India, 17 others reserve right to participate in Russia’s dispute with EU

New Delhi: India, along with 17 other countries such as the US, UK and China, has reserved its third-party rights to participate in proceedings related to a trade dispute filed at the World Trade Organization (WTO) by Russia against the European Union‘s Carbon Border Adjustment Mechanism (CBAM). The WTO Dispute Settlement Body (DSB) has agreed to establish a panel to adjudicate on the issue.

“The DSB agreed at its meeting on Friday to a request from Russia to establish a panel to review the CBAM package and alleged export subsidy under the EU scheme for trading greenhouse gas emission allowances,” said an official, who did not wish to be identified.

Russia has alleged that the CBAM creates significant trade barriers for covered goods imported into the EU, is inconsistent with WTO rules and that the EU’s allocation of allowances to certain companies under the Emissions Trading System amounts to an export subsidy intended to strengthen the competitiveness of certain domestic industries.

In its own trade agreement with the EU, India is working with the bloc to build domestic capacity for CBAM verification, including recognition of at least 10 Indian verification agencies, with six applications already submitted. India is also working on its Carbon Credit Trading Scheme and discussing carbon pricing with the EU.

The EU CBAM took effect on January 1.