- A trade policy tool that prices carbon emissions from carbon-intensive imported goods to the EU.
- Decarbonizes energy-intensive sectors to minimize leakage.
- Protects the competitiveness of the industry so as to reduce incentives for relocation of industrial production outside the borders of the Union.
- Part of the European Green Deal, effective in 2026.
- Would affect carbon-intensive imports such as cement, electricity, fertilizers, iron and steel, aluminium and sometimes even chemicals.
- It equates the carbon price of imports with that for domestic production.
- Is in consonance with the WTO rules.
- This may adversely impact exports of metals by India to the EU.
- Uncertain about its consistency with UNFCCC.
