BRICS rejects EU carbon tax as 'protectionist', demands climate adaptation finance

BRICS countries on Tuesday (August 18, 2026) adopted a joint statement opposing what they described as 'unilateral, punitive, discriminatory and protectionist' climate measures, including the European Union's Carbon Border Adjustment Mechanism (CBAM). They also called for a significant increase in international funding to help developing countries adapt to climate change.

The statement was issued after the 12th BRICS Environment Ministers' Meeting in New Delhi, held under India's chairship. In it, the ministers said that carbon border measures such as CBAM could 'undermine developing countries' efforts to address climate change and build resilience'.

The statement comes as the EU's CBAM entered its definitive phase on January 1, 2026. The mechanism requires importers of carbon-intensive products — including iron and steel, aluminium, cement, fertilisers, hydrogen and electricity — to account for the carbon emissions embedded in their production. The EU argues that the measure is necessary to prevent 'carbon leakage', a situation where industries move production to jurisdictions with less stringent climate policies, thereby undermining global emissions reduction efforts.

India has significant exposure to the mechanism, especially in the steel sector. A recent analysis based on shipment-level trade data found that iron and steel account for approximately 90% of India's exports to the EU that fall under the CBAM. The study, published in Nature Climate Change in June 2026, used facility-level emissions estimates and found that high-emission Indian steel firms saw a reduction in both export quantities and revenues to the EU during the CBAM reporting phase, while lower-emission producers maintained their export levels.

The BRICS position comes as the EU and India move to implement a free trade agreement negotiated earlier this year. Indian exporters face additional carbon-related compliance requirements in the European market.

The ministers also called for an urgent increase in adaptation finance from developed countries. They said support should be 'new, additional, predictable, adequate and accessible', and should be provided through grants and concessional finance, without increasing the financial vulnerabilities of developing countries. They specifically urged developed countries to meet the commitment made at the UN climate conference in 2025 to triple adaptation finance to developing countries by 2035.

Adaptation finance helps countries and communities cope with climate impacts that can no longer be avoided, such as strengthening water security, agriculture, infrastructure, disaster preparedness and building climate-resilient livelihoods. It is distinct from mitigation finance, which goes towards cutting greenhouse-gas emissions.

The demand for adaptation finance is significant ahead of the UN climate conference, COP31, to be held in Turkey in November. Adaptation finance was one of the issues left unresolved at the June climate talks in Bonn, an annual precursor to the COP, with negotiations on several finance-related questions failing to yield an agreement.

The BRICS statement emphasized that adaptation finance should be easier for developing countries to access, and that the delivery and impact of such support should be properly tracked.

Much of India's climate-finance requirement is increasingly tied to adapting to heat, erratic rainfall, floods, droughts and other climate impacts. Historically, adaptation has received a smaller share of global climate finance compared to mitigation.