2 hrs ago
UK Recognises India’s Carbon Scheme, Easing CBAM Burden
The UK is creating a carbon charge on some goods entering the country.
India has its own system that can make companies pay for pollution linked to their products.
The UK says an eligible payment made in India can be counted when calculating the UK charge.
This could help prevent companies from paying twice for the same carbon emissions.
The relief will not happen automatically.
UK importers must provide evidence and pass verification checks.
The UK system starts in January 2027.
It will cover goods such as steel, aluminium, cement, fertilizer and hydrogen.
The UK has included India’s Carbon Credit Trading Scheme on its indicative list of qualifying carbon-pricing mechanisms under CBAM rules.
Eligible carbon prices paid in India can reduce the UK CBAM liability on covered Indian goods.
UK importers must satisfy evidence and verification requirements to claim the relief; it is not automatic.
The UK CBAM begins in January 2027 and covers products including iron, steel, aluminium, cement, fertilizer and hydrogen.
India exported $13.4 billion in merchandise to the UK in 2025-26, including $893.4 million in iron and steel products and $94 million in aluminium.
- Who
- The United Kingdom and India, including Indian exporters and UK importers of covered goods.
- What
- The UK has recognised India’s Carbon Credit Trading Scheme as a qualifying carbon-pricing mechanism, allowing eligible Indian carbon payments to reduce UK CBAM liability.
- Where
- The measure applies to eligible goods exported from India and imported into the United Kingdom.
- When
- The UK CBAM will begin in January 2027.
- Why
- To account for eligible carbon prices already paid in India and help avoid double taxation on the same goods.
Key facts
- UK CBAM start date
- January 2027
- Recognised Indian scheme
- India’s Carbon Credit Trading Scheme
- Relief process
- UK importers must meet evidence and verification requirements; relief is not automatic.
- Relief cap
- The maximum relief cannot exceed the UK CBAM liability on the goods.
- Covered products
- Iron, steel, aluminium, cement, fertilizer and hydrogen
- India-UK merchandise exports
- $13.4 billion in 2025-26
- Indian iron and steel exports
- $893.4 million to the UK in 2025-26
- Indian aluminium exports
- $94 million in the previous fiscal year
Quotes
A government official
An unnamed government official who explained the effect of the UK’s recognition on Indian exporters
“This will reduce the effective CBAM liability on Indian goods, directly benefiting Indian exporters to the UK.”
livemint.com
Sources
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