New European Commission guidance has shifted the European Union’s carbon border levy for imported electricity from a largely regulatory requirement into a detailed verification process involving hourly network evidence, declarant-specific allocations and a clear separation between advisory support and independent assurance.
The Commission published its first dedicated guidance on verification and accreditation under the Carbon Border Adjustment Mechanism, or CBAM, on 24 August, followed by new Registry manuals for accredited verifiers on 27–28 August.
The documents do not amend the CBAM Regulation. They do, however, provide the clearest indication so far of how accredited verifiers are expected to assess claims that electricity imported into the EU qualifies for actual embedded emissions rather than a potentially less favourable default value.
The guidance is particularly relevant for electricity producers, traders, aggregators and industrial buyers in Serbia, Montenegro and other neighbouring markets seeking to supply identifiable renewable electricity to EU customers.
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The documents confirm that the operational standard will go well beyond presenting a power purchase agreement or guarantee of origin. Each claimed megawatt-hour must be traceable to a named generating installation, qualifying contractual structure, hourly production record, accepted cross-border nomination, EU importer and independently verified allocation.
The Commission has also indicated that proposed changes to the electricity provisions, including possible retroactive adjustments, remain under legislative consideration and are not reflected in the new guidance. The existing five conditions in Section 5 of Annex IV therefore remain the working basis for electricity imported during 2026.
PPA becomes a verification file
One of the most significant clarifications concerns the evidence that will be required for a power purchase agreement.
A verifier will be expected to confirm the authorised CBAM declarant’s Economic Operators Registration and Identification number, or EORI, together with the producer’s unique CBAM Installation ID, the relevant reporting period, contracted electricity quantity and supporting invoices or delivery records.
The verification must also demonstrate that appropriate controls are in place to prevent the same electricity from being claimed more than once.
This changes the practical role of the PPA file. A commercial agreement between a producer and trader will not, by itself, establish that the electricity qualifies for actual-emissions treatment.
The contract and supporting records must identify the relevant EU declarant, generating installation, reporting period and allocated quantity. They must also connect the commercial transaction with the physical electricity flow and the records ultimately used in the CBAM declaration.
The challenge becomes greater when aggregators, suppliers or other intermediaries sit between the generating installation and the EU importer.
The Commission’s guidance indicates that the verifier should determine whether the parties are covered by a single contractual arrangement. A chain of unrelated back-to-back contracts may therefore be insufficient where it fails to create an auditable connection between the installation, intermediary and authorised declarant.
Producers and suppliers should review existing trading arrangements to determine whether this chain is preserved. Contract amendments may be required to introduce CBAM-specific installation references, data-access rights, allocation methodologies, audit provisions and safeguards against double counting.
Hourly evidence becomes the core control
The guidance also provides greater detail on the physical-delivery requirements.
For the condition requiring that no physical network congestion existed between the generating installation and the EU destination, written transmission system operator evidence should demonstrate, on an hourly basis, that network conditions allowed the claimed transfer.
Where the available evidence is unclear, the verifier may seek confirmation directly from the relevant TSO and, where available, obtain a timestamped congestion report.
Comparable evidence may be required from TSOs in transit countries where electricity crosses several systems before entering the EU. This is particularly relevant to Western Balkan electricity transactions, where a contractual route may involve multiple bidding zones, borders and market participants.
The nomination requirement is similarly demanding. Accepted interconnector nominations must document the origin, destination and any relevant transit systems. Smart-meter production at the generating installation must correspond with the nominated delivery period, which cannot exceed one hour.
The result is an hourly reconciliation chain covering plant metering, generation data, cross-border capacity, accepted nominations, transit arrangements and the quantity ultimately imported by the authorised EU declarant.
Commercial and metering records that appear complete at monthly or annual level may nevertheless fail the verification test if they cannot be reconciled for each relevant hour.
This will require closer coordination between producers, balance-responsible parties, traders, TSOs and EU importers. It also increases the importance of timestamp consistency, meter hierarchy, missing-data procedures and correction controls for production or scheduling records.
A renewable generator cannot assume that every megawatt-hour produced under a long-term PPA automatically qualifies. Qualification must be demonstrated for the quantity that can be traced through the required contractual and physical chain.
Guarantees of origin may support the evidence package, but they cannot replace accepted nominations, border records or installation-level metering.
Twelve monthly reports required
The Commission has also clarified the role of interim reporting.
The verifier should receive 12 monthly interim reports covering the principal electricity eligibility criteria. Where there has been no relevant change during a particular month, a short confirmation stating “no change” may be accepted.
This transforms the process into a continuous compliance cycle rather than a year-end document collection exercise.
Producers and intermediaries will need a controlled monthly close covering changes to the installation, contractual arrangements, generation data, cross-border schedules, congestion evidence and allocated import quantities. Exceptions should be identified and resolved while TSO and trading records remain available.
Waiting until the end of the reporting year could leave gaps that are difficult to reconstruct and may result in the verifier rejecting part of the claimed electricity.
Each authorised CBAM declarant must also receive a declarant-specific addendum. The addendum must identify the declarant’s EORI number, confirm the relevant eligibility conditions and state the precise quantity imported from the installation.
The verifier must assess each addendum separately and provide an individual confirmation for each declarant-specific addendum within the verification report.
This effectively rules out reliance on a single pooled annual certificate where one producer or aggregator supplies several EU traders. Operators will instead need separate declarant-level sub-ledgers and controls ensuring that the same generation is not allocated to multiple customers.
The sub-ledger should track available generation, quantities reserved under each contract, accepted nominations, confirmed border deliveries, rejected hours, reallocations and the final verified quantity attributable to each declarant.
Advisory and assurance roles must be separated
The guidance also has important implications for the structure of the verification market.
Unlike the EU Emissions Trading System model, the CBAM verifier is responsible for assessing whether the operator’s monitoring plan complies with the applicable methodology and whether that plan has been correctly implemented.
At the same time, the accredited verifier must remain independent. In particular, it cannot have supported the preparation of the monitoring plan or emissions report that it subsequently verifies.
Companies will therefore need to distinguish readiness and advisory work from final accredited verification.
A pre-verification provider may assist with the monitoring plan, evidence repository, contractual controls, reporting procedures and corrective-action programme. The accredited verifier must then perform an independent assessment without having designed the underlying system.
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Using the intended final verifier to build the monitoring architecture could create an independence issue and complicate acceptance of the resulting verification report.
The distinction is particularly important for companies entering CBAM verification for the first time. Many electricity producers already operate sophisticated technical and trading systems but lack a single evidence repository connecting operational, contractual, customs and carbon records.
A defensible model will require documented responsibilities, controlled data interfaces and a clear audit trail showing who prepared, reviewed and approved each element of the monitoring and reporting system.
Accreditation scope becomes a selection criterion
The Commission guidance confirms that verification of electricity physically imported into the EU requires accreditation for activity group LI, covering electricity imported into the customs territory of the Union. Activity group LII represents the separate scope for indirect emissions.
The distinction matters when producers and EU declarants select a verifier. General CBAM accreditation, or accreditation for another covered industrial activity, does not automatically establish that a verifier is qualified to assess imported electricity.
An apparent wording inconsistency in one example within the guidance refers to LI in connection with indirect emissions. The controlling Delegated Regulation, however, identifies LI as imported electricity and LII as indirect emissions. Verifier-selection procedures should therefore follow the legal text and confirm the precise activity scope stated on the accreditation certificate.
Companies should also assess whether a prospective verifier has the technical expertise and geographic capacity to examine cross-border electricity evidence, including records originating from non-EU producers, traders and transmission system operators.
Registry access opens from September
The Commission has also begun operationalising verifier access to the CBAM Registry.
Accredited verifiers can begin registering from 1 September 2026 and must complete registration within two months of accreditation. They will be required to submit an accreditation certificate together with corporate and representative documentation through the EU’s O3CI access system.
Applications are handled through the national competent authority of the EU Member State in which the verifier was accredited.
Verification reports are expected to be issued through the Registry from January 2027.
For operators and declarants, verifier appointment will therefore involve more than checking an accreditation certificate. They will also need confirmation that the verifier has completed Registry registration, established the required digital access and can be connected to the relevant installation and declarant records.
The final readiness process should test the entire sequence: verifier accreditation scope, O3CI registration, Registry connection, installation data, monitoring documentation, monthly reports, declarant-specific addenda and issuance of the verification report.
Western Balkan exporters face an implementation test
For Serbian and other Western Balkan electricity exporters, the guidance raises both the potential value and the operational cost of proving actual emissions.
Renewable producers may gain a commercial advantage if they can demonstrate low embedded emissions for electricity physically imported into the EU. That advantage, however, depends on evidence linking individual generation intervals to contractual allocation and cross-border delivery.
A plant’s renewable status is not sufficient. Neither is an annual guarantee of origin, a general supply agreement or a portfolio-level claim that an equivalent quantity of renewable electricity was produced.
The qualifying unit is the megawatt-hour within a controlled chain of installation identity, production, scheduling, transmission, import, allocation and verification.
Companies seeking to apply actual emissions should therefore begin with a gap assessment covering five areas: contractual architecture, hourly metering, cross-border evidence, declarant-level allocation and verifier readiness.
The new guidance makes clear that CBAM electricity compliance cannot be assembled solely by a sustainability department. It requires an integrated operating model spanning plant operations, SCADA and metering, trading, balancing, legal agreements, customs records, carbon reporting and independent assurance.
The standard is straightforward to describe but demanding to execute: every claimed megawatt-hour must resolve to one named installation, one qualifying contractual chain, one accepted physical schedule, one EU importer or declarant, one controlled allocation and one independent verification conclusion.
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