India Prepares Decarbonisation Measures to Mitigate Impact of EU's CBAM

India is proactively addressing the impending impact of the European Union”s Carbon Border Adjustment Mechanism (CBAM) by introducing a series of measures aimed at decarbonisation and establishing its carbon trading system. These initiatives include the establishment of the Indian Carbon Market (ICM) and encouraging high-emission industries to adopt low-carbon practices. The country aims to incentivise the transition to environmentally friendly practices by assigning a value, known as carbon credits, to each ton of reduced or avoided carbon dioxide equivalent. Industries surpassing their targets will be rewarded with carbon credit certificates, while those falling short will need to offset their deficit through certificates or face penalties.

To facilitate compliance, India”s government is actively engaging with various sectors, such as steel and mining, that are likely to be affected by CBAM norms. Plans include sensitising stakeholders and ensuring their preparedness. The government is also discussing the verification of carbon-intensive exports, such as aluminium, with the EU.

Efforts are underway to scale up net-zero technologies, including carbon capture and storage (CCS) plants, and investment in carbon capture, utilisation, and storage. The National Thermal Power Corporation (NTPC) is working on a CO2 to Methanol pilot project, CO2 storage mapping studies, and collaborations with Equinor and Shell.

Green initiatives are gaining momentum, with companies like Tata Steel, JSPL, and JSW experimenting with hydrogen injection, solar power, and CO2 capture technologies. Union Power Minister RK Singh highlighted the importance of reducing carbon content in exported items through initiatives like green hydrogen and green steel. JSW Steel is actively exploring renewable energy options and enhancing energy efficiency to reduce its carbon footprint. As India pushes forward with these measures, it demonstrates a proactive approach to address environmental concerns and align with global sustainability goals.