The Engineering Export Promotion Council (EEPC), which has steel manufacturers among its members, is asking the government to mandate steel producers to disclose carbon emissions in their manufacturing process This is to help downstream industries to make full disclosures to meet the rules of European Union’s Carbon Border Adjustment Mechanism (CBAM).
“It is crucial to recognise that a substantial portion of carbon emissions occurs during the raw material stage of production, particularly in the steel industry,” EEPC says, in a background note. Asking the government to mandate all steel manufacturers, both primary and secondary, to include carbon emission data in their product test certificates, the council says, “This transparency will provide a more accurate representation of the environmental impact of products.”
Saikat Dutta, Senior Joint Director, EEPC, told businessline that the council had discussed the issue with its steel manufacturing members, and they were okay with the idea.
“The CBAM represents a significant stride towards equalising the carbon costs faced by EU products operating under the EU Emissions Trading System (ETS) and their imported counterparts. This approach seeks to ensure that EU industries remain competitive on the global stage while adhering to stringent climate policies,” notes EEPC.
Mandating steel manufacturers to disclose their process emissions is one of the many suggestions that the council has put on the government’s table. One of the other asks is for government to incorporate ‘carbon border tax’ “as a top agenda” in the ongoing Free Trade Agreement negotiations, particularly with the UK and the EU. “By doing so, India can ensure that the advantages of FTAs are preserved in the face of evolving climate-conscious trade policies,” it says.
Another demand is for financial support for energy audits. Noting that energy audits “come at a significant cost”, of ₹15 lakh, EEPC wants the government half the cost incurred by MSMEs to be reimbursed, under the Market Access Initiative (MAI) scheme. The council also wants MSMEs to be given “additional time” of three years to prepare for CBAM. It draws a parallel with EU’s own rules that allow small European importers to join CBAM later.
Call it carbon tax
Furthermore, EEPC wants the government to “officially designate” existing import and excuse duties on petroleum products, natural gas, and GST on coal, steel and aluminium, as ‘carbon taxes’, as a “strategic move”. This will bolster Indian exporters’ competitiveness and compliance with international carbon pricing measures. “Acknowledging the absence of a specific carbon tax in India, it is imperative that the country adapts to the changing trade dynamics catalysed by CBAM,” it says.