Piyush Goyal criticises EU carbon tax on steel, warns of higher costs

India's commerce and industry minister, Piyush Goyal, used a panel at the Berlin Global Dialogue on Thursday to criticise the European Union's carbon border adjustment mechanism (CBAM), saying the bloc was "inviting disaster" by layering new costs on steel and other industrial imports.

Goyal said the EU had put a CBAM on itself and a 50 per cent import duty to bring steel into the country, warning that the bloc was inviting disaster and that its cost of living would go up. He argued that the accumulation of EU regulations was making European industry less competitive, saying that regulators had lost count and kept adding to regulations, adding to the burden of industry and making it uncompetitive.

Goyal extended the argument to infrastructure, warning that costlier steel, aluminium and cement would feed through to ports, airports, Germany's autobahns, expressways, utilities and water pipelines once CBAM and deforestation rules were applied. He also cautioned that in a reciprocal world, if the EU brought in a regulation and stopped some other country from working with it, that country would bring in two regulations that would hurt European businesses. The cumulative effect, he said, would be higher inflation and weaker European competitiveness, pointing to the bloc's auto industry as already suffering.

CBAM requires importers to account for the emissions embedded in carbon-intensive goods entering the European market, including steel, aluminium and cement. India has raised concerns that the mechanism imposes additional compliance costs on exporters and could act as a trade barrier.

Goyal contrasted India's approach with the EU's, saying India had fair, equitable and balanced agreements with every one of the partners with whom it was working, built on competitiveness and complementary strengths. He also said India accounts for only 3-3.5 per cent of global carbon emissions while supporting around 17 per cent of the world's population.