A new report from climate think tank Sandbag suggests that Indian steel exporters may face lower costs under the EU's Carbon Border Adjustment Mechanism than previously anticipated.
Key facts
- •The report by Sandbag was released on Tuesday, August 4.
- •India, along with Brazil, China, and South Africa, labeled the CBAM as 'discriminatory' in 2021.
- •Under a business-as-usual scenario, Indian steel exporters could face €762 million in fees by 2034.
- •Shifting low-carbon output to Europe could reduce projected 2034 fees to €407 million.
- •Factoring in higher prices for cleaner steel could lower the total cost to €79 million by 2034.
A report released Tuesday by the climate think tank Sandbag indicates that the EU's Carbon Border Adjustment Mechanism (CBAM) may impose significantly lower costs on India's steel sector than initial projections suggested. The CBAM requires importers to pay for carbon emissions associated with the production of goods like steel and cement, a policy that India has previously challenged at the World Trade Organization.
By the numbers
Projected Costs and Scenarios
Sandbag's modeling presents different outcomes based on industry behavior. Under a 'business-as-usual' scenario, the Indian steel sector could face €762 million in CBAM fees by 2034. However, the report notes that this assumes the industry is uniformly carbon-intensive, which the think tank describes as too simplistic. In a more realistic 'expected' scenario, where exporters shift existing low-carbon production toward the European market, gross fees are projected to drop to €407 million in 2034. When factoring in higher market prices for cleaner steel, Sandbag estimates the total costs could fall to €79 million by 2034.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by EUobserver.
