Brussels, October 27, 2026 — The European Commission has proposed changes to the Carbon Border Adjustment Mechanism (CBAM) electricity rules to address differences between explicit cross-border capacity allocation and implicit allocation through coupled electricity markets. The amendment could make it easier for electricity traded through coupled markets to qualify for actual-emissions treatment, if the final framework establishes a verifiable link between generation, market allocation and EU imports.
The proposal is relevant as South-East European electricity markets move toward deeper integration with the EU. Under the current approach, rules based on individually allocated interconnection capacity and firm nominations may not fully reflect how cross-border electricity is traded when capacity is incorporated into market-clearing algorithms.
Nomination condition under explicit and implicit capacity allocation
Under the existing CBAM electricity framework, claiming actual emissions requires firm nomination of allocated interconnection capacity by the responsible transmission system operators (TSOs). Plant production and nominated capacity must be matched within periods of no more than one hour.
The Commission’s strengthening proposal would adapt this condition to implicit capacity allocation. In that setting, market participants do not obtain and nominate traditional capacity rights in the same manner as under explicit allocation, with the precise requirements left to negotiations between EU institutions.
The Commission’s adjustment is intended to preserve reliable attribution of electricity to the relevant generating installation and importer while addressing a compliance mismatch as borders move toward closer market coupling. The proposal focuses on how the nomination requirement would operate when capacity is handled implicitly rather than through firm rights.
Verification evidence in coupled electricity markets
In coupled markets, evidence supporting a CBAM electricity claim is expected to rely more heavily on exchange transactions. This includes bidding-zone results, flow and allocation records, plant output and the contractual chain.
Companies may therefore need to retain detailed market data rather than rely primarily on capacity-auction certificates. Verification also needs to address the risk that the same low-carbon generation is allocated more than once, with the final methodology required to trace relevant electricity and emissions attributes through market and contractual arrangements.
Metering, scheduling and contract information are expected to be managed as a connected record set. Even where generation data is accurate, claims may be challenged if timestamps, interconnector nominations or buyer allocations do not reconcile.
Monthly exception reporting is described as a tool to identify missing hours, route changes, curtailment and balancing corrections before year-end verification issues. The objective is an auditable record of what was generated, scheduled and imported, rather than reliance on forecasts and operational records that may not align perfectly.
Potential eligibility for actual emissions and hourly matching
If final legislation accommodates implicit allocation, market coupling could expand the volume of low-emissions electricity eligible for actual-emissions treatment under CBAM. It could also support more standardised products supplied through exchanges and aggregators by reducing reliance on bespoke capacity arrangements.
The commercial benefit depends on final evidentiary requirements and how far compliance processes can be automated at scale. Market integration alone would not guarantee eligibility for actual-emissions treatment.
Where rules require hourly matching, companies are expected to assess the economics of qualifying electricity on an hourly basis. The potential value of a qualifying megawatt-hour can be assessed by comparing CBAM certificate exposure calculated using the applicable default emissions factor with exposure based on verified emissions value of the generating installation.
The difference must be weighed against additional costs for scheduling controls, data retention, verification and contract administration. Where benefits do not cover these costs, relying on applicable default treatment may be commercially preferable to maintaining a bespoke compliance chain.
Relevance for Western Balkans integration and cross-border trading
The issue is described as particularly relevant to the Western Balkans, where regional electricity integration is advancing while cross-border interconnections remain central to commercial trading. A CBAM framework that accommodates both explicit and implicit capacity allocation could help exporters participate in coupled markets without automatically losing access to installation-specific emissions treatment due to market design.
Nominated Electricity Market Operators (NEMOs), TSOs, exchange traders, utilities, aggregators and EU electricity importers are identified as stakeholders needing preparation covering both regulatory developments and market-coupling timelines. Data systems introduced during this period should capture exchange and allocation information in formats that can be mapped to generating-plant output and importer declarations.
The preparation described aims to preserve an audit trail as borders transition from explicit capacity arrangements toward implicit allocation. Companies are advised to avoid building compliance systems that depend exclusively on one capacity-allocation method when market arrangements may evolve.
Transition from current practice to amended rules
The Commission proposal can inform scenario analysis and contract planning alongside positions from the Council and European Parliament. However, proposed provisions must not be applied to current declarations before relevant amending legislation takes effect.
A two-scenario model is described as a way to distinguish nomination and evidence requirements applicable to 2026 imports from those that may apply under an amended framework. This approach supports data-system preparation and conditional contract clauses without treating a legislative proposal as an existing entitlement.
The compliance file should use consistent underlying records across electricity procurement, generation, customs and finance. This structure is intended to allow commercial managers and verifiers to understand the emissions claim, operational evidence supporting it, and conditions under which outcomes could change.
Before a transaction or reporting period is finalised, companies should connect contract terms with generating installation details, meter readings, schedule information and cross-border records while documenting who approves each assumption. A fallback should also be established for situations where preferred emissions treatment cannot be substantiated.
Defining the fallback in advance is described as a way to identify potential exposure before a verifier, customs authority or authorised CBAM declarant challenges a claim. It also supports subsequent price adjustments, verification changes and management reporting as rules develop.