BRICS backs carbon market cooperation while opposing unilateral CBAM
The New Delhi Declaration 2026, adopted at the 18th BRICS Summit, endorsed a BRICS Carbon Markets Partnership to support national climate strategies, complement mitigation efforts, and mobilise resources for member countries
The declaration opposed "unilateral, punitive, discriminatory and protectionist measures" inconsistent with international trade law, explicitly naming carbon border adjustment mechanisms (CBAMs) as an example
The bloc linked carbon market cooperation to capacity building, technology transfer, and addressing debt burdens that constrain climate investment in developing economies
Separately, India's Carbon Credit Trading Scheme (CCTS) has gained recognition under the United Kingdom's upcoming CBAM framework, effective from January 1, 2027, allowing qualifying Indian carbon prices to offset UK CBAM liability for exporters
Carbon Border Adjustment Mechanism (CBAM)
CBAM is a trade-cum-climate instrument that levies a carbon price on imports of specified carbon-intensive goods, intended to prevent "carbon leakage" — the relocation of emissions-intensive production to jurisdictions with weaker climate regulation. The European Union's CBAM is the first major implementation and entered its definitive (fully operational) regime on January 1, 2026, after a transitional reporting-only phase that ran from October 1, 2023 to December 31, 2025.
Developing economies, including BRICS members, argue CBAM functions as a unilateral trade barrier that shifts the cost of decarbonisation onto exporters without adequate technology or finance support — the substantive concern behind the bloc's declaration language on "unilateral, discriminatory" measures.
India's Carbon Credit Trading Scheme (CCTS), 2023
The CCTS is India's domestic compliance carbon market, established to create a price signal for emission reductions by designated obligated entities (large energy-intensive industries). Its legal basis is the Energy Conservation Act, 2001, as amended by the Energy Conservation (Amendment) Act, 2022, which empowered the central government to notify a carbon credit trading scheme and introduced the concept of "carbon credit certificates."
Key Details
- Energy Conservation (Amendment) Act, 2022 came into force January 1, 2023; the Carbon Credit Trading Scheme was notified on June 28, 2023 under the Act
- The Bureau of Energy Efficiency (BEE) administers the compliance mechanism (successor to the Perform, Achieve and Trade or PAT scheme); State Electricity Regulatory Commissions/Central Electricity Regulatory Commission play a regulatory role in credit trading
- Designed to work alongside India's updated Nationally Determined Contribution (NDC): 45% reduction in emissions intensity of GDP by 2030 (from 2005 levels) and 50% cumulative electric power installed capacity from non-fossil sources by 2030
- Distinguished from voluntary carbon markets (project-based, unregulated) — CCTS is a compliance market with mandatory obligations for notified sectors
Recognition of CCTS carbon prices by the UK's CBAM is the first instance of an Indian domestic carbon market being formally linked to a foreign border carbon tax, directly relevant to the "carbon market cooperation" language in the BRICS declaration.
BRICS as a Grouping — Origin and Composition
BRICS (Brazil, Russia, India, China, South Africa) originated as "BRIC" in 2001 as an investment-thesis acronym and held its first leaders' summit in 2009; South Africa joined in 2010, making it "BRICS." The grouping has since undergone significant expansion, becoming a larger platform for Global South coordination on trade and climate issues such as carbon markets and CBAM opposition.
The 2026 summit was held in New Delhi under India's BRICS chairship, and the expanded membership (now covering a large share of global population and GDP) strengthens the bloc's collective bargaining position on climate-trade issues like CBAM.
- EU CBAM definitive regime start date: January 1, 2026; transitional phase ran October 1, 2023 to December 31, 2025
- CBAM sectors: cement, iron and steel, aluminium, fertilisers, electricity, hydrogen
- CBAM non-compliance penalty: €100 per excess tonne of embedded emissions
- India's CCTS notified: June 28, 2023, under the Energy Conservation (Amendment) Act, 2022 (in force from January 1, 2023)
- UK CBAM effective date: January 1, 2027
- India's NDC target: 45% emission intensity reduction by 2030 (from 2005 levels); 50% non-fossil power capacity by 2030
- NDB founding: Fortaleza Declaration, 2014; initial authorised capital US$100 billion; headquartered in Shanghai