UK recognizes India’s carbon credit scheme under CBAM

The United Kingdom has officially recognized India’s Carbon Credit Trading Scheme (CCTS) as a qualifying carbon pricing mechanism under its Carbon Border Adjustment Mechanism (CBAM). This decision, communicated by HM Treasury to the Bureau of Energy Efficiency, aims to reduce the carbon-related tax burden on Indian exporters.

Under this recognition, UK importers of eligible Indian goods covered by CBAM can seek carbon price relief based on the effective carbon price already paid under India’s CCTS. This measure is intended to prevent the imposition of double carbon costs on the same goods. However, the relief is not automatic; UK importers must satisfy specific evidence and verification requirements mandated by UK law. The relief amount will depend on the effective carbon price applicable to the specific goods.