India and China are aligning against the European Union’s Carbon Border Adjustment Mechanism (CBAM), a new carbon tariff that begins in January 2026. Both nations warned at the COP30 summit that the levy risks becoming a protectionist trade barrier, especially for their coal-dependent steel sectors.
India and China make trade a climate issue as EU carbon levy looms https://t.co/p2e2s2czjP
— Nikkei Asia (@NikkeiAsia) December 4, 2025
India’s exports to Europe make up nearly half of its shipped steel, and analysts say CBAM penalties could reach $290 per ton for Indian producers, putting firms like Tata Steel at a steep disadvantage.
China, the world’s largest steel exporter, faces less direct economic pressure but is using the issue to paint the EU’s policy as unilateral and politically motivated.
EU climate chief criticises China, India and Saudi pushback on carbon tax https://t.co/ZrgZ9cr19x
— FT Energy (@ftenergy) December 4, 2025
The EU argues the tariff is needed to curb “carbon leakage,” but Beijing and New Delhi say wealthy nations should cut emissions sooner instead of imposing new barriers.
Analysts warn India’s exports could decline sharply and force producers to slash prices or hunt for alternative markets as competition intensifies.
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TIPP Staff
TIPP Staff
