UK recognizes India’s carbon credit scheme under CBAM

The United Kingdom has recognized India’s Carbon Credit Trading Scheme (CCTS) as an eligible carbon-pricing mechanism under its upcoming Carbon Border Adjustment Mechanism (CBAM). This decision, communicated by HM Treasury to India’s Bureau of Energy Efficiency, aims to prevent Indian exporters from facing double carbon charges when shipping carbon-intensive goods to the UK.

Under the UK’s CBAM, which is scheduled for implementation in 2027, importers of products such as steel, aluminium, fertiliser, cement, hydrogen, ceramics, and glass will be subject to carbon-related charges. The recognition of the CCTS allows UK importers to seek relief corresponding to the carbon price already paid in India, provided the emissions are verified according to UK law.

In a separate development, India and the European Union have also agreed to strengthen technical cooperation regarding carbon markets and the implementation of the EU’s CBAM. Discussions in New Delhi focused on emissions monitoring, verification systems, and capacity building. India highlighted the progress of its CCTS, noting that emission-intensity reduction targets have been notified for 490 industrial units, and reported that non-fossil energy sources now account for 308 GW of its 558 GW total installed electricity capacity.