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Early signs that the EU carbon border adjustment mechanism is reshaping EU–India steel trade
Open accessAbstract
The EU Carbon Border Adjustment Mechanism (CBAM) aims to level carbon-related costs between domestic and foreign producers to avoid carbon leakage. Although most existing CBAM studies focus on country-level or sector-level aggregates, the policy is applied to individual goods, where emissions performance and trade strategies vary widely across producers. Item-level compliance therefore depends on facility-level characteristics, making firm-level analysis critical to understanding actual exposure and early behavioural adjustments. Here early signals of the CBAM on India’s iron and steel exporters are investigated by integrating firm-level export data with independent estimates of manufacturers’ emissions and production. The analysis reveals that high-emission firms significantly reduced both export quantities and revenues to the EU during the CBAM reporting phase, whereas low-emission firms maintained their export levels. Such supply chain adjustments are in line with EU policy intentions, creating opportunities for low-emission producers while reducing reliance on high-emission suppliers to the EU.
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Metadata
- Authors
- Vriz, G. L., Cojoianu, T., Fischer, C., & Taschini, L.
- Affiliations
- University of Edinburgh (GB)
- European Commission (BE)
- World Bank (US)
- Corresponding author
- Cojoianu, Theodor
- Venue
- Nature Climate Change
- Published
- 2026-06
- Volume
- 16
- Issue
- 6
- Pages
- 737-741
- ISSN
- 1758-678X (ISSN-L)
- 1758-6798
- OpenAlex
- W7163928678
- Cited by
- 7
- References
- 14
- Citations by year
- 2026: 7
- FWCI
- 46.86
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Locations
- Nature Climate Change (publishedVersion, cc-by)
- VU Research Portal (publishedVersion, other-oa)
- Edinburgh Research Explorer (University of Edinburgh) (submittedVersion, cc-by)
- Funders
- UK Research and Innovation (101082081)
- European Commission (101082081)
- European Association of Environmental and Resource Economists
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Social Sciences › Law › EU Law and Policy Analysis
- Keywords
- CBAM, carbon leakage, firm-level emissions, export behaviour, carbon pricing, trade policy
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