European Union policymakers are considering changes that could make it easier for renewable electricity from neighbouring countries to qualify for actual-emissions treatment under the carbon border adjustment mechanism. The changes are also expected to affect how multi-trader electricity export chains operate and how multi-party contracting is structured. As of October 2026, producers and traders are dealing with a timing gap because the proposed amendments have not completed the legislative process while electricity has been imported under the definitive regime since January.
Commission proposal on CBAM electricity methodology and eligibility
The European Commission’s COM(2025) 989, tabled in December 2025, covers downstream CBAM goods and anti-circumvention measures alongside electricity-specific methodology updates. For electricity, the proposal would make actual-emissions eligibility less restrictive by changing rules related to contractual intermediaries and the network congestion requirement. It would also revise the default emissions methodology so it reflects the broader electricity generation mix rather than relying in the same way on fossil-only generation. These elements are proposals and not automatic entitlements.
The methodology shift could change how imports are assessed for carbon intensity. Under a fossil-generation-based default measure, a country with significant hydro, wind or solar generation can appear relatively carbon-intensive if the default does not reflect the overall output mix. A broader average grid factor could narrow the gap between system reality and default import treatment. The size of any effect would depend on final wording and official factors rather than on a simple renewable-share calculation.
Contracting rules, evidence requirements and congestion documentation
Intermediary reform is part of the same policy package, with implications for how actual-emissions claims are supported. Existing implementing rules recognise a direct PPA and a narrow single-contract tripartite structure. Broader recognition of verifiable contractual chains could allow standard power trading models to accommodate actual-emissions claims without requiring every intermediary to fit one three-party instrument. Even with more contractual flexibility, the importer would still need evidence that the claimed power was generated, nominated and imported as required by the final regulation.
Allocation controls remain necessary for qualification under the rules. The congestion condition has been a focus because market participants may struggle to obtain route-wide physical evidence for each import hour. The Commission proposed removing that requirement as part of the reform package, which could reduce documentation risk for renewable generators and EU buyers. Until an amendment is enacted and applies to a relevant import, producers cannot disregard current congestion evidence even if it is considered burdensome by policymakers .
Legislative timetable, retroactive application and contract adjustments
A key timing element concerns when methodology changes would apply to imports. The Commission’s proposal envisages applying some electricity-methodology changes to imports from 1 January 2026, so that first annual declarations in September 2027 can use revised rules. If adopted in its final form, that approach would create retroactive effect for covered imports . Businesses are expected to preserve evidence from 2026 even if they anticipate later simplification because final legislation may differ from drafts or include conditions for recalculation.
The European Parliament adopted amendments at first reading on 15 September 2026, after which the file entered interinstitutional negotiations. That process left the final text and timetable uncertain as of 17 October 2026. Project contracts are expected to distinguish between the regime already in force and anticipated changes, including how prices, documentation and qualification claims would shift if amendments become effective.
Contract provisions may need to address how future eligibility expands beyond existing structures. A forward-looking PPA could include an option to expand an eligible volume pool or allow additional contractual intermediaries once specific legal conditions are met. It should also specify how historic 2026 settlements would be reopened, whether buyers must submit corrected data, and who receives any realised carbon saving . Without such terms, disputes could arise over the value attributed to past imports if reforms take effect.
Implications for regional power market participants
For Serbia and other regional systems connected into cross-border trade flows, policy direction remains relevant but not yet bankable while legislative outcomes are pending. Market participants described as strongest are expected to preserve current evidence standards and negotiate contracts designed to handle future regulatory changes. They also aim to avoid distributing hypothetical regulatory gains before an enforceable rule exists.
