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Topic 155 · Economy, Budget & Banking

EU CBAM and other EU trade barriers

10 MCQs · tap an option to check it · All answers

Revise the 12 points first Book 1 RATNA
  1. Core Trigger: The EU Carbon Border Adjustment Mechanism entered its definitive phase on 1 January 2026.
  2. Debate: Critics ask whether a carbon border tax is fair climate trade or disguised protectionism.
  3. Exposed Goods: Importers must buy certificates covering the carbon embedded in steel, aluminium and cement; Indian steel and aluminium are most exposed.
  4. Key Term: Embedded emissions are the greenhouse gases released while producing a traded good.
  5. Next Rule: The EU Deforestation Regulation (EUDR) follows in December 2026.
  6. Stakeholders: EU importers and Indian MSME exporters bear the compliance burden.
  7. India Link: The Centre plans to absorb most MSME compliance costs, easing the burden on small exporters.
  8. Headquarters: The European Commission, which administers the EU, sits in Brussels, Belgium.
  9. Founded: The CBAM Regulation (EU) 2023/956 was adopted in 2023, with a transitional reporting phase starting 1 October 2023.
  10. Landmark: The Paris Agreement, adopted in 2015 at COP21, is the main global climate treaty.
  11. Articles: Article XX of the GATT permits trade measures for environmental protection, subject to non-discrimination conditions.
  12. Doctrine: Common but differentiated responsibilities means all states share climate duties, but developed states bear more.
Question 1 of 10

When did the EU Carbon Border Adjustment Mechanism enter its definitive phase?

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Answer: (A) 1 January 2026

Core Trigger: The EU Carbon Border Adjustment Mechanism entered its definitive phase on 1 January 2026.From Book 1 RATNA, topic 155, point 1

Question 2 of 10

Critics ask whether a carbon border tax is fair climate trade or what?

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Answer: (B) Disguised protectionism

Debate: Critics ask whether a carbon border tax is fair climate trade or disguised protectionism.From Book 1 RATNA, topic 155, point 2

Question 3 of 10

Which Indian exports are most exposed to CBAM?

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Answer: (C) Steel and aluminium

Exposed Goods: Importers must buy certificates covering the carbon embedded in steel, aluminium and cement; Indian steel and aluminium are most exposed.From Book 1 RATNA, topic 155, point 3

Question 4 of 10

What are embedded emissions?

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Answer: (D) Gases released while producing a traded good

Key Term: Embedded emissions are the greenhouse gases released while producing a traded good.From Book 1 RATNA, topic 155, point 4

Question 5 of 10

Which EU regulation follows CBAM in December 2026?

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Answer: (D) EU Deforestation Regulation

Next Rule: The EU Deforestation Regulation (EUDR) follows in December 2026.From Book 1 RATNA, topic 155, point 5

Question 6 of 10

To ease the CBAM burden on small exporters, the Centre plans to do what?

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Answer: (D) Absorb most MSME compliance costs

India Link: The Centre plans to absorb most MSME compliance costs, easing the burden on small exporters.From Book 1 RATNA, topic 155, point 7

Question 7 of 10

Which city does the European Commission sit in?

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Answer: (D) Brussels

Headquarters: The European Commission, which administers the EU, sits in Brussels, Belgium.From Book 1 RATNA, topic 155, point 8

Question 8 of 10

In which year was the CBAM Regulation (EU) 2023/956 adopted?

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Answer: (C) 2023

Founded: The CBAM Regulation (EU) 2023/956 was adopted in 2023, with a transitional reporting phase starting 1 October 2023.From Book 1 RATNA, topic 155, point 9

Question 9 of 10

The Paris Agreement was adopted in 2015 at which COP?

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Answer: (D) COP21

Landmark: The Paris Agreement, adopted in 2015 at COP21, is the main global climate treaty.From Book 1 RATNA, topic 155, point 10

Question 10 of 10

Consider the following. 1. Article XX of the GATT permits trade measures for environmental protection, subject to non-discrimination. 2. Common but differentiated responsibilities means developed states bear more of the climate duties. Which is/are correct?

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Answer: (C) Both 1 and 2

Articles: Article XX of the GATT permits trade measures for environmental protection, subject to non-discrimination conditions.From Book 1 RATNA, topic 155, point 11

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