Bills in, signed carbon passport out.
From 2026 an EU importer pays for the carbon in Indian steel. Without supplier data it must use the EU default for India, set on the blast-furnace route with a mark-up. CarbonSetu reads an MSME's own bills and registers, checks them against physics and each other, and issues a passport the buyer can verify. Each supplier's passport flows into its customer's.
Pick a supply chain
Three synthetic MSMEs, one month each, calibrated to the Ministry of Steel roadmap and a CEEW survey of coal-DRI plants. Plant C exports flanges to the EU. Where do its billets come from?
Compare billet suppliers
What Plant C's buyer sees before it chooses: the same flange, priced on each supplier's passport or on the EU default, for the year above.
Documents to data
Plant C's month as photographed on a phone. Each one is read into fields with a confidence and the exact text it was read from: the recorded reads are Claude Opus 5.5 from our eval, "Read live" uses Qwen 3.8 on Groq. GST e-invoices carry a QR signed by the government's invoice portal, which we verify instead of trusting the reading.
What the engine uses
Each value comes from a document. Its tier sets its uncertainty: T2 read with high confidence (±3%), T3 low confidence or handwritten (±8%). Edit any value to see the result move.
Result for one 500 t flange shipment
Checks
What moves the number
Each input pushed up by one standard deviation. Measure the top one better and the band shrinks.
Cost by year, 500 t
Free allocation phases out to 2034 and the default mark-up rises to 30% from 2028. Certificate price held at Q3 2026, €82.32.
Act on it: what to fix first, and how to pay for it
Each step edits Plant C's inputs and the same engine recomputes. The money comes two ways: cash the MSME keeps on fuel and power, and CBAM its EU importer stops paying, which is the MSME's price edge. MSE-GIFT, the last green-loan subsidy for small firms, paid out 8.2% of its budget before it closed in March 2026. Lenders need savings they can verify.
Fix this first
Recuperator: 10% fuel saving, ₹1–4 lakh each (TERI Ludhiana forging cluster study, oil furnaces; low end applied to LPG). LPG ₹148/kg: commercial cylinder, 1 Oct 2026. Power ₹5.90/kVAh: PSPCL large supply, FY2026-27. Weighbridge ₹3.5–5.3 lakh, solar ₹30–50k per kWp and 1,300–1,500 kWh per kWp a year: market quotes. Loan over 5 years at 9.5%, our assumption. ADEETIE (Bureau of Energy Efficiency): 5% interest subvention for 3 years for micro and small firms, 3% for medium, loans from ₹10 lakh for projects that save at least 10% energy.
Quote for an EU buyer
The importer buys the CBAM certificates, so your passport is worth money to them: this is how much more per tonne you could charge than a supplier with no data and still land cheaper.
For the lender
Built only from the four signed passports, verified in your browser: the borrower sends nothing else.
Abroad, sustainability-linked loans step the margin down 5–15 bps for each target met. No Indian MSME product publishes a figure yet, so read that as illustrative.
The carbon passport
An SD-JWT credential (IETF RFC 9901) signed by the verifier. The emissions are always visible. The MSME chooses whether a buyer also sees who, where and how much. Plant C's passport cites Plant B's, which cites Plant A's, by hash.
Share with a buyer
Tick what this buyer may see. Everything else stays hidden but still signed.
What the buyer sees
Follow the chain
Issuer key published at /.well-known/jwt-vc-issuer. The same tokens pass the OpenWallet Foundation reference library (@sd-jwt/sd-jwt-vc) in our test suite.
Double-claim guard
Each passport is logged with the tonnes it covers, and each buyer's claim against it. The verifier signs the log's Merkle root (RFC 9162 hashing) and every buyer keeps a receipt that checks offline: the SCITT pattern of RFC 9943, signed here as a JWS rather than COSE. One low-carbon tonne cannot be sold twice.
Export for the EU importer
The verified passport under the field names of the Commission's CBAM communication template (sheet Summary_Communication, Dec 2024). Not the official file: the importer copies the values into it, or into the O3CI portal, which takes form entry only. Claims not disclosed above stay withheld.
Evidence and method
Extraction eval
Method
| Certificates per tonne | SEEdirect − CBAM factor × benchmark, EU Impl. Reg. 2025/2620; cross-checked against Eurometal's published €254.13/t for Indian HR coil |
| Default for India | Impl. Reg. 2025/2621 Annex I, route C (BF-BOF), +10% in 2026, +20% in 2027, +30% from 2028 |
| Fuel factors | IPCC 2006 Vol 2; coal energy from the invoice GCV, NCV = 0.95 × GCV |
| Electricity | CEA CO2 Baseline Database v20, 0.727 t/MWh (Scope 2 for Singapore buyers; not charged under EU CBAM for steel) |
| Precursors | Supplier passport, scrap at zero, or the EU default when the supplier is unknown |
| Uncertainty | IPCC Approach 2 Monte Carlo, 2,000 draws in your browser; tier sigmas are our stated assumptions |
| Physics floor | 2 Fe2O3 + 3 C → 4 Fe + 3 CO2: a DRI kiln cannot emit under 0.59 t CO2 per t of metallic iron |