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 Carbon Credit Trading Scheme (CCTS) has been notified by India with the objective of reducing, removing, or avoiding greenhouse gas emissions from the Indian economy by pricing such emissions through the trading of Carbon Credit Certificates. With this recognition, U.K. importers of eligible Indian goods covered under CBAM will be able to seek carbon price relief corresponding to the effective carbon price borne by those goods under the CCTS, subject to satisfying the evidence and verification requirements prescribed under U.K. law. The recognition reflects the U.K. CBAM’s core principle of avoiding double taxation on goods that have already borne an eligible carbon price in their country of origin. However, the amount of relief that can be claimed will depend on the effective carbon price to which the goods in question have been subject.
