{"id":243911,"date":"2023-05-24T20:05:43","date_gmt":"2023-05-24T14:35:43","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=243911"},"modified":"2023-05-24T20:06:08","modified_gmt":"2023-05-24T14:36:08","slug":"what-is-the-eus-carbon-border-adjustment-mechanism","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/what-is-the-eus-carbon-border-adjustment-mechanism\/","title":{"rendered":"What is the EU\u2019s carbon border adjustment mechanism?"},"content":{"rendered":"\n

Source: <\/b>The post is based on the article<\/span> \u201c<\/b>What is the EU\u2019s carbon border adjustment mechanism?<\/b>\u201d <\/b>published in<\/span> The Hindu <\/b>on 24th May 2023<\/b><\/p>\n

What is the News?<\/b><\/h2>\n

The <\/span>co-legislators at the European Commission signed the Carbon Border Adjustment Mechanism (CBAM).<\/span><\/p>\n

What is Carbon Border Adjustment Mechanism (CBAM)?<\/b><\/h2>\n

CBAM has been described as a landmark tool to put a fair price on the carbon emitted during the production of carbon-intensive goods that are entering the EU and to encourage cleaner industrial production in non-EU countries.<\/span><\/p>\n

Objective: <\/b>Its primary objective is to avert <\/span>\u2018carbon leakage<\/b>\u2019. Carbon leakage occurs when companies based in the EU move carbon-intensive production abroad to countries where less stringent climate policies are in place than in the EU or when EU products get replaced by more carbon-intensive imports.<\/span><\/p>\n

Key Provisions: <\/b>From 2026, once the CBAM is fully implemented, importers in the EU would have to buy carbon certificates corresponding to the payable carbon price of the import had the product been produced in the EU under its carbon pricing rules.\u00a0<\/span><\/p>\n

\u2013 Conversely, if a non-EU producer is paying a price (or tax) for carbon used to produce the imported goods, back home or in some other country, the corresponding cost would be deducted for the EU importer.\u00a0<\/span><\/p>\n

\u2013 Importers would have to annually declare by May-end the quantity and embedded emissions in the goods imported into the region in the preceding year.<\/span><\/p>\n

Sectors covered:<\/b> CBAM <\/span>would initially apply to imports of certain goods and selected precursors, whose production is carbon-intensive and are at risk of \u2018leakage\u2019 such as the cement, iron and steel, aluminium, fertilizers, electricity and hydrogen sectors.<\/span><\/p>\n\n\n\n
Must read: Common Border Adjustment Mechanism<\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

What would be the impact on other countries due to the EU’s CBAM?<\/b><\/h2>\n

In 2021, the United Nations Conference on Trade and Development (UNCTAD) had concluded that Russia, China and Turkey were most exposed to the mechanism.<\/span><\/p>\n

India, Brazil and South Africa would be most affected among the developing countries<\/a>. Mozambique would be the most exposed least-developing country.<\/span><\/p>\n

Note:<\/b> EU as a whole represents about 14% of India\u2019s export mix for all products, steel and aluminium included.<\/span><\/em><\/p>\n

What would be the impact on India?<\/b><\/h2>\n

India\u2019s exports in the five segments covered under CBAM represent less than 2% of the total exports to the EU between 2019 and 2021. However, its long-term effects can be severe for multiple factors:\u00a0<\/span><\/p>\n

Firstly, <\/b>the EU being India\u2019s third-largest trade partner and given the latter\u2019s projected growth trajectories, the size of exports (including in the CBAM sectors) will invariably rise.\u00a0<\/span><\/p>\n

Secondly<\/b>, CBAM\u2019s scope would expand beyond its current ambit to include other sectors as well.\u00a0<\/span><\/p>\n

Thirdly<\/b>, international climate policies (including CBAM) will compel other countries to impose similar regulations eventually translating to \u201ca significant impact\u201d on India\u2019s trading relationships and balance of payments.<\/span><\/p>\n\n\n\n
Read more: A multi-pronged counter is warranted to tackle the EU\u2019s carbon tax plans<\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article \u201cWhat is the EU\u2019s carbon border adjustment mechanism?\u201d published in The Hindu on 24th May 2023 What is the News? The co-legislators at the European Commission signed the Carbon Border Adjustment Mechanism (CBAM). What is Carbon Border Adjustment Mechanism (CBAM)? CBAM has been described as a landmark… Continue reading What is the EU\u2019s carbon border adjustment mechanism?<\/span><\/a><\/p>\n","protected":false},"author":10317,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,164,9],"tags":[10498],"class_list":["post-243911","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-international-relations-daily-factly-articles","category-public","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/243911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10317"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=243911"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/243911\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=243911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=243911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=243911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}