Along with China and Brazil, India has taken exception to the EU’s Carbon Border Adjustment Mechanism, which seeks to ensure that imports of carbon-intensive goods such as steel and aluminum reflect the cost to European producers of complying with the bloc’s tighter green rules. They view the measure as protectionist.
The threat comes after POLITICO earlier reported that Goyal had privately warned Brussels and London it would retaliate against their carbon taxes, seeking carve-outs for India’s steel, fertilizer and cement industries from the levy.
“The carbon border adjustment mechanism that the EU has visualized does not meet the test of fair play,” Goyal said in an interview, stressing that developed countries responsible for the bulk of historical emissions should do more to tackle climate change than developing nations.
The European Union and India want to wrap up talks on a free trade agreement this year, with Goyal and his EU counterpart Maroš Šefčovič recently ramping up the pace of negotiations in pursuit of that objective.
The EU’s carbon border tax poses the biggest hurdle in the talks.
On Wednesday, the EU agreed to simplify the levy and exempt most importers from the new rules, as part of a wider push to cut red tape.