The European Commission, under COM(2025) 989, is proposing revisions to the default emissions methodology used for imported electricity. The proposal includes moving toward an average grid emissions factor rather than a factor based only on fossil sources that set electricity prices. The change would affect how default values are calculated for electricity entering the EU.
If adopted, the revised approach could change the relative economics of electricity imports from countries expanding renewable generation. It would also make grid decarbonisation more directly relevant to the default calculation. The difference between imports assessed using default values and imports assessed using installation-specific actual emissions values could narrow.
CBAM coverage for electricity and current applicability
The definitive CBAM regime has applied since 1 January 2026. Electricity is covered under CN 2716 00 00. The mass-based de minimis exemption introduced through the 2025 simplification does not remove electricity imports from the mechanism.
For 2026 imports, CBAM certificate sales are scheduled to begin on 1 February 2027. The first annual declaration and certificate-surrender deadline is set for 30 September 2027. From 2027, the general certificate-pricing mechanism moves to weekly averaging of auction prices.
From 2027, quarterly holding requirements also become part of the treasury cycle. Companies therefore need to account for the financial consequences of CBAM while separating compliance timing from the timing of any potential regulatory reform. This includes planning around certificate sales, declarations, and surrender deadlines while policy changes are still under discussion.
Implications for Western Balkan electricity exports and industry investment
The proposed methodology has implications beyond electricity trading for Western Balkan countries. The source materials link faster renewable deployment, coal displacement, and improved grid integration to potential effects on carbon competitiveness. These factors could also influence the wider investment case for power-intensive industries.
The industries referenced include steel and aluminium. A lower national grid emissions factor could become more commercially relevant if final CBAM rules incorporate average grid emissions into the default route. The extent of any advantage would depend on the methodology ultimately adopted and on country-specific values applicable to the relevant reporting period.
Financial planning ahead of any legal change
Companies are advised not to build proposed emissions factors into base-case financial models before the revised methodology is legally adopted. This guidance also points to waiting for publication of applicable country values. Instead, sensitivity analysis can be used to assess how different grid-emissions assumptions might affect electricity costs, export competitiveness, and investment returns.
The same approach applies to treasury and investment decisions. Carbon-price hedges, electricity contracts, and capital expenditure may need to be arranged before legislative outcomes are known, while accounting and compliance treatment should remain anchored in rules currently in force. Flexible contract structures and retained source data are described as ways to respond more quickly once final methodology details are available.
Commission guidance on implementation timelines
The European Commission published definitive-period sector guidance on 14 August 2026. The guidance includes dedicated materials for electricity, iron and steel, and aluminium. It also refreshed general CBAM questions and answers on 15 October 2026.
The materials explain implementation but do not replace binding regulation or implementing acts. For policy-sensitive investments, the governing principle described is preserving flexibility for reform while maintaining current-law controls until an adopted rule changes them. Only the enacted CBAM methodology determines how much advantage from a cleaner national grid is recognised at the EU border.