CBAM Stands Firm as India-EU FTA Advances: No Exceptions Allowed

The European Union's Carbon Border Adjustment Mechanism (CBAM), a pivotal aspect of the newly concluded India-EU Free Trade Agreement (FTA), remains uncompromising with no exceptions for any country, according to a top German environment official.

Jochen Flasbarth, State Secretary in the German Ministry for the Environment, emphasized that CBAM is not intended to target any specific nation but is a requisite protective measure alongside domestic carbon pricing initiatives. Despite India's concerns about carbon-intensive exports like steel facing extra charges, Flasbarth reassured that technical discussions would soon be underway to find optimal solutions.

The CBAM, set to fully phase in by January 2026, imposes tariffs on embedded carbon emissions in key import sectors, which poses challenges for India amidst its ongoing trade dynamics. Meanwhile, the FTA highlights a need for collaboration on carbon pricing and emission trading systems between the EU and India.