On 7 November 2025, India and the European Union concluded another round of Free Trade Agreement discussions. One of the key agenda points was the Carbon Border Adjustment Mechanism, or CBAM, which is the European Union’s plan to tax imports based on their carbon emissions.
While the current framework covers steel, aluminium, cement, electricity, and hydrogen, industry experts believe that ferro alloys like silico manganese may also come under its influence in the future. Silico manganese is an essential ingredient in steelmaking. It strengthens steel and removes oxygen during production. Even though it is not directly under CBAM yet, its demand and pricing are closely linked to steel exports, making the policy significant for Indian alloy producers.
Understanding CBAM in Simple Terms
| Parameter | Details |
|---|---|
| Objective | To create a level playing field by imposing a carbon cost on imports that have higher emissions than European Union standards |
| Timeline | Reporting phase began in 2023 with full implementation expected by 2026 |
| Covered Sectors | Iron, steel, aluminium, cement, hydrogen, electricity |
| Future Scope | May include ferro alloys and other intermediate materials |
CBAM aims to prevent carbon leakage, a situation where industries move to countries with lenient environmental rules to avoid emission costs. This means products made with higher carbon emissions could face an additional import charge when entering the European Union.
Why Silico Manganese is Connected
• Silico manganese is a key input in the production of almost all types of steel made in India.
• Since CBAM focuses on the carbon footprint of imported steel, the raw materials used to produce that steel, such as silico manganese, will also be indirectly affected.
• European buyers may soon start asking Indian exporters for information on the carbon intensity of alloys used in steel production.
• Over time, alloy producers may need to track and report emissions data to remain competitive in export markets.
Impact on India’s Silico Manganese Industry
| Factor | Effect | Implication |
|---|---|---|
| Carbon related tariffs on steel | Creates indirect pressure on the supply chain | Alloy producers may face reporting or compliance costs |
| European preference for low emission sourcing | Favors producers using cleaner energy | Encourages transition to renewable power |
| Global demand trends | Movement toward traceable certified materials | Exporters must improve monitoring and transparency |
| Domestic steel production | Likely to remain steady | Provides stability even if export demand fluctuates |
Industry View and Preparedness
• The Indian Ferro Alloys Producers Association has requested that the government include ferro alloys in India’s green manufacturing roadmap.
• The National Green Steel Mission can be expanded to include alloy producers, offering them access to incentives for clean energy and energy efficiency.
• Many small and medium producers still depend on captive coal-based power which makes their emission intensity higher than global peers. Gradually switching to solar, wind, or hydropower could help improve export readiness.
• Platforms like Markintel, supported by MetalXperts, can play an important role by promoting verified suppliers, transparent pricing, and data-driven market intelligence for sustainable sourcing.
The Opportunity Ahead
• CBAM is not only a challenge but also an opportunity to modernize the ferro alloy industry.
• Producers who invest in energy efficient furnaces, waste heat recovery, and renewable power integration will be future ready.
• India’s natural advantages such as abundant manganese ore reserves and growing renewable capacity can position it as a low carbon alloy supplier for Asia and Europe.
• Buyers across global markets are now looking for sustainable sourcing and early movers can secure long-term contracts in premium markets.
Conclusion
CBAM may appear to focus on steel, but its influence extends across the entire metal value chain, including silico manganese. The mechanism is reshaping how trade values energy efficiency and carbon responsibility. For India’s alloy sector, this is both a challenge and an opportunity. Those who adapt early through cleaner energy, efficient production, and transparent reporting will lead India’s position in sustainable global trade.
Source References:
Economic Times, “EU FTA Talks Over; Clarity Sought on CBAM and Steel Rules,” 7 November 2025
European Commission CBAM Implementation Update, October 2025
IFAPA Industry Notes, October 2025
BigMint Alloy Market Data, November 2025
Disclaimer: Data and insights presented in this article are compiled from publicly available government and industry sources including the European Commission, IFAPA, and BigMint. Markintel has independently analyzed and interpreted this information for research and educational purposes; it does not represent the official views of any cited organization.
