Context
The Department of Commerce organised an awareness session to prepare Indian exporters for the EU’s Carbon Border Adjustment Mechanism (CBAM). Meanwhile, BRICS Environment Ministers opposed CBAM as a unilateral and discriminatory trade measure and reiterated the principles of climate equity and CBDR-RC.
Explanation
- CBAM is the EU mechanism that imposes a carbon price on specified carbon-intensive imports, linking trade with the embedded emissions generated during production.
- It aims to prevent carbon leakage, where production shifts to countries with less stringent climate policies.
- Key covered sectors include iron & steel, aluminium, cement, fertilisers, electricity and hydrogen.
- The transitional phase began in October 2023, requiring emissions reporting; the definitive regime started in 2026, involving CBAM certificates.
- Indian exporters therefore require reliable emissions accounting, accreditation, verification and reporting systems.
- Developing countries have raised concerns over protectionism, WTO compatibility and climate equity.
- BRICS invokes CBDR-RC, a principle under the UNFCCC and Paris Agreement, recognising differences in countries’ historical responsibilities and capabilities.
- NABCB provides accreditation, while EEPC India promotes engineering exports.
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