India’s Vedanta Aluminum has its plan ready to tackle EU’s CBAM challenge

As part of global efforts to combat climate change, the European Union has introduced an important measure: the Carbon Border Adjustment Mechanism (CBAM), designed to regulate the importation of carbon-intensive products, such as aluminum, by imposing a customs duty based on the emissions produced during their manufacture.

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This tariff currently applies to six categories of products – aluminum, iron and steel, hydrogen, electricity, cement and fertilizers, regardless of the origin of the product.

The CBAM is expected to come into force in January 2026. In preparation, the European Union has already started requesting reports on carbon emissions from goods exported to the EU.

India’s leading stainless steel producer, Jindal Stainless Limited, is taking proactive steps to reduce its carbon emissions and maintain its competitiveness in the European Union export market. Similarly, Vedanta Aluminum is also making significant efforts to comply with CBAM requirements and reduce its carbon footprint.

Abhyuday Jindal, MD, Jindal Stainless told Business Today, “We have been vigilant about our carbon footprint long before CBAM came into the picture. We started moving from thermal energy sources to renewable energy sources – wind, solar and hydroelectric – a long time ago. Recognizing the challenges associated with decarbonizing the stainless steel industry, we have launched India’s first green hydrogen plant in the stainless steel sector, which will reduce carbon emissions by 2,700 tCO2e per year . Additionally, we are transitioning to electric vehicle fleets, switching to energy-efficient equipment, and integrating the use of biofuels as part of our decarbonization efforts.

As the CBAM also applies to aluminum, Vedanta Aluminum files its Scope 1 emissions reports in accordance with the CBAM requirements. According to Vedanta’s report, the company is gradually reducing greenhouse gas intensity through conscious efforts such as inclusion of renewable energy in the energy mix, expanding the use of biofuels for fusion of aluminum and the deployment of India’s largest fleet of electric forklifts across its operations.

John Slaven, CEO of Vedanta Aluminum, told Business Today: “We are focused on further diversifying our energy portfolio through the increased use of renewable energy (RE) and sustainable alternatives such as biofuels. To achieve this objective, we have entered into long-term electricity delivery agreements to provide an initial quantity of 1,335 MW of renewable energy. This will include a mix of solar and wind power, which together will help power Vedanta Aluminum’s operations in Odisha and Chhattisgarh. This will also result in a reduction in GHG emissions of approximately 3.2 million tonnes of CO2 per year, significantly contributing to our decarbonization efforts. Additionally, we will deploy new innovative process technologies to decarbonize the value chain as they become available to the market.

Beyond Scope 1 emissions, Vedanta offers low-carbon aluminum products like Restora and Restora ULTRA. John Slaven said Vedanta would continue to meet the European Union’s growing demand for low-carbon primary products with Restora and Restora ULTRA, because even today the EU is willing to pay a modest premium for low carbon products.

Jindal Stainless and Vedanta Aluminum are committed to achieving net zero emissions by 2050 and are actively working to reduce their carbon emissions.