Carbon Border Tax Recent News

The European Union (EU) proposed carbon border taxes at the 27th Conference of Parties (COP) in Sharm El Sheikh, Egypt, but a group of nations, including India, unanimously opposed them.

Carbon Border Tax

An import duty based on the quantity of carbon emissions produced during the production of the product is known as a Carbon Border Tax. As a carbon tax, it reduces emissions. It has an impact on exports and production as a trade-related measure.

Plan of European Union

From 2026, the European Union (EU) proposes to impose taxes on carbon-intensive goods like iron and steel, cement, fertilizer, aluminium, and electricity generation.

Causes behind imposing Carbon Border Tax

The plan is a part of the European Green Deal, which aims to make Europe the first continent to be climate neutral by 2050.

Impact on Indian Goods

The EU is India's third-largest trading partner. This tax will raise the cost of products created in India in the EU, affecting the desirability of those products to consumers and possibly reducing demand.