CBAM update – EU and India Join Forces

CBAM update – EU and India Join Forces

CBAM updates EU and India Join Forces On Carbon Border Adjustment Mechanism

The European Union (EU) and India are teaming up on a key environmental initiative: the Carbon Border Adjustment Mechanism (CBAM). In a two-day visit to New Delhi, the EU’s top tax official, Gerassimos Thomas, led discussions on how CBAM will impact both regions.

“My mission was an excellent opportunity to have direct, in-depth, and meaningful interactions with my Indian counterparts and business representatives on a wide range of tax and customs matters, as well as CBAM,” Thomas said.

Thomas explained that CBAM aims to create a fair playing field, ensuring that imported goods from India and elsewhere face the same carbon costs as those produced within the EU.

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This approach is designed to discourage businesses from simply moving production to countries with weaker environmental regulations, a phenomenon known as carbon leakage.

Ultimately, CBAM aims to push industries globally towards reducing their carbon footprint and contribute to worldwide efforts to combat climate change.

The visit highlighted the EU and India’s shared commitment to environmental issues.

Thomas praised India’s plans to green its economy, and both sides emphasized their desire to work together on environmental challenges.

Their discussions focused on smooth implementation of CBAM, ensuring it benefits all parties involved.

Addressing Concerns and Finding Solutions

While CBAM primarily targets larger companies, Thomas recognized potential challenges for smaller Indian businesses (MSMEs).

The visit aimed to understand these concerns and find solutions to ensure a smooth transition for all.

Open communication channels were established through technical meetings with Indian ministries.

These discussions will continue, with a public report on the CBAM transition period due next year. This report will provide an opportunity for further dialogue and feedback from Indian stakeholders.

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Beyond CBAM, the discussions explored other areas of cooperation, including carbon trading markets, pricing mechanisms for carbon emissions, and collaboration on clean technologies like renewables and energy efficiency.

Additionally, tax cooperation featured prominently. Discussions focused on the “Two-Pillar Solution” – an international effort to address tax challenges arising from digitalization. Both sides reaffirmed their commitment to this initiative.

The visit also highlighted the importance of the existing EU-India Customs Cooperation Agreement. Discussions addressed modern challenges like cross-border e-commerce and illegal drug precursors.

Both sides agreed to strengthen cooperation on these issues within the existing framework. This focus on customs cooperation aligns with the ongoing negotiations for a potential EU-India Free Trade Agreement.

Source: Carbon Herald News on 9th July

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