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【Ferro-alloys.com】:The Indian government is working on a mechanism through which it can offer reliefs for domestic steel exporters to

European Union (EU) to compensate for the impact of the EU's proposed carbon border adjustment mechanism (CBAM), government sources said on Wednesday, December 27.

The sources said that various tools were being considered to reimburse Indian steel exporters to the EU, for the higher costs resulting from the CBAM, and to ensure the competitiveness of steel exports in the critical market. Extensive consultations and studies are ongoing to finalize a mechanism to offset the higher costs for exports of steel to the EU and at the same time ensure that such a mechanism is WTO compliant, the sources said.

The CBAM has been put into play in the EU from October 1, 2023, with carbon emissions reporting requirements on imports at its borders. But the EU will impose the actual tax from 2026. The period between 2023 to 2026 is known as the transition time.

India has already challenged the carbon tax at the WTO as it believes the CBAM is in violation of special and differential treatment (SNDT)provisions of the WTO that advocate longer time periods for implementing agreements and commitments for developing nations, to safeguard the trade interests of developing countries.

• [Editor:Alakay]