INDUSTRY
Indian exports set to gain as its carbon pricing cuts UK’s CBAM levy
- IBJ Bureau
- Sep 08, 2026
In a major breakthrough, the UK has recognised India’s Carbon Credit Trading Scheme (CCTS) as a qualifying criterion for pricing relief under its Carbon Border Adjustment Mechanism (CBAM).
The move will reduce the tax burden on Indian exporters to the UK.
In a communication addressed to the Ministry of Power’s Bureau of Energy Efficiency, the UK’s HM Treasury has confirmed that the CCTS has been included in the UK’s published indicative list of overseas carbon pricing schemes assessed as qualifying criteria under a provision of the CBAM (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026.
The move is important as the Commerce Ministry was pursuing the matter with the UK for long.
The CCTS has been notified by India with the objective of reducing, removing or avoiding greenhouse gas emissions from the Indian economy by pricing such emissions through the trading of Carbon Credit Certificates.
The financial support for the implementation of the CCTS will be met by the Bureau of Energy Efficiency from fees and charges collected from entities under the scheme and its own resources.
With the recognition of the CCTS, the UK importers of eligible Indian goods covered under the CBAM will be able to seek carbon price relief corresponding to the effective carbon price borne by those goods under the CCTS subject to satisfying the evidence and verification requirements prescribed under the UK law.
This will reduce the effective CBAM liability on Indian goods, directly benefiting Indian exporters to the UK.
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