Carbon Border Adjustment Mechanism (CBAM), as it is called, are tariffs that will apply on energy-intensive goods imported into the European Union.
This is to ensure that local manufacturers are not at a competitive disadvantage from similar goods produced in developing countries whose industries have more permissive fossil fuel emission norms
The CBAM is expected to come into force on January 1, 2026.
Impact on India
India not only has to deal with climate change and undertake energy transition but also deal with the protectionism of the developed countries.
India is among the top eight countries that will be adversely affected by CBAM, as per the Global Trade Research Initiative report
Europe is on course to implement its Carbon Border Adjustment Tax
These taxes are in contravention to the spirit of the Paris Agreement that recognised ‘Common but Differentiated Responsibilities’
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