporter.
2. Can EU importers use default emissions values instead of actual data?
Yes. Default values may be used under the CBAM rules. For iron and steel goods, they receive mark-ups of 10% in 2026, 20% in 2027 and 30% from 2028 onwards. Actual emissions data must be verified by an accredited third-party verifier to be used as verified actual data.
3. Does the 50-tonne exemption apply to every Indian supplier?
No. The threshold applies to each EU importer, not each Indian supplier. It aggregates covered imports across the iron and steel, aluminium, fertilisers and cement sectors. Importers exceeding the threshold become subject to CBAM obligations for all covered goods imported during that calendar year.
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