🗞️ Why in News The Department of Commerce, with the NABCB and EEPC, held an awareness session for around 100 exporters at Vanijya Bhawan, New Delhi, on the EU Carbon Border Adjustment Mechanism (CBAM), on August 19, 2026.
What Was Discussed
CBAM moved from its transitional phase (October 2023-December 2025) to a definitive, certificate-purchase phase from January 2026, requiring importers of carbon-intensive goods into the EU to purchase certificates reflecting the embedded carbon emissions of steel, aluminium, cement, fertiliser, hydrogen and electricity. The certificate price is set quarterly and stood at roughly €75 per tonne of CO2 in Q1 2026.
Why This Matters
India’s steel export carbon intensity exceeds the EU average, commonly cited around 2.1 tCO2 per tonne for India against 1.8 for the EU on a blast-furnace basis, meaning Indian exporters in affected sectors face a real cost disadvantage under CBAM unless domestic decarbonisation accelerates or bilateral carbon-price adjustments are negotiated.
UPSC Relevance
This connects GS3 trade policy with the climate-trade nexus, testing familiarity with the WTO’s Common But Differentiated Responsibilities (CBDR) principle and India’s own Carbon Credit Trading Scheme (CCTS) under the Energy Conservation (Amendment) Act, 2022. A useful Mains angle examines whether unilateral climate-linked trade measures like CBAM are compatible with developing-country trade interests and CBDR.
📌 Facts Corner, Knowledgepedia
EU CBAM, Definitive Phase:
- Transitional phase: October 2023-December 2025; definitive phase: from January 2026
- Certificate price: ~€75/tonne CO2 (Q1 2026, set quarterly)
- Affected sectors: steel, aluminium, cement, fertiliser, hydrogen, electricity
- India’s steel carbon intensity: ~2.1 tCO2/tonne vs EU average ~1.8 (blast-furnace basis)
Other Relevant Facts:
- EU-India Strategic Agenda (September 2025) commits to deducting India’s domestic carbon price from CBAM adjustments
Sources: PIB, Department of Commerce
Source: Commerce Ministry Holds Exporter Awareness Session on EU CBAM's Definitive Phase — Ujiyari.com | Free UPSC & State PCS Current Affairs
