U.K. recognises India's carbon credit scheme under its carbon tax mechanism: official
The U.K. has officially recognized India's Carbon Credit Trading Scheme (CCTS) as a qualifying mechanism for carbon price relief under its Carbon Border Adjustment Mechanism (CBAM). This move is expected to lower the tax burden for Indian exporters shipping goods to the U.K.
Why it matters
This represents a significant diplomatic and economic alignment on climate policy, facilitating smoother trade relations between the two nations.
In a major breakthrough, the U.K. has recognised India's Carbon Credit Trading Scheme as a qualifying criterion for pricing relief under its carbon border adjustment mechanism (CBAM), a move that would reduce the tax burden on domestic exporters, an official said on Monday (September 7, 2026).
In a communication addressed to the Bureau of Energy Efficiency, Ministry of Power, the U.K.'s HM Treasury confirmed that the CCTS has been included in the U.K.'s published indicative list of overseas carbon pricing schemes assessed as qualifying criteria under a provision of the Carbon Border Adjustment Mechanism (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026, the official said.
The move is important as the Commerce Ministry was pursuing the matter with the U.K. for long.
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