Posted on 30 May 2023
The Indian steel ministry is eyeing challenging certain provisions of the EU’s prospective Carbon Border Adjustment Mechanism (CBAM), as the government is concerned about its impact on steel exports from India.
Certain CBAM clauses deviate from World Trade Organisation norms, a steel ministry source informs Kallanish.
"The CBAM regulation is particularly applicable to the iron and steel sector, which is considered a polluting sector," Indian steel secretary Nagendra Nath Sinha recently told local media. "We are concerned about the exports of steel to the European Union that will be impacted due to the regulation."
"To avert any adverse impact, the steel ministry has been discussing with the industry and other stakeholders. There are certain clauses in the CBAM regulation that do not seem to be in line with WTO norms. These will be taken up appropriately by the Government of India," Sinha added.
According to Reuters, during a visit to India last week, European Commission Executive Vice-President for the European Green Deal Frans Timmermans told reporters Indian concerns over CBAM would be resolved bilaterally.
CBAM will initially apply to imports of certain goods whose production is carbon intensive and at the most significant risk of carbon leakage, like cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen. The mechanism will eventually capture more than 50% of the emissions in EU Emissions Trading System (ETS)-covered sectors. It will initially be implemented in a transitional phase starting in October (see Kallanish passim).
During the first transitional phase, importers of steel products in Europe will need to implement a system to report imports to authorities on an annual basis; the first reporting period ends on 31 January 2024. The transitional phase will serve as a preparation period and allow authorities to gather more information to be used in a report review for publication before the definitive system begins in 2026.
Source:Kallanish
