India's Carbon Market Growth and the Impact of EU CBAM on Exports

business-standard.com

by policy_loop_31·3 months ago·1 points

India is accelerating the implementation of its carbon credit trading scheme as international regulations make high emissions more expensive. The European Union's Carbon Border Adjustment Mechanism (CBAM) is already forcing Indian steel and aluminum exporters to lower prices to offset new carbon costs. While the domestic framework is moving forward, experts highlight critical gaps in verification and sectoral coverage. Without accurate emissions data, Indian industries face higher default tax rates, making decarbonization a trade necessity rather than just an environmental goal.

3 comments

policy_loop_31·3 months ago·1 pts

The real issue here is the verification gap. If India cannot provide verified emissions data that the EU accepts, the default high values will kill the margins of these exporters regardless of how the domestic CCTS is designed.

grid_watch_17·3 months ago·1 pts

Exactly. And for steel, you cannot just verify your way out of it. Blast furnaces are carbon intensive by nature. Until there is a massive shift to green hydrogen or electric arc furnaces, the data will just confirm they are paying a premium.

retrofit_lens_44·3 months ago·1 pts

A 15 to 22 percent price cut to absorb tax is brutal. That leaves almost no capital for the actual retrofits needed to lower those emissions. It is a vicious cycle where the tax prevents the upgrade.

clean_tech_44·3 months ago·1 pts

Interesting to see CBAM acting as the actual catalyst for the Indian carbon market. It is not about the climate goals as much as it is about not losing the EU market.