{"id":1171,"date":"2023-04-18T00:00:00","date_gmt":"2023-04-18T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/18-04-2023\/preparing-industry-for-carbon-border-tax\/"},"modified":"2025-07-18T11:21:52","modified_gmt":"2025-07-18T05:51:52","slug":"preparing-industry-for-carbon-border-tax","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/editorial-analysis\/18-04-2023\/preparing-industry-for-carbon-border-tax","title":{"rendered":"Preparing industry for Carbon Border Tax"},"content":{"rendered":"<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>In Context<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The EU, the UK, Canada, Japan, the US and others are bracing up to levy CBT on imports.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>About Carbon Border Adjustment Tax<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>About:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>The European Union<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> has proposed a policy called the Carbon Border Adjustment Mechanism (CBAM) to <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>tax products<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> such as<\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong> cement and steel <\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">that are <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>extremely carbon intensive<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">, with effect from 2026.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">It is a <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>duty on imports<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> based on the<\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong> amount of carbon emissions<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> resulting from the production of the product in question.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Significance:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Discouraging emissions:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:square\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">As a price on carbon, it discourages emissions. As a trade-related measure, it affects production and exports.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:square\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The EU claims to be <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>concerned with the relocation of production<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> to countries with<\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong> less ambitious climate policies<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">, undermining EU\u2019s and global climate objectives.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>The CBAM also has an economic driver.\u00a0<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:square\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">By &#8216;equalizing&#8217; the price of carbon between domestic products and imports, the EU claims to <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>promote fair competition<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">, levelling the playing field<\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong> between EU and non-EU businesses<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>How would the CBAM work?<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">If implemented as planned,<\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong> EU importers<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> will have to buy<\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong> carbon certificates<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>corresponding to the carbon price<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> that would have been paid in the EU, if the goods had been produced locally.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The<\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong> price of the certificates<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> would be calculated according to the auction prices in the EU carbon credit market.\u00a0<\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:square\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The amount of certificates required would be <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>defined yearly <\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">by the quantity of goods and the embedded emissions in those goods imported into the EU.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The CBAM would initially apply to imports of <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>cement, iron and steel, aluminium, fertilizers <\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">and <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>electricity<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>UK proposes levying CBT<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> on cement, chemicals, glass, iron and steel, non-ferrous metals, non-metallic minerals, paper and pulp, fertiliser, and power generation.\u00a0<\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:square\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The list will gradually expand to cover all products by 2034.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>Opponents<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>BASIC Group:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>BASIC, <\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">a group constituting <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Brazil, India, South Africa and China<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">, and therefore large economies that are significantly dependent on coal, has for several years voiced common concerns and reiterated their right to use fossil fuel in the interim during their countries\u2019 eventual transformation to clean energy sources.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>At COP27<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> BASIC group <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>opposed the \u2018carbon border tax\u2019.<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:square\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">They have jointly stated that carbon border taxes, that could result in market distortion and aggravate the trust deficit amongst parties, must be avoided.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">According to few other experts, <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Carbon Tax is unjust<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">.\u00a0<\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">CBT may not help in reducing pollution as there is no focus on lowering wasteful <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>consumption<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>Preparing industry for Carbon Border Tax<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Minimising Impact:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">CBT will affect lakhs of small and big firms. Indian exporters <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>must factor in CBT into their costing<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> and prepare to minimise its impact.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Focusing on greener production options:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The rate of CBT depends on how much carbon has been emitted during production to make the export product.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">So, there is a need to explore greener production options for production of the concerned commodities. For Example,\u00a0<\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:square\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Steel:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Steel made from a <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>blast furnace route<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> emits more carbon dioxide and may attract higher tax than steel made through an<\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong> electric arc furnace,<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> or steel made using green hydrogen.<\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Blast furnaces and basic oxygen furnaces emit about 2.2 tonnes of CO2 per tonne of steel produced.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">But electric arc furnaces emit 1.2 tonnes of CO2 for the same quantity of steel produced.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">So, a firm using an electric arc furnace to make steel will have lower CBT liability than those using the blast furnace route.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:square\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Chemicals:\u00a0<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">A sure way towards less carbon emission goal is using electricity from wind or solar sources, not coal or natural gas.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">But as fossil fuel is the raw material and not just an energy input for over 30,000 regularly used products, complete decarbonisation looks difficult.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Sharing emission data:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Indian exporters of <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>steel, aluminium, cement, fertiliser, hydrogen, and electricity<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> will need to share precise emission data with the counterpart EU importers, who will share the data with the CBT authorities.<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">The producers\u2019 data would include <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>installation-wise production<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> details like the quantity of products, verified emissions reports, and data regarding the embedded emissions of each type of goods.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Scientifically capturing this data <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>will need the help of energy auditors<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Using power generated from renewable energy:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">This will immediately lower the carbon load \u2014 fossil fuels like coal, oil, or natural gas cause 75 per cent of global carbon dioxide emissions. <\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Wind, solar and green hydrogen are current options<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">However, switching to new technology is expensive and may only be feasible in some cases.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>Way ahead<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Alignment of key parameters:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">A global view on this topic should include an alignment of key parameters applicable to them, as well as agreed standards for measuring carbon that is emitted in the production of goods.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Transparency and non-discrimination:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">Transparency and non-discrimination should remain key principles of any global understanding, and that should also ensure that carbon-related measures do not unnecessarily restrict trade.\u00a0<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>Adhering to Paris Agreement:<\/strong><\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">A shared vision should also recognize, in line with the Paris Agreement, that countries observe different approaches and speeds in their decarbonization efforts.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">With the proposed CBAM, there i<\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>s a new sense of urgency<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> for a shared understanding on carbon-based trade policies.<\/span><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\">\u00a0If countries believe a carbon border tax is a way forward.<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<div>\n<table cellspacing=\"0\" style=\"border-collapse:collapse; border:none; table-layout:fixed; width:624px\">\n<tbody>\n<tr>\n<td style=\"border-bottom:1px solid #000000; border-left:1px solid #000000; border-right:1px solid #000000; border-top:1px solid #000000; vertical-align:top\">\n<p style=\"text-align:center\"><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong><u>Daily Mains Question<\/u><\/strong><\/span><\/span><\/span><\/span><\/p>\n<p><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"><strong>[Q]<\/strong><\/span><\/span><\/span><\/span><span style=\"font-size:13pt\"><span style=\"font-family:'Book Antiqua',serif\"><span style=\"color:#000000\"><span style=\"background-color:#ffffff\"> What is the Carbon Border Adjustment Mechanism (CBAM)? What is its significance? How can Indian industries prepare to survive this mechanism?\u00a0<\/span><\/span><\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>In Context The EU, the UK, Canada, Japan, the US and others are bracing up to levy CBT on imports. About Carbon Border Adjustment Tax About: The European Union has proposed a policy called the Carbon Border Adjustment Mechanism (CBAM) to tax products such as cement and steel that are extremely carbon intensive, with effect [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1172,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[36,31,30,26],"class_list":["post-1171","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-editorial-analysis","tag-conservation","tag-government-policies-interventions","tag-gs-2","tag-gs-3"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2023\/07\/1197381Screenshot_6.png","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/1171","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=1171"}],"version-history":[{"count":1,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/1171\/revisions"}],"predecessor-version":[{"id":48429,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/1171\/revisions\/48429"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/1172"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=1171"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=1171"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=1171"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}