BRICS environment ministers condemn EU carbon border tax as 'protectionist'

BRICS environment ministers meeting in New Delhi have issued a joint statement opposing climate measures they described as "unilateral, punitive, discriminatory and protectionist," singling out the European Union's Carbon Border Adjustment Mechanism (CBAM). The statement, adopted at the 12th BRICS Environment Ministers' Meeting held under India's chairship, said such carbon border measures could "undermine developing countries' efforts to address climate change and build resilience."

The meeting comes as the EU's CBAM entered its definitive phase on January 1 this year. The mechanism requires importers of carbon-intensive products — including iron and steel, aluminium, cement, fertilisers, hydrogen and electricity — to account for carbon emissions associated with their production. The European Commission maintains the measure complies with WTO rules by creating a level playing field without creating trade barriers.

Widening disagreement over carbon pricing

The dispute centres on how to price carbon embodied in traded goods. Under CBAM, importers must pay a carbon price equivalent to that paid by European producers under the EU Emissions Trading System. The EU says the mechanism is intended to prevent carbon leakage, the shifting of carbon-intensive production outside the bloc because of differences in climate policies.

BRICS countries including India, South Africa and China have complained that CBAM will increase costs for their steel and aluminium industries. One area of tension is the revenue the levy is expected to generate. EU officials expect CBAM to raise €10 billion per year by full implementation in 2030, which will become an "own resource" for the bloc's budget. EUobserver notes the BRICS criticism but also points out that EU insists the mechanism levels the playing field.

Indian steel in the crosshairs

India is among the countries with significant exposure to the mechanism, particularly through its steel sector. An analysis found that iron and steel account for about 90% of India's exports to the EU that fall within the CBAM framework. A June 2026 analysis in Nature Climate Change, based on shipment-level trade data and facility-level emissions estimates, found high-emission Indian steel firms had reduced their export quantities and revenues to the EU during the CBAM reporting phase, while lower-emission firms maintained their levels.

The BRICS statement called for a significant increase in international funding to help developing countries adapt to climate change. The ministers urged developed countries to meet the commitment agreed at the UN climate conference in 2025 to triple adaptation finance by 2035, and called for such finance to be "new, additional, predictable, adequate and accessible," provided through grants and concessional finance. Adaptation finance is used for measures including infrastructure, disaster preparedness and climate-resilient livelihoods. The demand comes ahead of COP31 in Turkey in November, with adaptation finance remaining unresolved at the June Bonn talks. In India, adaptation has historically received less funding than mitigation in the country's climate finance requirements.

The BRICS position comes as the EU and India move to implement a free trade agreement negotiated earlier this year. India and Brazil have both agreed trade deals with the EU in the past year, while EU-South Africa talks are ongoing.

The BRICS grouping, which accounts for 26 percent of world trade, has expanded its membership since 2024 to include Egypt, Ethiopia, Iran, the UAE, Saudi Arabia and Indonesia, with nine partner countries. The group has been a consistent critic of CBAM. In July, BRICS agreed a declaration on climate finance expressing concern that such measures, as well as unilateral economic and financial sanctions, may undermine BRICS countries' capacities to invest in their own just transitions and development priorities.

China has raised concerns within the WTO about CBAM but has not filed an official complaint. The EU maintains the levy complied with its international obligations and is designed to prevent carbon leakage, not to create trade barriers.