Archive · 3 Sep 2026
Green Hydrogen Could Recast India-EU CBAM Challenge Into Opportunity
The European Union has started a system called CBAM that charges for pollution contained in certain imported goods.
This could make it harder for Indian industries to sell products in Europe if their emissions are high.
A report says green hydrogen could help solve this problem.
Green hydrogen can replace fossil fuels in industrial activities that are difficult to electrify.
India has large renewable-energy potential and a growing industrial base.
The report says both sides could use these strengths to build cleaner factories and supply chains.
India aims to produce 5 million tonnes of green hydrogen each year by 2030.
Companies have also received support to make electrolysers and produce hydrogen.
The report says the partnership should be judged by real projects and production, not only by signed agreements.
The report says green hydrogen could turn the EU’s CBAM into a driver of low-carbon industrial growth and stronger India-EU value chains.
CBAM’s definitive regime began on January 1, 2026, covering iron and steel, aluminium, cement, fertilisers, electricity and hydrogen.
The mechanism places a carbon cost on embedded emissions and creates pressure for producers outside Europe to reduce carbon intensity.
India targets 5 million tonnes per annum of green-hydrogen production capacity by 2030, while companies have received incentives for electrolyser and hydrogen capacity.
The report says success should be measured through deployed clean-industry capacity, hydrogen contracts, H₂-DRI plants and recognised carbon certificates.
- Who
- India and the European Union, with Indian and European clean-industry producers.
- What
- The report proposes using green hydrogen to turn the EU’s Carbon Border Adjustment Mechanism into an opportunity for cleaner industry, trade and supply-chain development.
- When
- CBAM entered its definitive regime on January 1, 2026; India’s hydrogen and steel targets run toward 2030 and 2030–31.
- Where
- India and the European Union, including their interconnected industrial and trade markets.
- Why
- To reduce embedded industrial emissions, protect trade competitiveness, improve energy security and build deeper India-EU clean-technology value chains.
Clean-Industry Opportunity
Trade and Transition Challenge
Impact of CBAM
Clean-Industry Opportunity
Green hydrogen could help India reduce the carbon intensity of covered products while supporting new clean-technology supply chains and deeper India-EU industrial ties.
Trade and Transition Challenge
CBAM places a carbon cost on embedded emissions in covered imports, creating a particular challenge for India because steel is central to its industrial expansion.
Industrial development
Clean-Industry Opportunity
The report argues that India should build clean industrial capacity from the outset rather than expand conventional capacity and retrofit it later.
Trade and Transition Challenge
India must dramatically expand steel, cement, chemicals, transport and infrastructure, making the transition a demanding industrial and investment challenge.
Measuring success
Clean-Industry Opportunity
The partnership could deliver trade competitiveness, energy security and sustainable prosperity if it produces electrolysers, contracted hydrogen, H₂-DRI plants and recognised carbon certificates.
Trade and Transition Challenge
Signed declarations alone would not demonstrate success; the report says results must be shown through installed capacity and operating projects.
- CBAM start date
- The definitive regime began on January 1, 2026.
- CBAM sectors
- Iron and steel, aluminium, cement, fertilisers, electricity and hydrogen.
- India-EU goods trade
- Bilateral goods trade is near 136 billion, according to the report.
- India’s trade balance
- India has an estimated $15 billion surplus.
- India hydrogen target
- 5 million tonnes per annum of green-hydrogen production capacity by 2030.
- Electrolyser incentives
- Nearly 15 companies received awards covering 3,000 MW per year of electrolyser manufacturing capacity.
- Hydrogen incentives
- 18 companies received incentives covering 8,62,000 tonnes per annum of green-hydrogen production capacity.