CBAM Omnibus 2025: What Regulation EU 2025/2083 Changed and What Indian Exporters Must Update
The EU’s CBAM Omnibus Regulation EU 2025/2083, adopted in March 2025, amended the original CBAM Regulation in five substantive areas. A small-importer threshold now exempts shipments below 50 tonnes. The indirect emission scope for aluminium was revised. Anti-circumvention provisions for scrap were tightened. Verification timelines changed. Every Indian exporter’s CBAM compliance programme should have been updated in mid-2025. Many have not.
Key Takeaways
- Regulation EU 2025/2083 — the CBAM Omnibus package — was adopted by the European Parliament and Council in March 2025 as part of the broader EU “Omnibus” regulatory simplification package. It amends the original CBAM Regulation EU 2023/956 in several substantive ways that are directly relevant to Indian steel, aluminium, and fertiliser exporters. The amendments apply from January 2026 — the start of the definitive period — meaning that all CBAM declarations due from September 2027 onwards (covering calendar year 2026 imports) must apply the Omnibus-amended rules, not the original 2023/956 provisions.
- The most operationally significant change is the introduction of a de minimis threshold exempting small importers from the CBAM obligation. Under the Omnibus amendment, EU importers whose total CBAM-covered imports in a calendar year fall below 50 tonnes of net product weight are exempt from the CBAM declaration requirement. This threshold is intended to reduce administrative burden on small traders and occasional importers — European SMEs and individuals importing small quantities of CBAM-covered goods. For Indian exporters, this means that EU customers below the 50-tonne threshold no longer need embedded emission data from their Indian suppliers — reducing the data provision burden for Indian exporters serving small-volume EU buyers.
- The indirect emission scope for aluminium was revised by the Omnibus. The original CBAM Regulation EU 2023/956 included Scope 2 indirect electricity emissions for aluminium in its embedded emission calculation — reflecting aluminium’s electricity-intensity and the fact that electricity source determines approximately 80 percent of coal-smelter aluminium’s total emission footprint. The Omnibus maintained this Scope 2 inclusion for aluminium but clarified the calculation methodology for indirect emissions when the aluminium producer uses captive power versus grid electricity, and specified the treatment of PPAs and RECs in the indirect emission calculation. The clarification is important because it resolves ambiguity in the original regulation that had led to inconsistent CBAM declarations across EU importers of Indian aluminium.
- The anti-circumvention provisions for aluminium scrap were significantly tightened. The original regulation lacked explicit provisions to prevent secondary aluminium producers from claiming near-zero embedded emissions for products made from pre-consumer scrap sourced from high-carbon primary smelters — a potential circumvention route where primary smelter machining waste was presented as zero-emission scrap input. The Omnibus added Article 7a requiring that pre-consumer scrap input to secondary aluminium production carries the embedded emission factor of the primary production process from which the scrap originated, rather than a default low value. This change directly affects Indian secondary aluminium producers that source pre-consumer process scrap from Vedanta’s Jharsuguda or NALCO’s Angul — their CBAM embedded emission calculations for secondary aluminium must now reflect the coal-CPP-sourced primary emission factor of the scrap source.
- The verification and declaration timeline was updated. The Omnibus extended the deadline for the first CBAM annual declaration from 31 May 2027 to 30 September 2027, aligning it with the EU’s fiscal year calendar and giving EU importers additional time to obtain verified embedded emission data from third-country exporters. For Indian exporters, this extension means that their EU customers have until 30 September 2027 to file declarations covering 2026 imports — giving more time for the embedded emission data collection and verification chain to be established. The extension does not change the January 2026 start date of the definitive period.
- The Omnibus also introduced a new provision requiring the European Commission to conduct a review of CBAM’s functioning by 31 December 2028 — specifically assessing the interaction between CBAM and the domestic carbon pricing instruments of third countries, including India’s CCTS. This review is the mechanism through which the CCTS-CBAM Article 9 deduction provision (allowing carbon prices paid in India to reduce CBAM certificate obligations) will be assessed and potentially strengthened. Indian exporters should monitor this review process as it will determine whether CCTS compliance generates genuine CBAM cost offsets by 2029.
The EU’s Omnibus regulatory simplification package of 2025 touched dozens of EU regulations in an effort to reduce administrative complexity across European green policy. CBAM was among the regulations amended — and while the changes were framed as simplification measures, several of them have substantive implications for the compliance programmes of non-EU exporters, including India’s steel, aluminium, and fertiliser industries. Understanding which provisions changed, what the changes mean operationally, and how Indian CBAM compliance programmes must be updated is essential for any exporter whose EU CBAM programme was designed around the original Regulation EU 2023/956 without subsequent amendment tracking.
The five changes described in the Key Takeaways above are the substantive amendments that Indian exporters need to incorporate into their compliance systems. There are also several clarifications and administrative amendments in the Omnibus that do not change the fundamental CBAM mechanics — updates to the CBAM Registry operating procedures, changes to the authorised declarant registration process, and revised guidance on the transitional period’s reporting templates — which compliance teams should review in the full Regulation EU 2025/2083 text but which do not require material restructuring of existing compliance programmes.
The small-importer threshold: which EU customer relationships change
The 50-tonne de minimis threshold is the change with the broadest practical effect for Indian exporters’ commercial relationships. Across all CBAM-covered product categories, EU importers that bring in fewer than 50 tonnes of net product weight per calendar year are exempt from the CBAM declaration requirement — and therefore do not need to provide verified embedded emission data to their Indian suppliers or to the CBAM Registry. For Indian exporters, the commercial question is how many of their EU customer accounts fall below this threshold.
For large bulk commodity exporters — Indian steel plants shipping 20,000 to 200,000 tonnes per year to major European steel service centres and end users — the 50-tonne threshold is irrelevant. Every shipment to their primary EU customers is well above the threshold, and CBAM compliance requirements are unchanged. The threshold matters for Indian exporters who sell to mid-tier European distributors, specialist wholesalers, and small manufacturers in volumes that might total less than 50 tonnes per year per importer. In aluminium, this applies to some specialty alloy exporters. In fertiliser additives, it applies to niche agricultural input suppliers. In steel, it applies primarily to specialty steel and tube exporters selling small-lot products to European engineering SMEs.
CBAM Omnibus EU 2025/2083 — Summary of Substantive Changes for Indian Exporters
| Change | Original Regulation (EU 2023/956) | Omnibus Amendment (EU 2025/2083) | India Exporter Impact |
|---|---|---|---|
| De minimis threshold | No threshold — all importers required to file declarations | EU importers below 50 t/year net weight exempt from CBAM declaration | Reduces data provision obligations for Indian exporters selling to small EU buyers |
| Aluminium Scope 2 methodology | Included but methodology for captive power vs grid vs PPA/REC treatment was ambiguous | Clarified: actual emission factor of verified electricity source; PPA/REC must demonstrate additionality | Forces Indian aluminium smelters to choose between actual RE delivery documentation or national GEF; RECs alone insufficient |
| Scrap anti-circumvention (Article 7a) | No explicit provision — secondary producers could claim low embedded emissions regardless of scrap source | Pre-consumer scrap must carry emission factor of original primary production process | Indian secondary aluminium using pre-consumer scrap from coal-based primary must update embedded emission calculations |
| First declaration deadline | 31 May 2027 (covering 2026 imports) | 30 September 2027 (covering 2026 imports) | Indian exporters and their EU customers have 4 additional months to finalise verified emission data for 2026 |
| CBAM-domestic carbon pricing review | Article 30 general review mandate | Specific mandated Commission review of Article 9 (carbon price deduction) by 31 December 2028 | CCTS-CBAM interaction formally reviewed by 2028 — potential strengthening of deduction mechanism |
| CBAM Registry operating procedures | Initial registration requirements | Updated authorised declarant renewal requirements and CBAM account management rules | Administrative update — EU importers of Indian goods should confirm their Registry registration is up to date |
The Article 7a scrap provision: who it affects in India’s aluminium sector
Article 7a of the amended CBAM Regulation — introduced by the Omnibus — is the provision that creates the most significant compliance recalculation burden for India’s secondary aluminium producers. Before the Omnibus, a secondary aluminium producer that purchased machining chips, dross, or off-specification billets from Vedanta’s Jharsuguda primary smelter could treat this pre-consumer scrap as effectively zero-emission input, claiming the low embedded emission of secondary aluminium (0.5 to 0.8 tCO₂/t) for its final product. The rationale was that scrap — regardless of origin — represented recovered material that avoided new primary production.
Article 7a closes this by requiring that pre-consumer scrap carries forward the embedded emission factor of the original production process. A secondary aluminium producer using Jharsuguda pre-consumer scrap (from a facility with 16.5 tCO₂/t embedded emissions) must now calculate a weighted average embedded emission for its final product that reflects both the coal-primary-sourced scrap’s emission factor and the secondary melting electricity emission factor — weighted by the proportion of each in the final product’s metal content. For a secondary producer using 100 percent Jharsuguda pre-consumer scrap, the embedded emission of the final product approaches the primary smelter’s own embedded emission — not the secondary’s low electricity-only footprint.
Pre-Consumer Scrap (Article 7a Rule) — Coal-Primary Source
Post-Consumer Scrap — No Article 7a Change
The Omnibus clarification on PPA and REC treatment for aluminium Scope 2 — why it matters. The original CBAM Regulation was ambiguous about whether an aluminium smelter that purchased RECs could use the low emission factor of the REC-attributed generation for CBAM Scope 2 purposes, or was required to use the national grid average. The Omnibus clarifies that the actual emission factor of the electricity physically consumed at the smelter is the relevant figure, subject to additionality requirements for any renewable attribution. A smelter that purchases RECs from existing renewable projects without additionality cannot use the renewable emission factor — it must use the national grid GEF. A smelter that has a physical PPA with new additionality-verified renewable capacity, with metered delivery, can use the actual renewable emission factor for the quantity of RE physically delivered. This clarification aligns CBAM’s electricity treatment with the GHG Protocol’s market-based accounting rules — but it means that Indian smelters that have been using legacy REC purchases (without additionality) to claim low Scope 2 embedded emissions for CBAM purposes need to urgently reassess their compliance calculations.
Frequently Asked Questions
When does the Omnibus amendment apply — does it affect 2025 imports or only 2026 onwards?
The Omnibus amendments apply from January 2026 — the start of the definitive CBAM period. The transitional period (October 2023 to December 2025) operated under the original Regulation EU 2023/956 and its implementing regulations. CBAM declarations filed for the transitional period (quarterly reports) are not retroactively affected by the Omnibus. The first CBAM annual declaration — due 30 September 2027 and covering 2026 imports — must apply the Omnibus-amended rules in full. Any embedded emission data that Indian exporters have provided to EU customers based on the original regulation’s methodology for aluminium indirect emissions or scrap treatment should be reviewed against the Omnibus amendments and updated before the 2026 data is used in CBAM declarations.
Does the 50-tonne de minimis threshold apply per product category or across all CBAM goods combined?
The 50-tonne threshold applies to the total weight of all CBAM-covered goods imported by a single EU importer in a calendar year — across all covered product categories combined, not per category. An EU importer that buys 30 tonnes of steel billets and 25 tonnes of aluminium wire from India in 2026 has combined CBAM imports of 55 tonnes and is above the threshold — and must file a CBAM declaration covering all covered goods. The threshold is applied at the importer level, not at the product or supplier level. Indian exporters cannot assume that their EU customers are below the threshold without confirming the customer’s total CBAM-covered import volume across all their suppliers.
What does the mandated December 2028 review mean for the CCTS-CBAM Article 9 deduction?
Article 9 of the CBAM Regulation allows carbon prices paid in third countries — including India’s CCTS — to reduce the net CBAM certificate obligation for exporters from those countries. The Omnibus mandated that the Commission conduct a specific review of this Article 9 deduction mechanism by December 2028, explicitly assessing whether the domestic carbon pricing instruments of CBAM-covered third countries meet the stringency and transparency requirements to justify meaningful deduction from CBAM certificates. If the review concludes that India’s CCTS is sufficiently robust — verified MRV, active market pricing, enforcement — it could recommend strengthening the deduction calculation, making CCTS compliance more directly valuable for CBAM reduction. This review is one of the most financially important CBAM policy developments to monitor over the 2026 to 2028 period for Indian industrial exporters.
Sources
- European Parliament — Regulation EU 2025/2083 — CBAM Omnibus amendment text, March 2025
- European Commission — CBAM implementation guidance — Omnibus amendment updates
- European Commission — Regulation EU 2023/956 — original CBAM Regulation as amended
- CBAM Registry — Authorised declarant portal — updated registration requirements post-Omnibus
Related Reclimatize.in Research
CBAM and Its Impact on Indian Industry — Overview How CBAM Works: A Practical Guide for Exporters CCTS-CBAM Deduction: What Article 9 Promises Indian Exporters Secondary Aluminium: The CBAM Advantage of the Scrap Route CBAM Product Classification: Which HS Codes Are Covered