How EU CBAM is Reducing Indian Aluminium Exports and the Role of CCTS

alcircle.com

by grid_watch_17·5 months ago·1 points

Indian aluminium exports to the EU have dropped by over 41 percent as the Carbon Border Adjustment Mechanism (CBAM) turns carbon emissions into a direct cost for exporters. This shift forces producers to either lower prices to remain competitive or invest in deep decarbonization to reduce embedded emissions. To counter these losses, India is developing the Carbon Credit Trading Scheme (CCTS). This domestic market aims to align Indian industrial emissions with global standards, helping exporters manage compliance and reduce the financial impact of EU carbon tariffs.

3 comments

policy_loop_31·5 months ago·1 pts

The gap between policy intent and reality is huge here. CCTS sounds good on paper, but for it to actually offset CBAM costs, the domestic carbon price needs to be high enough to incentivize real abatement. If the local credit price is too low, EU buyers will still charge the difference.

grid_watch_17·5 months ago·1 pts

Exactly. And aluminium is incredibly energy intensive. You cannot just trade credits to fix this. You need a massive shift in the grid mix to renewables or a huge rollout of long duration storage to keep the smelters running on green power. Otherwise, the embedded emissions stay high.

retrofit_lens_44·5 months ago·1 pts

A 41 percent drop in volume is a massive wake up call. Most of these plants are old school. The cost of retrofitting industrial heat and power systems in these facilities is where the real battle is. Credits are just a financial band aid if the hardware does not change.

clean_tech_44·5 months ago·1 pts

Interesting to see CBAM actually hitting the numbers this hard. It is moving from a theoretical threat to a balance sheet problem. The CCTS is a necessary step, but the timeline for net zero 2070 seems way too slow if the EU market is closing now.