A senior official of the European Parliament on Saturday said that clubbing India with high per capita emitters like the United States and China is completely unacceptable as New Delhi has “very low” emissions compared to the rest. This comes as the European Union has planned to impose a carbon tax on goods imported from India and China for high emissions.

The EU has planned to launch the Carbon Border Adjustment Mechanism (CBAM) a tax which the 27-member bloc says seeks to set a fair price on the carbon emitted during the production of energy-intensive products like iron, steel, cement, fertilisers and aluminium and non-EU countries. It will come into effect from January 1, 2026.

The imposition of a ‘carbon tax’ on goods from developing countries like India and China has sparked a debate at the UN Climate Conference, or COP28, which is currently ongoing in Dubai. Poorer countries have argued that this tax will harm livelihoods and economic growth.

India has threatened to retaliate against such “unfair” taxes. “Bharat will address the problem of CBAM with confidence, and we will find solutions. We will see how we can convert CBAM to our advantage if it comes in. Of course, we will retaliate. You need not worry about it,” said Union Commerce Minister Piyush Goyal at an event in Delhi.

What did the European Parliament official say?

Speaking to the news agency PTI on the sidelines of COP28, Peter Liese, a German politician and senior member of the European Parliament, said, “Many people in Europe put China and India in the same basket and sometimes even with the Gulf states which is completely unacceptable. India has very low per capita emissions compared to these countries.”

He also remarked that Indian people “should be able to own a car when people in Germany own two cars”. His remarks are in reference to India’s per capita emissions that remain low despite contributing significantly to the world population.

India’s per capita emissions saw an increase by around five per cent from last year to reach two tonnes of carbon dioxide but these were still less than half of the global average, according to a report. Liese underscored that per capita emissions of the United Arab Emirates (UAE), China and the US were very different from India.

However, Liese said that the EU aims to reduce emissions by 55 per cent by 2030 from 1990 levels and that achieving such a significant reduction without CBAM would not be feasible. “Despite low per capita emissions, India’s cement, iron and steel are as carbon-intensive as produced elsewhere in the world. So we need to find a good balance here,” he said.

A global team of scientists said that the US was the highest per capita emitter with 14.9 tonnes of carbon dioxide, followed by Russia (11.4 tonnes), Japan (8.5 tonnes) and China (8.0 tonnes).

About CBAM

The EU-proposed CBAM seeks to create a level playing field for domestically manufactured green goods and reduce emissions from imports which account for around 20 percent of the bloc’s total emissions. During the trial period that started on October 1 this year, companies from seven carbon-intensive sectors, including steel, cement, fertiliser, aluminium and hydrocarbon products, were compelled to share emissions data with the EU.

The EU enforces tough rules on carbon emissions and its ‘Emissions Trading System’ caps emissions from industries and lets them buy ‘allowances’ if they exceed their limits. However, it fears that the strictness might push businesses to move to other countries with relaxed rules – known as carbon leakage.

A recent study by the United Nations Conference on Trade and Development (2021) shows that through CBAM, a $44 per tonne carbon tax would cut leakage by more than half, from 13.3 per cent to 5.2 per cent.

However, Indian exporters of steel and aluminium could lose up to $2 billion due to border taxation in European countries as New Delhi was the eighth-largest exporter of iron and steel to the EU in 2019, according to a study by Centre for Social and Economic Progress (CSEP).

(with inputs from PTI)

Latest World News