New Delhi, Oct. 8 -- The World Trade Organization's (WTO) Dispute Settlement Body (DSB) on September 25 agreed to establish a panel to examine Russia's challenge to the European Union's Carbon Border Adjustment Mechanism (CBAM) and an alleged export subsidy linked to the EU's Emissions Trading System (ETS).

Russia has argued that the EU's CBAM creates trade barriers for goods covered by the mechanism. It has also alleged that the allocation of emissions allowances to certain companies under the ETS amounts to an export subsidy that improves the competitiveness of European industries.

The EU rejected the allegations and said it was confident that CBAM and the ETS comply with WTO rules. Brussels said it would participate in the proceeding...