EU carbon border tax may hit India’s steel sector less hard than expected, study finds

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.