The UK Now Counts India's Carbon Price. The EU Is Still Talking

Oct 13

2 min read

Poster. The UK Now Counts India's Carbon Price. The EU Is Still Talking

Two quiet developments in the last few weeks matter a lot if you export steel, aluminium, cement, fertiliser or hydrogen.

Slide 1 of 5. India's carbon price now counts in the UK. The UK has put India's Carbon Credit Trading Scheme on its official list of qualifying carbon pricing schemes, alongside the EU emissions trading system, China's national trading system and 14 other schemes. Published 27 August 2026.

First, the UK government has put India's Carbon Credit Trading Scheme on its official list of qualifying carbon pricing schemes. The list, published on 27 August 2026, sits alongside the EU emissions trading system, China's national trading system and fourteen other schemes. When the UK's Carbon Border Adjustment Mechanism starts on 1 January 2027, a carbon cost already paid in India can count against the UK charge.

Slide 4 of 5. The EU is still talking. The EU border charge is in its definitive regime since 1 January 2026. On 12 October in New Delhi, technical talks continued on carbon pricing recognition and MRV audits.

Second, on 12 October, India's Power Secretary Pankaj Agarwal met Gerassimos Thomas, the European Commission's Director-General for Taxation and Customs, in New Delhi. Both sides agreed to continue technical work on recognising carbon pricing mechanisms and auditing systems, known as MRV, under the EU's own carbon border charge.

Slide 2 of 5. The UK charge at a glance. Aluminium, cement, fertiliser, hydrogen and iron and steel are covered from 1 January 2027. First payments due end May 2028. The importer carries the legal duty.

The UK charge starts in fourteen months. It applies to imports of aluminium, cement, fertiliser, hydrogen and iron and steel from 1 January 2027. The importer carries the legal duty, must register with HMRC once imports cross fifty thousand pounds, and makes the first payments by the end of May 2028. That sounds far away, but the paperwork runs through your buyer.

Slide 3 of 5. Recognition is not an exemption. A carbon price actually paid in India under the CCTS counts against the UK border charge. Free allowances do not count. The claim needs records and evidence.

Recognition is not an exemption. It opens a relief route equal to the carbon price actually paid in India. Emissions covered by free allowances do not count, and the importer must claim the relief with evidence and records.

The EU is the bigger bill. Its border charge has been in its definitive regime since 1 January 2026, and the regulation already allows a deduction for a carbon price paid in the country of origin, if it is real, evidenced and actually paid. Whether India's scheme and its verification system qualify is exactly what the Delhi talks are working on. India is pushing for its own verifiers to be recognised, so exporters can rely on home audits.

Why it matters now. India's scheme is run by the Bureau of Energy Efficiency, targets are notified for 490 industrial units, and trading runs on the Indian Carbon Market portal launched this March. A carbon price paid at home is fast becoming a receipt you can use at the border.

Slide 5 of 5. What exporters should do now. Know your embedded emissions, check whether your plant is one of the 490 obligated units, keep clean records, and tell your UK importer the relief route exists.

What to do now

Know the embedded emissions per tonne of what you ship to the UK and EU.
Check whether your plant is one of the 490 obligated units.
Keep clean records of every certificate you buy or surrender.
Tell your UK importer the relief route exists. The claim sits with them, the evidence sits with you.
Watch
the India and EU talks.

Our reading. Carbon paid at home is starting to count at the border, first in the UK and, if the talks land, in the EU. Exporters who measure and document now will spend less later.