European Union policymakers are considering changes that could make it easier for renewable electricity from neighbouring countries to qualify for actual-emissions treatment under CBAM. The proposed reforms could help restore established cross-border trading routes and make multi-party power contracts more practical. However, as of October 2026, electricity producers and traders continue to face a significant timing challenge: the amendments have not completed the legislative process, while electricity imports have been subject to the definitive CBAM regime since January.
The European Commission’s COM(2025) 989, presented in December 2025, addresses downstream CBAM goods and anti-circumvention measures, alongside proposed changes to the electricity methodology. The electricity provisions would broaden eligibility for actual-emissions treatment, including adjustments to the rules governing contractual intermediaries and the network congestion requirement. The proposal would also revise the default emissions methodology to better reflect the wider electricity generation mix, rather than relying on fossil-fuel generation in the same way as the existing approach. These measures remain proposals and do not yet create automatic entitlements for electricity importers.
The proposed methodology could have important economic consequences for regional power markets. Countries with substantial hydro, wind and solar generation may appear more carbon-intensive under a default measure based on fossil-fuel generation than under an approach reflecting the overall electricity mix. A broader average grid emissions factor could narrow the gap between a country’s actual generation profile and the default treatment applied to its electricity exports. It could also influence the commercial attractiveness of installation-specific power purchase agreements (PPAs) and alter negotiating positions between traders and independent power producers. The eventual impact will depend on the final legislative wording and officially applicable emissions factors, rather than on a country’s renewable energy share alone.
Changes to the treatment of contractual intermediaries are another important element of the proposal. Existing implementing rules recognise direct PPAs and a narrowly defined tripartite contractual arrangement. Broader recognition of verifiable contractual chains could allow conventional electricity trading structures to support actual-emissions claims without requiring every intermediary to fit within a single three-party agreement. Nevertheless, importers would still need to demonstrate that the electricity was generated, nominated and imported in accordance with the final regulatory requirements. Greater contractual flexibility would not eliminate the need for reliable allocation, traceability and documentation controls.
The network congestion requirement has also attracted attention because market participants can face difficulties obtaining evidence covering the entire transmission route for every hour of electricity imports. The Commission has proposed removing this condition as part of the reform package, potentially reducing documentation burdens for renewable generators, traders and European buyers. Until the amendment is formally adopted and applicable, however, existing requirements remain relevant. Producers and importers cannot simply abandon congestion-related evidence on the assumption that the proposed change will eventually enter into force.
The proposed implementation timetable adds another layer of uncertainty. The Commission envisages applying certain electricity-methodology changes to imports from 1 January 2026, allowing the revised rules to be used for the first annual declarations scheduled for September 2027. If adopted in the proposed form, this would give the relevant provisions retroactive effect. Businesses should therefore retain comprehensive evidence for electricity imports made throughout 2026, even if they anticipate future simplifications. The final legislation could differ from the draft or introduce specific conditions governing the recalculation of emissions and declarations.
The European Parliament adopted amendments at first reading on 15 September 2026, after which the file moved into interinstitutional negotiations. As of 17 October 2026, the final wording and adoption timetable remained uncertain. Electricity supply agreements and cross-border trading contracts should therefore distinguish clearly between the rules already in force and anticipated regulatory changes. They should also specify how pricing, documentation obligations and eligibility claims would be adjusted if the amendments become effective.
A forward-looking PPA could include an option to expand the eligible electricity volume or accommodate additional contractual intermediaries once defined legal conditions are met. Contracts should also address whether historical settlements for 2026 can be reopened, whether buyers must submit corrected information and how any realised carbon-related savings would be allocated between the parties. Without clear contractual provisions, regulatory changes intended to improve market access could instead generate disputes over the value of earlier electricity imports.
For South-East Europe’s electricity market, the proposed reforms signal a potentially important shift in the treatment of cross-border renewable power. Their commercial value, however, cannot yet be treated as certain. The strongest market participants will continue to meet current evidence requirements, structure contracts to accommodate possible regulatory changes and avoid allocating anticipated carbon-cost savings before the relevant rules become legally enforceable.
