Despite the initial concerns about the impact on the MSME sector, the European Unions carbon border tax will help export-centric sectors achieve net zero much ahead of the government deadline.
The European Union intends to bring down carbon emissions in a phased manner in order to become a net-zero emitter of greenhouse gases by 2050, ahead of 2070 when India intends to be net zero.
The Carbon Border Adjustment Mechanism (CBAM) or Carbon Border Tax is set to be implemented from October 1, 2023. In the first phase, the EU will monitor the emission levels of goods entering the market from different source countries and by 2026 the tax will be levied on goods.