Posted on 08 Nov 2023
India will not accept any unfair taxes or levies on steel that are imposed by the EU under the Carbon Border Adjustment Mechanism (CBAM), commerce minister Piyush Goyal said during the Indian Steel Association's Steel Conclave 2023.
"We have taken it up with the EU. We are taking it up with the World Trade Organisation (WTO) very, very seriously," Goyal said on 7 November. "We shall be trying to work and get a fair deal for Indian producers and exporters."
The EU's CBAM has entered a transitional phase, with importers having to collect fourth-quarter greenhouse gas emissions (GHG) data from 1 October 2023 and submit a first report by 31 January 2024.
Once the permanent system is in force on 1 January 2026, importers will need to declare the quantity of goods imported into the EU in the preceding year and their embedded GHGs. They will then surrender the corresponding number of CBAM certificates, whose price will be calculated based on the weekly average auction price of EU Emissions Trading System allowances, expressed in €/t of carbon dioxide emitted.
But Indian steel producers have raised concerns about the bloc's carbon tax, as they said it is unfair on developing countries to follow the same carbon emissions measures as developed countries.
"The capacity which are getting built in will need a market abroad also and so the discussion over CBAM is as much about volumes as about the very principle of decarbonisation," the chairman of state-controlled producer Steel Authority of India Amarendu Prakash told Argus on the sidelines of the conclave.
"Different mechanisms of charging for climate has to be based on a differentiated scale, taking into account the countries, status and the phases in which different parts of the world are" Prakash said.
The EU was the top finished steel export destination for Indian steel producers during the April 2022-March 2023 fiscal year with total exports of 2.34mn t. It has been the main destination for Indian steel exports in the current fiscal year because of higher prices compared with other regions.
Different countries should get together and address the "serious issue of CBAM" collectively, Goyal said, but did not name any countries it plans to team up with in opposing CBAM at the WTO.
Italian steel and scrap association Assofermet criticised the CBAM last month, saying it will undermine the competitiveness of EU manufacturing.
Source:Argus Media
