India Forms Committee to Review Challenges for Emission Calculation as per EU's CBAM

India has formed a committee to review the existing methodologies and frameworks of monitoring, reporting and verification (MRV) of embedded emission in the European Union's Carbon Border Adjustment Mechanism (CBAM), as reported by Economic Times.

Officials, as cited in the report, said that the committee will include industry members and ministries such as commerce and industry, steel and power. "There is a pressing need to address the technical aspects and challenges of CBAM and safeguard India's interests in the global carbon regulatory landscape," one of the official told ET. 

The committee will identify, develop and recommend solutions to the Bureau of Energy Efficiency. It will also identify gaps in present practices and propose alternative methodologies that meet CBAM standards, according to the report.

Also Read: Will the EU’s New Green Regulations Punish Indian MSMEs?

CBAM's Blow to India

CBAM came into effect on October 1, 2023. It levies a tariff on carbon-intensive products that are imported to the European Union (EU). The regulation aims to align prices of imported goods with those produced in the EU and control “carbon leakage”, which involves companies transferring production to jurisdictions with less strict emissions policies.

India has strongly criticised the regulation. Earlier this month, Finance Minister Nirmala Sitharaman termed CBAM as “unilateral” and “arbitrary” measures that will hurt countries like India and stifle economic growth as well as green energy transition goals.

“CBAM relies on extensive data inputs and emissions tracing. Indian MSMEs [micro-, small- and medium-enterprises] lack training for these processes. Therefore, India should proactively build an ecosystem to enhance MSME capacities and develop supportive policy frameworks for CBAM MRV [monitoring, reporting and verification] challenges,” Aparna Sharma, programme lead, CEEW told Outlook Business earlier.

European Union is an important market for India. A 2022 report by Council on Energy, Environment and Water said CBAM could impact nearly 43 per cent of India’s exports to the EU, worth $37bn. More than one-fourth of India’s exports of iron, steel and aluminium are to the EU, according to industry estimates. These are all hard-to-abate sectors and CBAM compliance can raise the cost of exports by 20–35 per cent.