BRICS Opposes EU Carbon Tax and Demands Adaptation Funds

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Key takeaways

The 12th BRICS Environment Ministers' Meeting in New Delhi strongly condemned the EU's Carbon Border Adjustment Mechanism (CBAM) as protectionist.
The CBAM tax took full effect on 1st January 2026, covering emissions on imported goods like iron, steel, aluminium, cement, fertilisers, hydrogen, and electricity.
Iron and steel account for nearly 90% of India's exports to the EU affected by CBAM, causing revenue declines for high-emission steel firms.
BRICS ministers demanded that developed nations honor their commitment to triple adaptation finance for developing countries by 2035 ahead of COP31 in Türkiye.

The 12th BRICS Environment Ministers' Meeting took place in New Delhi.
Member nations firmly opposed the European Union's Carbon Border Adjustment Mechanism (CBAM).
BRICS leaders called on developed countries to scale up adaptation finance before the upcoming COP31 climate summit.

BRICS nations criticized CBAM as a unilateral, punitive, and protectionist policy that harms developing countries.
The mechanism entered its definitive phase on 1st January 2026.
Importers of carbon-heavy products like iron and steel, aluminium, cement, fertilisers, hydrogen, and electricity must pay for production emissions.
The EU claims this tax prevents carbon leakage, where companies shift production to countries with weaker climate rules.
CBAM is a major element of the EU's Fit for 55 package, which aims to cut greenhouse gas emissions by 55% by 2030 compared to 1990 levels.

India faces high risks because iron and steel account for nearly 90% of its exports to the EU under CBAM.
A June 2026 study in Nature Climate Change analyzed the economic impact on Indian steel exporters.
The study found that Indian steel firms with high emissions suffered losses in export volume and revenue.
In contrast, Indian steel producers with lower emissions successfully maintained their export levels to European markets.

BRICS ministers insisted that climate funding from rich nations must be predictable, adequate, accessible, and additional.
They demanded grants and concessional loans to prevent poor countries from falling into heavy debt.
BRICS urged developed countries to honor their pledge to triple adaptation finance for developing nations by 2035.
While mitigation finance targets emission reduction, adaptation finance funds vital needs like water security, resilient agriculture, infrastructure, and disaster management.
Resolving adaptation finance is critical before COP31 in Türkiye in November 2026, especially after talks stalled at the June 2026 Bonn climate conference.