CBAM covers molecular hydrogen under CN 2804 10 on direct emissions only, with no de-minimis, so every consignment is priced from the first tonne. India’s default of 14.03 tCO2e per tonne marks up to 15.43 in 2026. Verified data from water electrolysis shows minimal direct emissions, because CBAM does not count the electricity used. That makes low-carbon data the competitive lever.
How CBAM prices molecular hydrogen
Hydrogen is one of the six product groups covered by CBAM, on a single combined nomenclature line, CN 2804 10 (2804 10 00). Only direct emissions are counted, so the production route sets almost the entire figure. The 50 tonne de-minimis threshold that applies to cement, iron and steel, aluminium and fertilisers excludes hydrogen, which means every consignment stays in scope from the first tonne.
India’s default value for hydrogen is 14.03 tCO2e per tonne. With the mark-up applied on top of the base, that default becomes 15.43 in 2026, 16.84 in 2027 and 18.24 from 2028. In 2026 the certificate price is the average EU ETS auction price for the quarter of import.
The declarant surrenders certificates for the embedded emissions minus the free allocation adjustment, and minus any carbon price deduction, never below zero. The adjustment mirrors the free allocation EU producers of the same good still receive. On default values it is the good’s CBAM benchmark, times the CBAM factor for the year, times the cross-sectoral correction factor, times the mass imported. The CBAM factor is 97.5 percent in 2026 and falls each year; from 2034 nothing is deducted for free allocation. In 2026, 2.5 percent of the benchmark is no longer deducted. That figure is not 2.5 percent of the embedded emissions.
Example: one tonne of Indian hydrogen imported in the third quarter of 2026 on default values. The default of 14.030, with the 10 percent mark-up, gives 15.433. The adjustment is 0.975 x 1.00 x 5.089, or 4.962. The declarant surrenders 15.433 minus 4.962, or 10.471 certificates, about EUR 862 at the third-quarter 2026 price of EUR 82.32.
The intensity gap that decides competitiveness
The production route, not the destination, decides the CBAM exposure of a hydrogen shipment. The gap between routes is wide:
| Production route | Direct emissions CBAM counts (tCO2e per tonne) |
|---|---|
| Water electrolysis, verified data | Minimal, in the Commission’s words, because the electricity used is not counted |
| Steam methane reforming, the Commission’s worked example | 8.396 |
| India default value with the 2026 mark-up | 15.43 |
| Default for a country with no value, with the 2026 mark-up | 19.51 |
The India default of 14.03, or 15.43 with the 2026 mark-up, sits well above the Commission’s 8.396 steam-reforming example. A verified electrolysis installation can therefore declare far below the default, and that verified figure is the competitive lever. GreenSutra, as a consultant, calculates and prepares the installation data, which must be verified by an independent accredited verifier before it replaces the marked-up default.
What it means for the export ambition
Hydrogen is hard and costly to ship, so it can travel as ammonia instead. Ammonia is a separate CBAM good in the fertiliser group under CN 2814, with an India default of 3.28. Unlike hydrogen, ammonia counts indirect emissions too. The electricity used for green ammonia is counted unless actual data shows a direct technical link or a power purchase agreement under Annex IV point 6. Its default carries a flat 1 percent mark-up, not the 10 percent that applies to hydrogen. India’s National Green Hydrogen Mission, approved on 4 January 2023 with an outlay of Rs 19,744 crore, targets at least 5 MMT per year of green hydrogen by 2030 and states the aim to become a global hub for production, use and export. The European Union aims to import 10 million tonnes of renewable hydrogen by 2030. The India-EU trade agreement finished negotiation in January 2026 and, on 16 October 2026, was not yet signed or in force. It grants no CBAM exemption. Its CBAM annex sets up a technical dialogue and most-favoured-nation treatment on CBAM flexibilities, so verified low-carbon data remains the decisive factor. The CBAM cost calculator models the exposure by product, volume and year, a CBAM discovery session maps the emissions data gap, and a CBAM consulting service prepares installation data for verification by an accredited verifier.
Sources: Regulation (EU) 2023/956 · Implementing Regulation (EU) 2025/2621 · European Commission CBAM