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EU’s carbon border tax plans trigger alarm in India

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on Financial Times or enjoy below:

🗞️ Driving the news: The EU's upcoming carbon border tax has raised concerns in India, particularly among heavy industries like steel and aluminum, which rely heavily on coal
• The Carbon Border Adjustment Mechanism (CBAM) will levy duties on carbon-intensive imports, affecting India’s competitive exports to Europe

🔭 The context: India's rapid industrial growth has increased its coal dependency, with demand not expected to peak until the next decade
• The CBAM, set for 2026 implementation, aims to reduce carbon emissions by taxing imports like steel and iron
• Indian authorities are negotiating for exemptions within free trade agreements with the EU and UK

🌍 Why it matters for the planet: The CBAM could accelerate India's transition to greener industrial practices
• However, it highlights the challenge for developing countries balancing economic growth with environmental commitments

⏭️ What's next: India is pushing for carve-outs in trade deals and ramping up domestic green initiatives, including significant investments in renewable energy and green hydrogen production
• The response to CBAM will shape India's industrial and environmental policies in the coming years

💬 One quote: "CBAM is going to act like a non-tariff measure. Indian industry is really going to suffer" — Biswajit Dhar, Indian Institute of Foreign Trade

📈 One stat: Around a quarter of India’s $31 billion exports of steel, iron, and cement in 2022 went to the EU

Click for more news covering the latest on carbon market

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