India's answer to EU carbon tax: green textiles

The textile industry is moving to shed its polluter tag by adopting a 'circular economy in order to avoid being snared by future climate change tax regimes such as the European Union's proposed Carbon Border Adjustment Mechanism (CBAM), two persons aware of the plans said.

- Dhirendra Kumar

CBAM will tax the embedded carbon' in imports from select emission-intensive sectors-cement, steel, aluminium, hydrogen, electricity and fertilizers. It is expected to be implemented in 2026.

Although textiles isn't mentioned by CBAM, promoting a circular economy in the sector, one of the biggest polluters, will be a key topic of proposed consultations, one of the persons cited above said.

A circular economy approach refers to a mechanism to extend the life of products through reuse and repair and to keep end-of-life material in the economy through recycling.

In the textile industry, much of this is about limiting water use. Textile manufacturing is a water-intensive sector, consuming roughly 1.6 million litres of water in India to produce 8,000 kg/day of fabric. Globally, 4% of all freshwater is used up in making textile products.