"How the EU's Carbon Border Tax Affects Indian Steel Exports"
CBAM
EU charge on carbon dioxide embedded in imported goods like steel, cement, and fertilisers.
EU Emissions Trading System (ETS)
EU's domestic cap-and-trade carbon market that sets CBAM's certificate price.
Carbon pricing has evolved from cooperative international mechanisms toward unilateral national instruments. The Kyoto Protocol's Clean Development Mechanism (CDM) let developed countries fund emission-reduction projects in developing countries and earn tradeable credits, a cooperative, market-based approach. The Paris Agreement's Article 6 carries this forward, setting out principles for such carbon markets alongside non-market cooperative approaches. The European Union's Carbon Border Adjustment Mechanism (CBAM) breaks from this cooperative model. Instead of buying credits from developing countries, the EU now charges importers directly at its own border, based on the emissions embedded in the goods they bring in.
CBAM is part of the EU's wider decarbonisation push, alongside its target of climate neutrality by 2050 and instruments like the Net-Zero Industry Act, meant to boost the EU's own clean-technology manufacturing. Because CBAM's certificate price tracks the EU's own domestic Emissions Trading System (ETS), understanding CBAM requires understanding how the EU already prices carbon for its own industry before extending that price to imports.
For India, the stakes are concentrated in one sector. Steel accounts for the overwhelming share of India's CBAM-covered exports to the EU, and Indian steelmaking is more carbon-intensive per tonne than the world average, making Indian steel doubly exposed.
CBAM applies from 2026 to six product categories: iron and steel, aluminium, cement, fertilisers, hydrogen, and electricity. Since 2026, EU importers of these goods have had to report embedded carbon dioxide; from February 2027, they must actually purchase certificates covering it, for goods shipped during 2026. Each certificate corresponds to one tonne of carbon dioxide, priced in line with the EU's own carbon market. As the EU phases out free emission permits for its own industry between 2026 and 2034, this certificate price is set to rise steadily.
A crucial safeguard exists in Article 9 of the CBAM regulation: it lets an EU importer subtract any carbon price already paid in the exporting country from what it owes at the border. …
Consider the following pairs:
Terms sometimes seen in the news : Their origin
1.Annex-I Countries : Cartagena Protocol
2.Certified Emissions Reductions : Nagoya Protocol
3.Clean Development Mechanism : Kyoto Protocol
Which of the pairs given above is/are correctly matched?
Consider the following statements:
Statement-I:
Recently, the European Parliament approved The Net-Zero Industry Act.
Statement-II:
The European Union intends to achieve carbon neutrality by 2040 and therefore aims to develop all of its own clean technology by that time.
Which one of the following is correct in respect of the above statements?
Consider the following statements:
Statement I: Article 6 of the Paris Agreement on climate change is frequently discussed in global discussions on sustainable development and climate change.
Statement II: Article 6 of the Paris Agreement on climate change sets out the principles of carbon markets.
Statement III: Article 6 of the Paris Agreement on climate change intends to promote inter-country non-market strategies to reach their climate targets.
Which one of the following is correct in respect of the above statements?
Consider the following statements:
I.Carbon dioxide (CO2) emissions in India are less than 0.5 t CO2/capita.
II.In terms of CO2 emissions from fuel combustion, India ranks second in Asia-Pacific region.
III.Electricity and heat producers are the largest sources of CO2 emissions in India.
Which of the statements given above is/are correct?
Consider the following goods: 1. Iron and steel 2. Aluminium 3. Textiles and garments 4. Cement 5. Fertilisers. How many of the above are covered under the European Union's Carbon Border Adjustment Mechanism (CBAM)?
Consider the following statements regarding India's Carbon Credit Trading Scheme (CCTS): 1. It charges every industrial plant a fixed price for each tonne of carbon dioxide emitted, similar to the EU Emissions Trading System. 2. It sets each plant an emission-intensity limit per unit of output, requiring certificate purchase only for emissions beyond that limit. Which of the statements given above is/are correct?
With reference to Article 9 of the EU's CBAM Regulation, consider the following statements: 1. It allows EU importers to deduct carbon prices already paid in the exporting country from their CBAM certificate liability. 2. It applies automatically regardless of whether the exporting country's carbon-pricing scheme is formally recognised by the EU. Which of the statements given above is/are correct?
The New Delhi Declaration, adopted by BRICS leaders, criticised carbon border adjustment mechanisms as an example of which of the following?
Which of the following steps has the United Kingdom taken with respect to India's domestic carbon-pricing scheme?
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