Reporting actual electricity emissions under the EU carbon border adjustment mechanism remains closely linked to demonstrating network conditions between a generating installation and the EU electricity system. One of the most challenging elements of the current CBAM route involves evidence for these required network conditions. A proposed legislative reform could alter the way this requirement works, with potential implications for cross-border electricity traders and exporters in South-East Europe.
Current CBAM electricity rules rely on congestion and nomination evidence
Under the existing framework, electricity importers seeking to use actual emissions values must meet cumulative conditions. These include requirements connected to the physical power purchase agreement, network congestion, and electricity nominations. The combined evidence burden can be difficult for commercial parties when documenting electricity flows across multiple borders or through complex transmission networks.
The European Commission’s reform proposal would adjust parts of this framework. It reflects concerns that physical congestion information may be hard for commercial parties to obtain and may fall outside an importer’s control. The potential impact is described as particularly relevant for exporters in South-East Europe that rely on multi-border trading arrangements and complex network routes.
COM(2025) 989 would revise electricity treatment under CBAM
COM(2025) 989 is a legislative proposal that would materially change how electricity is handled under CBAM. The provisions cited include changes to the methodology for electricity default values. They also cover aspects of the conditions for using actual emissions values.
The same proposal includes a broader concept of physical power purchase agreements involving intermediaries. It also sets out a revised congestion and nomination framework for electricity reporting. The document is still under interinstitutional negotiation, rather than being enacted law.
EU institutions set positions ahead of interinstitutional negotiations
The Council of the EU adopted its negotiating position on 12 June 2026. The European Parliament adopted its position on 15 September 2026. Despite these steps, the proposal remains subject to further negotiation between institutions.
The legislative file also proposes expanding CBAM downstream from 2028 to selected steel- and aluminium-intensive goods. Both institutions support broader coverage, but their proposed product lists differ and remain under negotiation. Until final legislation is adopted, the existing scope continues as the operating baseline.
Evidence systems remain tied to binding rules and implementing acts
Traders and lenders are advised to maintain a version-controlled legal register distinguishing binding legislation, Commission guidance, and assumptions used for future scenarios. This approach is intended to prevent a potential regulatory benefit from being incorporated into contract prices before it becomes legally available. Even if congestion testing is relaxed, a simplified compliance route would not replace required evidence.
The source material states that Guarantees of Origin (GoOs) or generic renewable electricity portfolio claims would not act as substitutes for installation-level, contractual, and import evidence required under applicable rules. Companies are therefore expected to retain current evidence arrangements until legislative changes take effect. Route data can continue supporting credit assessments, operational analysis, and audit requirements even if a specific regulatory test is later modified.
Guidance publications accompany the reform process
Electricity traders, exporters, and project developers can prepare for possible legislative changes without assuming an outcome. The source points to modular PPA schedules, version-controlled calculation engines, and data fields designed to support both current and revised methodologies. This is described as a way to make implementation more efficient once final requirements are known.
The European Commission published definitive-period sector guidance on 14 August 2026, including dedicated guidance for electricity, iron and steel, and aluminium. It refreshed general CBAM questions and answers on 15 October 2026. These documents are described as explaining implementation while not replacing binding regulation and implementing acts.
Potential effects depend on final provisions for specific transactions
If adopted, a less restrictive framework could make renewable electricity supply more attractive to EU industrial buyers, including steel and aluminium producers. The commercial benefit described depends on the final legal provisions and how they apply to specific transactions. For policy-sensitive investments, flexibility for reform is framed alongside maintaining current-law controls until an adopted rule changes them.
The value of any regulatory reform is described as depending on enacted provisions rather than expectations that rules will change. The source material does not provide additional figures or timelines beyond the institutional dates already cited and the downstream expansion reference from 2028.