EU inviting disaster with carbon tax on steel, says Piyush Goyal

Addressing the Berlin Global Dialogue, Goyal said the EUs Carbon Border Adjustment Mechanism (CBAM) and other regulatory restrictions could increase the cost of steel and other industrial materials, adversely affecting European businesses and consumers.

You put a CBAM (Carbon Border Adjustment Mechanism) on yourself. You put a 50 per cent import duty to bring steel into your country. Youre inviting disaster. Your cost of living will go up, Goyal said.

He argued that the growing number of regulations was adding to the burden on European industries and making them less competitive in global markets.

Weve lost count. You keep adding to your regulations, add to the burden of your industry, make yourself uncompetitive, the minister said.

Goyal cautioned that the higher costs of steel, aluminium and cement could have a wider impact on infrastructure development across Europe, including ports, airports, highways and utilities.

Now, imagine going forward, every infrastructure, whether its a port or an airport or your autobahns in Germany or your expressways, your utilities, your water pipelines, you name the infrastructure with costlier steel, costlier aluminium, costlier cement, with all the overlay of CBAM and deforestation rules, he said.

The minister also warned that regulatory restrictions could invite reciprocal measures from trading partners, potentially hurting European businesses.

And in this reciprocal world, you bring in a regulation and stop some other country from working with you. Theyll bring in two regulations, which will hurt your businesses, he said.

Goyal said the cumulative impact of such measures could push up the cost of living in Europe, increase inflation and weaken the competitiveness of its industries.

You will not be able to compete in global markets. Your auto industry is suffering that already, he said.

The minister said India, meanwhile, was working to strengthen its competitiveness and build balanced trade partnerships with countries around the world.

Weve got fair, equitable, and balanced agreements with every one of the partners with whom we are working, he said, adding that India was building partnerships based on competitiveness and complementary strengths.

India has raised concerns over the EUs CBAM, which covers carbon-intensive imports, including steel, aluminium and cement. The mechanism requires importers to account for emissions embedded in certain goods entering the European market, raising concerns among exporters over additional compliance costs and potential trade barriers.

Goyal also said India accounts for only 3-3.5 per cent of global carbon emissions despite supporting around 17 per cent of the worlds population. (ANI)