Tata Steel’s CEO and MD, TV Narendran, suggests that India should consider including local taxes in its emission calculation standard to allow companies to claim credits against carbon tax-type payments under the European Union’s proposed Carbon Border Adjustment Mechanism (CBAM). Narendran believes that the Indian government should provide financial and policy support for transitioning manufacturing processes to green steel, similar to what the EU has done. He suggests that India could leverage its domestic market to take credits for carbon taxes paid and recommends this as a more reasonable route than expecting Europe to abandon CBAM.
The CBAM regulation recently entered into force and will apply initially to imports of certain goods and selected precursors, including iron and steel. Carbon taxation rules in Europe are expected to stress export items like aluminium and steel. The Indian ministries of Mines and Steel have been asked to address the issue of CBAM and transition to carbon reporting standards with their stakeholders.
Narendran also highlights the need for policies to incentivize the transition to green steel production in India. However, he acknowledges the challenges, such as the higher costs associated with using input materials like scrap and concerns over gas availability in certain regions. To participate in global markets, India must not remain isolated and can look to the carbon pricing mechanisms implemented by Europe as guidance. Narendran suggests that India does not need to reinvent the wheel but can learn from Europe’s policies and the support provided by European governments.
In conclusion, Narendran emphasizes the importance of addressing carbon emissions and transitioning to green steel production in India. He believes that including local taxes in emission calculations and adopting policies similar to those in Europe can help India stay competitive in the global market while reducing its carbon footprint.