The European Union’s Carbon Border Adjustment Mechanism (CBAM), efficient from October 2023 in its transitional section, with full implementation anticipated by 2026, is a coverage instrument imposing a carbon worth on imports of carbon-intensive items inside the EU, aiming to forestall carbon leakage, aligning with the EU’s local weather objectives. At the moment, the CBAM applies to 6 varieties of imported items (i.e., cement, fertilisers, metal and iron, aluminium and hydrogen). Integral to EU’s ‘Match For 55’ imaginative and prescient, CBAM is a software to not solely guarantee compliance amongst imported items with EU’s local weather objectives but additionally a key incentive for different nations to leverage their decarbonisation methods. Nonetheless, inside the rigours of the CBAM mandate, it was felt that sure SMEs had been impacted disproportionately with regulatory burdens and to facilitate level-playing amongst EU firms and importers, a broader “de minimis’ exemption was caused via the Omnibus I bundle, introduced in February 2025 and formally adopted in October 2025. These Amendments are geared toward simplifying the CBAM and introducing exemptions for sure declarants.
Underneath the Omnibus Laws, a cumulative threshold of fifty tonnes per importer is adopted, thus exempting over 90% of the importers whereas persevering with to cowl 99% of the emissions. Notably, Hydrogen is just not eligible for exemption beneath the simplification provisions. Furthermore, beneath the Omnibus Regulation, the timeline for implementation has been revised. Underneath the simplification framework, whereas the CBAM mechanism will nonetheless be launched in 2026, importers will now not be required to instantly buy CBAM certificates comparable to the emissions of imported items. As an alternative, they’ll start funds in 2027 for his or her 2026 emissions, permitting for a transitional adaptation interval. Consequently, the deadline for submitting certificates might be prolonged from 31 August to 30 September, beginning in 2027. That is prone to considerably impression hydrogen and its derivatives, particularly gray hydrogen and ammonia merchandise closely reliant on fossil fuels for manufacturing, significantly for Indian exporters focusing on the EU market.
The report “Affect of EU’s Carbon Border Adjustment Mechanism and Alternatives for Inexperienced Hydrogen and Derivatives: A Perspective for Indian Exporters” has been revealed by GH2 India and Nangia Group. This word explores the worth impacts, India’s readiness, and real looking alternatives for transitioning to inexperienced hydrogen and its derivatives, contemplating the present plans and capabilities of Indian producers.
The entire report will be accessed right here
