Under the Carbon Border Adjustment Mechanism (CBAM), the EU will tax imports based on the carbon emissions generated during production. In Europe, companies pay for their emissions under the EU Emissions Trading System. CBAM liability is calculated using two factors: The amount of carbon emissions generated during production and the EU carbon price, currently around €80 per tonne of CO2. But since India does not have a nationwide carbon tax, Indian exporters must pay the full CBAM charge unless special exemptions are agreed later. At an EU carbon price of €80, this equals €192 per tonne in CBAM costs.

Source: Indian Express January 02, 2026 01:40 UTC