Imports of steel into the European Economic Area will face a carbon tax under the EU's Carbon Border Adjustment Mechanism (CBAM) starting on January 1. The decarbonisation-oriented levy will also apply to cement, electricity, fertilisers and other products.

Mills in India, the world's second-largest crude steel producer after China, ship roughly two-thirds of their exports to Europe. Most of India's steel is produced in blast furnaces, which generate higher emissions. further expansion of blast furnace capacity is a concern. Additional planned capacity could add about 680 million metric tons of carbon-dioxide-equivalent emissions from the sector, according to Global Energy Monitor, a U.S.-based research group.