CBAM Product Classification: Which HS Codes Are Covered, What Is Excluded, and the Common Errors Indian Exporters Make
CBAM does not cover all steel, all aluminium, or all fertilisers. It covers specific goods under defined EU Combined Nomenclature codes in Annex I of the CBAM Regulation. Misclassification leads to either unnecessary compliance cost or regulatory violation. This is the practical classification guide every CBAM compliance officer needs before their first declaration.
Key Takeaways
- CBAM covers goods listed in Annex I of Regulation (EU) 2023/956, defined by EU Combined Nomenclature (CN) codes. CN codes are the EU’s 8-digit tariff classification system, derived from the international Harmonised System (HS) at 6-digit level. Indian exporters must match their ITC (HS) codes — India’s export classification system — against the EU’s CN codes to determine CBAM applicability. The two systems are equivalent at the first 6 digits (HS level) but may differ at 7-8 digit level for product sub-categories.
- For steel (Annex I, Section 1), CBAM covers iron and steel products under HS Chapter 72 — including pig iron, ferroalloys, iron and non-alloy steel in primary forms, flat-rolled products, bars and rods, wire, and tubes and pipes. Stainless steel (most sub-headings of 7219–7222) is included. Notably excluded are: downstream fabricated products such as steel structures (Chapter 73 items including bolts, screws, and fasteners), hand tools (Chapter 82), and industrial machinery with steel components. The 2028 downstream review may include Chapter 73 products, but they are outside the current Annex I scope.
- For aluminium (Annex I, Section 3), CBAM covers unwrought aluminium, aluminium powders and flakes, aluminium bars and rods, aluminium wire, aluminium plates and strips, aluminium foil, and aluminium tubes and pipes. Covered CN codes include 7601, 7603, 7604, 7605, 7606, 7607, 7608, 7609, 7610, 7611, 7612, 7613, 7614, and 7616. Excluded are: aluminium articles classified in Chapter 76 sub-headings above 7616 (such as aluminium reservoirs above 300 litre capacity for industrial use), many fabricated aluminium products in Chapters 83 and 84, and aluminium-containing products in other HS chapters (such as aluminium wire in electrical cables, Chapter 85).
- For fertilisers (Annex I, Section 4), CBAM covers nitric acid and sulphonitric acids (2808), ammonia, anhydrous or in aqueous solution (2814), nitrous oxide (2811), and specific nitrogenous fertilisers under Chapter 31 — ammonium nitrate (3102 30), mixtures of ammonium nitrate with calcium carbonate (3102 40), urea (3102 10), and mixed nitrogen-phosphorus-potassium fertilisers (various sub-headings under 3105). Covered is NOT all of Chapter 31 — many phosphatic and potassic fertilisers are excluded. Potassium chloride (3104) is excluded. Single superphosphate (3103) is excluded.
- The most common classification error Indian steel exporters make is including Chapter 73 products — steel structures, storage tanks, pipes and fittings, chains, and hand tools — in their CBAM compliance programme when these are not in Annex I. The second most common error is excluding stainless steel flat products (7219–7222) from CBAM monitoring, assuming that “stainless steel” is treated differently from carbon steel. It is not — stainless steel is included in Annex I. The third common error is confusing product classification with emission methodology — getting the CN code right does not automatically determine the correct calculation methodology for embedded emissions.
- The 2028 downstream expansion review — mandated in Article 30 of the CBAM Regulation — will consider expanding CBAM to downstream steel products in Chapter 73 including bolts, screws, structural steel components, and possibly mechanical auto components. Indian exporters of fasteners, structural steel, and auto components should begin emissions data collection now as if CBAM applied — because the 2028 review timeline means those products could be covered by 2030, and establishing the MRV infrastructure in 2026 is far cheaper than scrambling to establish it in 2029.
CBAM applies to specific goods imported into the European Union — not to broad commodity categories. The precision of the product coverage is one of the most practically important but least well-understood aspects of CBAM compliance for Indian exporters. An Indian steel company that exports 50 different product categories to the EU may find that 20 of them fall within Annex I of the CBAM Regulation and 30 do not. Getting the classification right at the product level — not at the sector level — is the starting point for any CBAM compliance programme.
India’s export classification system, the ITC (HS) Schedule, uses the same 6-digit HS code structure as the EU’s Combined Nomenclature at the heading level. For most CBAM-relevant product categories, the ITC-HS code and the CN code are equivalent through the first 6 digits — the differences appear at the 7th and 8th digit where the EU’s tariff classification introduces additional sub-categories. The practical exercise for Indian compliance officers is to map each export product code from the Indian customs entry against the Annex I CN code list, and for products in the 6-digit HS range covered by Annex I, verify whether the specific 8-digit CN sub-heading is included or excluded.
Steel: the Annex I coverage in detail
CBAM Annex I Coverage — Steel and Iron Products · Key HS/CN Headings
| HS Chapter/Heading | Product Description | CBAM Status | Indian Export Relevance |
|---|---|---|---|
| 7201 | Pig iron and spiegeleisen in pigs, blocks or other primary forms | Covered | RINL, SAIL pig iron exports |
| 7202 | Ferro-alloys (ferro-manganese, ferro-silicon, ferro-chromium etc.) | Covered | IMFA, Tata Steel ferro-alloys |
| 7206–7207 | Iron and non-alloy steel in ingots and semi-finished forms (billets, blooms, slabs) | Covered | JSW, SAIL, Tata Steel slab/billet exports |
| 7208–7212 | Flat-rolled products of iron or non-alloy steel (HRC, CRC, coated) | Covered | JSW, SAIL HRC/CRC — major CBAM exposure |
| 7213–7215 | Bars and rods of iron or non-alloy steel | Covered | TMT bars, wire rods — construction steel exports |
| 7216 | Angles, shapes and sections of iron or non-alloy steel | Covered | Structural sections |
| 7217 | Wire of iron or non-alloy steel | Covered | Wire products |
| 7219–7222 | Flat-rolled, bars and rods of stainless steel | Covered | Jindal Stainless, Chromeni stainless exports |
| 7228 | Other bars and rods of alloy steel; hollow drill bars | Covered | Alloy steel bars |
| 7301–7326 (Chapter 73) | Articles of iron and steel — structures, tanks, barbed wire, chain, bolts, screws, springs | Excluded from Phase 1 | Major Indian fastener and structure exporters — watch 2028 review |
| 7304–7306 | Tubes and pipes of iron or steel | Covered (selected CN codes) | JSSL, Tata Steel tubes |
The three most common classification errors
Error one: including Chapter 73 fabricated steel products in CBAM compliance. The most common misunderstanding among Indian exporters is the assumption that if a product contains steel, it is covered by CBAM. This is incorrect. CBAM covers steel as a material — the intermediate and primary products of steel manufacturing listed in Annex I. It does not cover products manufactured from steel — bolts, screws, locks, hinges, springs, structural steel assemblies, storage tanks, and hand tools that classify in Chapter 73. An Indian fastener exporter sending bolts under CN code 7318 to the EU has no CBAM obligation under current Phase 1 rules. Including those products in a CBAM compliance programme creates unnecessary cost and may create incorrect declarations. The 2028 downstream review may change this — but the current position is unambiguous.
Error two: excluding stainless steel from CBAM monitoring. Several Indian CBAM compliance programmes reviewed by trade consultants have incorrectly treated stainless steel as a separate product category outside the CBAM perimeter, on the assumption that CBAM targets carbon-intensive production and stainless steel has different process chemistry. This is incorrect. Annex I explicitly includes flat-rolled products, bars, rods, and wire of stainless steel under CN headings 7219 to 7222. Stainless steel producers face CBAM obligations on their EU exports, and the embedded emission calculation must cover the chromium and nickel inputs as precursor materials alongside the iron and steel emissions. The emission intensity of stainless steel EAF production is generally lower than BF-BOF carbon steel, but it is not excluded.
Error three: confusing product classification with emission calculation methodology. Establishing the correct CN code for a product determines whether CBAM applies — it does not determine the correct methodology for calculating embedded emissions. Some Indian exporters have used the CN code determination as the only step in their CBAM classification exercise and then assumed that the default value published by the European Commission for that product category applies automatically. Default values may legally be used in the transitional period (which ended December 2024 for most products) but may not be used in the definitive period for the annual CBAM declaration due September 2027. The definitive period requires actual verified embedded emissions from plant-level monitoring data — a separate exercise from product classification entirely.
The 2028 downstream review and why Indian fastener exporters should prepare now. India is the world’s largest exporter of fasteners — bolts, screws, and similar articles classified in HS 7318. Total Indian fastener exports to the EU are approximately $800 million to $1 billion per year. Under current CBAM Phase 1 rules (Annex I), fasteners are excluded because they fall in Chapter 73 rather than Chapter 72. Article 30 of the CBAM Regulation mandates a Commission review of scope expansion to downstream products — including Chapter 73 — by 2028, with potential extension of coverage by 2030. If Chapter 73 is included from 2030, Indian fastener exporters face CBAM liability retroactively timed to when their EU customers begin the declaration cycle. Establishing MRV infrastructure for the embedded steel emission content of fasteners now — while it is technically not required — reduces the compliance implementation cost by approximately 60 percent when the obligation arrives.
Frequently Asked Questions
Where can Indian exporters find the official list of CBAM-covered CN codes?
Annex I of Regulation (EU) 2023/956 (the CBAM Regulation) contains the definitive list of covered goods by EU Combined Nomenclature code. The text of the regulation is publicly available on the EU’s EUR-Lex database at eur-lex.europa.eu. The European Commission also maintains a CBAM product scope guidance document that maps CN codes to the relevant product categories with explanatory notes. The CBAM Registry portal at cbam.ec.europa.eu requires authorised declarants to select the CN code for each shipment when filing CBAM reports.
How do Indian ITC-HS codes map to EU CN codes for CBAM purposes?
ITC-HS codes and EU CN codes are both derived from the international Harmonised System and are identical at the first 6 digits (the HS heading and sub-heading level). CBAM’s Annex I lists 8-digit CN codes — the EU’s additional 2-digit national classification level. For most CBAM-relevant steel and aluminium products, the 6-digit HS match is sufficient to determine CBAM applicability because the product descriptions at that level align. For fertilisers and some specialty steel products, the 8-digit CN classification may differ from the 8-digit ITC-HS, and exporters should verify with their Indian customs broker and their EU customer’s customs broker to ensure the correct CN code is used in the CBAM declaration.
Do re-exported goods — Indian steel processed in a third country before reaching the EU — attract CBAM?
CBAM applies at the point of import into the EU customs territory. The relevant question is whether the goods entering the EU are classified within Annex I at the time of EU import. If Indian steel is exported to a third country, processed significantly (changing HS classification, for example from billets to tubes), and then exported to the EU, the CBAM applicability depends on the classification of the final product entering the EU — not the original Indian steel classification. If the processing creates a product that is still within Annex I, CBAM applies. If the processing creates a product in Chapter 73 or another non-covered chapter, CBAM does not apply under current rules. This is the “substantial transformation” question that CBAM implementing regulations address through the rules of origin framework.
Sources
- European Commission — Regulation (EU) 2023/956 — CBAM Regulation including Annex I product list
- European Commission — CBAM product scope guidance — CN code classification notes
- CBAM Registry — EU CBAM declarant portal — CN code selection and declaration framework
- Directorate General of Foreign Trade — ITC-HS Schedule — India’s export classification system
- European Commission — CBAM Implementing Regulation 2023/1773 — definitional phase guidance on embedded emissions methodology
Related Reclimatize.in Research
CBAM and Its Impact on Indian Industry — Overview How CBAM Works: A Practical Guide for Exporters CBAM Compliance Operations for Indian Steel Exporters: MRV and Embedded Emissions Guide CBAM Downstream Expansion 2028: What India Must Do Now CBAM and Indian Steel: What the Carbon Levy Actually Costs CBAM and Indian Aluminium: Scope 2 Electricity Exposure