CBAM Has Set Three Prices in 2026. India’s CCTS Has Set None.

At a glance

Two schemes, two clocks

The EU prices Indian carbon every quarter; India has yet to price it once

EU CBAM entered its definitive phase on 1 January 2026. The Commission has since published a certificate price in the first week after each quarter: €75.36 on 7 April, €75.28 on 6 July and €82.32 on 5 October. The fourth-quarter price is due on 4 January 2027.

India’s Carbon Credit Trading Scheme has obligations in force for about 490 entities in seven sectors, notified in October 2025 and January 2026. No Carbon Credit Certificate had traded by early October 2026. The two schemes overlap in aluminium and cement, where both set obligations on the same plants. Only CBAM has put a price on those tonnes.

The exposure is large. India shipped close to 3 million tonnes of steel to the EU in FY2025-26, according to the Commerce Ministry. A June 2026 ICRIER working paper estimates that EU-bound iron and steel exports could fall 23.94% at a carbon price of US$86.01 per tonne.

Exhibit 1 · CBAM is in its settlement phase; the CCTS has not reached its first trade

Sources: European Commission; Regulation (EU) 2025/2083; ICAP; BEE Detailed Procedure for Compliance Mechanism.

The CBAM side

The Q3 price of €82.32 is the first large move of the year

The Q3 price covers goods imported between 1 July and 30 September 2026. It is €7.04 (9.4%) above Q2, after two quarters that were eight cents apart.

For 2026, each quarter’s price is the weighted average of EU ETS auction clearing prices in that quarter (Article 21(1a) of the CBAM Regulation, inserted by Regulation (EU) 2025/2083; method in Implementing Regulation (EU) 2025/2548). The price follows the goods by quarter of import. A declarant buying certificates in March 2027 for steel that reached the EU in August 2026 pays €82.32 for each one, whatever the EU carbon price is that day. From 2027 the Commission sets the price weekly, so the cost of each shipment will move with the EU carbon market.

The CCTS side

The CCTS has obligations but no price, and no confirmed date for its first trade

Entities that beat their intensity targets receive certificates. Entities that miss them must buy and surrender certificates, which are to trade on IEX, PXIL and HPX under the CERC’s 2026 regulations. No trading session had been held by early October, and the floor and ceiling prices had not been set.

The first compliance year follows a fixed sequence in BEE’s compliance procedure. Obligated entities file Form A with verified data by 31 July, BEE completes its assessment by 30 September, certificates are issued around 30 October, and the first trade follows within three months of issuance. The filing deadline for FY2025-26 was 31 July 2026. No certificate had been issued or traded by early October. On the original schedule, the first trade was due by about the end of January 2027, just before CBAM certificate sales open on 1 February. Carbon Pulse reported on 8 October that obligated entities have been given three more months to submit verified compliance data. If it is correct, issuance would move to around the end of January 2027 and the first trade to around April 2027, after CBAM certificate sales have opened.

Steel is further behind. A second draft of targets for 255 iron and steel units was published in June 2026, and we have found no final notification. Indian steelmakers, who carry most of the country’s CBAM exposure, have no CCTS obligation in force and have paid no CCTS price.

What the gap costs

Without a CCTS price, there is nothing to deduct

Article 9 of the CBAM Regulation lets an EU importer deduct the carbon price effectively paid in the country of production, net of any rebate or other compensation. The Commission’s draft implementing rules, published on 13 May 2026, would also net out free allowances and emissions below a baseline under a baseline-and-credit system. They had not been adopted by mid-October, and no country’s carbon price had been recognised under them. For Indian goods the problem comes earlier, because no CCTS certificate has yet traded, so no CCTS price has been paid. It also runs deeper. The CCTS is a baseline-and-credit scheme, so even once trading starts, only emissions above an entity’s intensity target will carry a price.

Talks have not changed that. On 12 October, Power Secretary Pankaj Agarwal and Gerassimos Thomas, Director-General of the Commission’s DG TAXUD, met in New Delhi and agreed to continue dialogue on carbon markets, CBAM methodologies and the recognition of carbon pricing. The reported outcome did not include recognition of the CCTS. The India-EU free trade agreement, concluded on 27 January 2026, had not been signed by mid-October, and it does not exempt Indian exports from CBAM. Its CBAM annexure, as described by India’s Commerce Ministry, extends to India any future CBAM flexibility and opens a dialogue on India’s carbon price, as our September brief on the annexure sets out.

The UK has gone further. On 27 August 2026 it published a list of 16 overseas carbon pricing schemes that qualify for relief under its CBAM, and the CCTS is on it. The UK CBAM starts on 1 January 2027 and covers aluminium, cement, fertilisers, hydrogen, and iron and steel. Emissions covered by free allowances do not qualify, and relief equals the price actually paid, so until CCTS certificates trade it is worth nothing.

The bill

With no deduction, emissions data is the exporter’s main lever

The importer surrenders certificates for embedded emissions, minus a free allocation adjustment, minus any carbon price deduction. For Indian goods in 2026 the deduction is zero.

The free allocation adjustment (Implementing Regulation (EU) 2025/2620) reflects the free allowances EU producers of the same goods still receive. It uses a CBAM factor of 97.5% in 2026, falling to 51.5% in 2030 and zero from 2034 (Directive (EU) 2023/959), so the adjustment shrinks each year and the exporter cannot change it.

The emissions figure is where exporters have a choice. Default values (Implementing Regulation (EU) 2025/2621) carry a mark-up of 10% in 2026, 20% in 2027 and 30% from 2028, or 1% for fertilisers. Verified actual data removes the mark-up. For a product needing 2.0 certificates per tonne after the adjustment (an illustrative figure), Q3 imports cost €164.64 per tonne in CBAM against €150.56 for Q2.

Timeline

The dates that set the 2026 bill

Exhibit 2 · Key CBAM and CCTS dates for Indian exporters

Sources listed below.

What to do

Four steps before certificate sales open on 1 February 2027

Sources

The 9.4% change and the 2.0-certificate illustration are Climate Decode calculations from the Commission’s published prices. This brief is for information and is not legal or investment advice.