The EU’s carbon border tax could cost India’s steel exporters far less than expected.
That is the conclusion of a new report by climate think tank Sandbag, released on Tuesday (4 August).
The Carbon Border Adjustment Mechanism (CBAM) requires importers to pay for the carbon emitted in producing goods such as steel and cement.
India, which has a large steel sector, has repeatedly challenged the EU’s carbon border tax at the World Trade Organization, and joined Brazil, China and South Africa in 2021, calling CBAM “discriminatory.”
Sandbag’s modelling suggests that under its “business-as-usual” scenario, the Indian steel sector as a whole would face €762m in CBAM fees in 2034.
But that assumes India’s diverse steel industry is uniformly carbon-intensive which the think tank says is too simplistic.
Under its more realistic “expected” scenario exporters are likely to shift existing low-carbon output toward Europe, which would see gross fees fall to €407m in 2034.
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