Current Affairs » Carbon Border Tax

Carbon Border Tax

A group of countries including India has opposed the carbon border taxes policy.

Table of Content

Why in the News?

The European Union has proposed a policy called the Carbon Border Adjustment Mechanism (CBAM) with effect from 2026.

Key Points:

It aims to tax products such as cement and steel, that are extremely carbon intensive.

Under CBAM, duties will be imposed on imported goods based on the carbon expended in producing them.

Opposition to CBAM

BASIC countries has opposed this policy and called for an unfair shifting of responsibilities from developed to developing countries.
- BASIC is a group constituting Brazil, India, South Africa, and China.
India has jointly stated that carbon border taxes could result in market distortion and aggravate the trust deficit amongst parties and must be avoided.
CBAM will negatively impact the Indian industry which has significant export interests in the EU.

News Source: The Hindu