Context:
Commerce and Industry Minister said government will take all necessary steps to protect Indian industry from any adverse impact of the Carbon Border Adjustment Mechanism.
About CBAM:
- It is a plan to tax carbon-intensive products, such as iron and steel, cement, fertilizer, aluminium, electricity, and hydrogen, from 2026.
- Propsed by – European Union (EU) in 2021.
- Also known as a carbon border tax or a carbon leakage instrument.
Carbon border tax is a tax on carbon emissions imposed on imported goods from countries with less strict climate policies.
Carbon leakage refers to a situation where a company decides to move their production from a country with stringent policies, to a country that is more lenient, leading to an increase in greenhouse gas emissions.
- Aim: To eliminate the difference in carbon price paid by companies subjected to the EU’s Emissions Trading System (ETS) or its domestic compliance-based carbon market.
- Part of the “Fit for 55 in 2030 package”
- Functioning –
- EU importers buy carbon certificates corresponding to the carbon price on the lines of EU’s carbon pricing rules.
- Deductions can be claimed from their CBAM liability if Non-EU producer has already paid for the emission in the country of production.
- Similar Measures adopted by EU –
- Social Climate Fund will support people in Europe with the costs of transitions.
- Reforming Emission Trading System (ETS): European industries and energy companies should cut emissions by 62 % by 2030 compared to 2005 levels, compared to previous target of 43%.
Fit for 55 in 2030 package – EU’s plan to reduce GHG emissions by at least 55% by 2030 compared to 1990 levels, in line with the European Climate Law.
Source: The Hindu
Previous Year Question
Which of the following adopted a law on data protection and privacy for its citizens known as ‘General Data Protection Regulation’ in April, 2016 and started implementation of it from 25th May, 2018?
[UPSC Civil Services Exam – 2019 Prelims]|
(a) Australia
(b) Canada
(c) The European Union
(d) The United States of America
Answer: (c)
