The Other Tariffs Parties Have To Address At COP30

In the opening plenary, India released a statement on behalf of Like-Minded Developing Countries, the grouping of around 24 developing countries, and BASIC (Brazil, South Africa, India and China) group. “...unilateral climate-related trade measures risk becoming instruments of protectionism, contradict the spirit of [the Convention] and undermine multilateral cooperation,” said the statement that represents more than half the global population.

The “unilateral measure” referenced here is the European Union’s Carbon Border Adjustment Mechanism (CBAM), which essentially functions like a tariff based on carbon emissions for goods, which will be implemented from January 2026.

The fundamental question underpinning the rift is this: Can it be a fair transition to a cleaner economy if the economic might of richer countries is used unilaterally to enforce stringent climate policies in poorer countries?

In the past, developing countries have called CBAM “unilateral” or “coercive” that violates the spirit of several international treaties, including regressing negotiations done in previous climate change conferences.

Despite India and other developing countries insisting on a discussion on “unilateral measures”, the topic was not included as part of the official agenda for COP 30. However, observers believe this contentious conversation is bound to emerge repeatedly.

The climate tariff

In 2022, the EU announced CBAM, a policy that puts a “fair price” on carbon emissions as well as “encourages cleaner industrial production in non-EU countries”. This tariff will be placed on six key sectors: cement, aluminium, fertilisers, iron and steel, hydrogen and electricity.

The policy is designed to curb “carbon leakage” that comes from importing goods from regions where carbon emissions are higher. For instance, the tariff will be imposed on imported steel from Africa where carbon emissions are significantly higher to produce the steel when compared to its manufacture in the EU.

The EU's carbon fee will be fixed according to the Emissions Trading System, which is dependent on the climate targets fixed within Europe.

It creates a level-playing field between domestic industries, which have to adhere to stringent but expensive-to-implement emission norms, and overseas industries that profit due to lax climate policies abroad.

This idea has been gaining steam among developed countries. The EU will implement its policy from January 2026, while, United Kingdom will bring out its own CBAM policy in 2027. Canada is reportedly exploring the idea.

Unilaterally undoing Just transitions

Since the announcement of CBAM, developing countries have used multi-lateral platforms, such as the climate talks, to raise concerns about the policy.

At COP29 in Baku, countries failed to agree on a decision on just transition, with several countries specifically singling out CBAM for integrating ‘carbon’ in trade talks. At the most recent meeting on Just Transition, the UN Climate Week in Africa held in September 2025, developing countries called CBAM “coercive” and “unilateral”.

The core of the objections is that it subverts the idea of Just Transition, a framework to help economies become environmentally sustainable but in an equitable manner that doesn’t burden poorer nations. This flows out of the principle that developed countries—who account for a majority of historic carbon emissions—agree to take the lead in climate action, including financing and transfer of sustainable technologies to poorer countries.

At COP30, Just Transition has been highlighted as one of the three most important topics to be discussed.

CBAM undoes this promise: by imposing severe costs on developing countries to finance their own climate action.

For many developing countries, CBAM violates Article 3.5 of 1992 United Nations Convention on Climate Change (UNFCCC). This states: “measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade.”

The European Union shot down criticisms saying that measures to deal with carbon leakage do not qualify as unilateral measures, while the UK retorted that there is actually “no consensus on the definition of unilateral measures”.

In response, the Like-Minded Group of Developing Countries (LMDC) had said: “The question on unilateral measures is not simply a matter of what we like or choose to call them, they are clear definitions in the literature and it is not a subjective matter relating to preference.”

An international trade and climate law analyst, who spoke on the condition of anonymity, said this impasse would have an impact on progress within the climate talks. “The situation deepens mistrust and competition rather than cooperation, and makes full and effective implementation of these climate treaties more difficult,” he said.

This gap in trust was seen at the conclusion of the Just Transition Dialogue which was held during Africa Climate Week in September 2025. Developing nations pointed out that the meeting’s summary read out by the chairs at the final plenary had omitted CBAM. While the chair assured that it would be “reflected accordingly”, the final note prepared by the chairs does not mention CBAM.

The power to recognise climate policy

Come January, CBAM enforces a one-size-fits-all template. It’ll cut off access to European Markets for Least Developed Countries (LDCs) like Mozambique—whose aluminium is primarily exported to the EU—that do not even have the necessary infrastructure to measure emissions. Even countries that have emission measurement systems may be hit as CBAM gives the EU the power to recognise climate policies introduced by others.

“CBAM refuses to recognise our national renewable energy certificate framework despite its high integrity and robust safeguard against double counting,” said Saudi Arabia at the Fourth Just Transition Dialogue. “CBAM effectively tells us that this sovereign design choice is unacceptable because it does not fit their top-down design for how other parties’ energy systems look like,” said Saudi Arabia.

For all their stated objections, India too is tinkering with its domestic policy in anticipation of CBAM. In the year 2023-24, India’s steel exports to the EU stood at Rs 29,534 crore, and some estimate that the industry would have to pay around Rs 3,000 crore as CBAM fees.

India’s Perform Achieve Trade (PAT) system is being replaced with the new Carbon Credit and Trading Scheme (CCTS) because the former was not recognised by the EU as a reliable method to set carbon pricing. While the former was focused on improving energy efficiency alone, the CCTS is done with the intention to establish a national carbon trading market that is compliant with international markets.

“India has already committed to CCTS where, to begin with, the nine large polluting industries are required to reduce their emissions intensity which will be traded in the market. However, the EU-ETS and India's CCTS rate differential will be substantial. There will be a revenue loss for India,” says Rajat Verma, associate professor in the Department of Management at Institute Of Management Studies, Ghaziabad, and co-author of a report studying the potential impacts of CBAM on India.

“We should see CBAM as an opportunity to design our own carbon abatement policies,” he added.

We reached out to the Ministry of Steel—which had said exports would be impacted—as well as the India Steel Association. We will update this story when we receive a response.

CBAM as a negotiating tool, rather than for climate justice

For many, CBAM represents climate coercion, rather than climate leadership as promised by the EU at the start of the climate talk. The climate benefits of CBAM may be meagre compared to the economic cost to be borne by the poorest countries. A report by the UN Trade and Development (UNCTAD) has said that the EU's CBAM would bring down global emissions by barely 0.1% with developing countries paying a large portion of that price.

The EU has refused to engage in conversations about CBAM during multilateral talks involving groups of developing countries. Frustrated by this evasion, India and China, confronted EU at the 29th COP held in Baku, asking where else could talks take place if not for the World Trade Organization or the climate conference.

While the EU did not provide an answer, it has been negotiating with countries on a bilateral basis. India is trying to address CBAM in its ongoing talks for a Free Trade Agreement, hoping to receive concessions from fees.

In August 2025, the EU and the United States of America came to an agreement that concessions would be made for the US under CBAM following bilateral talks. The US has withdrawn from the Paris Agreement and has not sent a delegation to this year’s COP for the first time.

“Why is the EU granting concessions to the US who has exited the Paris Agreement and reneged on its climate obligations?” asked Meena Raman, head of programmes at Third World Network, an independent non-profit research and advocacy organisation that closely observed global climate negotiations. “Instead of cooperating with developing countries who honor the Paris Agreement, the EU is punishing them while rewarding those who have gone against the climate treaty.”

This concession was not lost on Bolivia which brought it up at the September 2025 Just Transition dialogue on behalf of LMDCs. “At a time when the highest emitter has left the Paris Agreement, it is necessary to collectively resolve to strengthen and implement the agreement in good faith—not seek to further undermine it. However, we see concessions being made for them in terms of flexibilities in the CBAM implementation while developing countries are being punished,” said the statement.

At COP30, discussion on unilateral measures have been pushed out of the agenda and into “presidency consultations”, a form of informal discussion space within COP. Developing countries, including India, agreed to discuss the issue “in the spirit of extreme compromise and as a reaffirmation of our commitment to the process”.

We reached out to the Ministry of Environment, Forest and Climate Change, asking for an elaboration of their position. We will update this story when we receive a response.

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