For years, electricity procurement in Southeast Europe and neighbouring export markets was mostly a question of price, volume, tenor and credit. Industrial buyers wanted affordable power. Producers wanted bankable offtake. Traders monetised volatility, spreads and balancing risk.
That market is now changing.
The European Commission’s latest technical work on indirect emissions under the Carbon Border Adjustment Mechanism points to a future in which electricity used by industrial producers is not merely purchased, consumed and settled. It must be proven. It must be documented in a way that EU importers can use inside CBAM declarations. It must be credible enough for verification. And where a producer wants to claim actual low-carbon electricity rather than a default grid factor, the supporting evidence may become as important as the physical power itself.
This is the new energy-market angle in CBAM: electricity is becoming a carbon passport for traded industrial goods.
The issue moved into sharper focus on 8 June 2026, when DG TAXUD published its technical study on indirect emissions in CBAM. The study is organised around three questions: how to determine operational default emission factors for indirect emissions; when declarants should be allowed to claim actual indirect emissions, including requirements for direct technical links, power purchase agreements and verification; and whether indirect-emissions coverage could be extended to additional CBAM sectors.
For power producers and traders, that is a commercial signal. The buyers most exposed to CBAM will no longer be satisfied with a standard electricity supply contract, a generic green tariff or an annual certificate statement. They will need electricity products that can be linked to production, metering, embedded-emissions calculations and audit trails.
That is a very different market.
From green electricity to CBAM-verifiable electricity
The key distinction is between green electricity as a marketing claim and low-carbon electricity as a CBAM evidence file.
A renewable PPA may help an industrial company decarbonise, hedge electricity costs and strengthen its ESG profile. But under CBAM, the question becomes more technical: can the electricity claim be used to calculate actual indirect emissions for goods entering the EU? Can the importer or authorised CBAM declarant rely on it? Can the claim be checked by a verifier? Can the power consumption be allocated to the specific installation, process and product line producing CBAM goods?
That is why DG TAXUD’s focus on direct technical links, PPAs and verification matters. It implies that not every green electricity arrangement will have the same CBAM value. A behind-the-meter renewable asset with clear metering and a direct technical link to the industrial installation may carry stronger evidentiary weight than an ordinary supply contract. A PPA with robust settlement data, certificate cancellation, production matching and verifier access may be more valuable than a generic renewable certificate procured after the fact.
For producers and traders, the product has to evolve. The industrial buyer will increasingly ask not only: “What is the price?” but also: “Can this electricity reduce my CBAM exposure, and can I prove it?”
Why traders are central to the new framework
Traders are often treated as intermediaries in power markets. Under this emerging CBAM-linked electricity framework, they become data and evidence managers.
Industrial buyers will need power products that combine several layers:
- physical or financially settled electricity supply;
- renewable or low-carbon attribution;
- metered consumption records;
- production-period alignment;
- certificate or guarantee-of-origin control;
- balancing and residual supply treatment;
- audit access;
- documentation that can be transferred into the importer’s CBAM file.
This is where traders can create value. A trader that can assemble power from multiple producers, manage balancing, document certificate flows, reconcile metered consumption and provide a CBAM-ready data package will become more valuable than a trader offering only price execution.
The trader’s role becomes similar to a structured-products desk. It must package energy, certificates, shape, balancing, traceability and verification support into one industrial supply solution.
That is especially important in Southeast Europe, where power-market volatility is already intense. In Week 23 of 2026, SEE electricity demand rose 8.2% week on week to 15.15 TWh, variable renewable output fell 8.9%, wind dropped 15.5%, solar declined 5.1%, hydro rose 10.1%, and thermal generation jumped 24.5%. Net imports rose 9.1% to 1.22 TWh, showing how strongly the region still depends on cross-border balancing.
That volatility matters because industrial buyers cannot build CBAM strategies on annual averages alone. They need electricity contracts that address hourly shape, residual supply, balancing exposure and the carbon character of power actually consumed during production.
The default-factor risk
The first DG TAXUD study question — operational default emission factors — is crucial for energy markets.
A default factor is not just a technical fallback. It can become a commercial penalty for poor evidence. If an industrial exporter cannot prove actual low-carbon electricity use, the EU importer may have to rely on a default emissions factor. For producers in carbon-intensive grids, that could make exported cement, fertiliser, steel derivatives, aluminium products or other affected goods less competitive.
This creates a powerful incentive for industrial buyers to procure electricity differently. They will want power contracts that reduce the risk of falling back on defaults.
For electricity suppliers, that means the sales pitch changes. It is no longer enough to say: “We can supply renewable power.” The more valuable claim is: “We can supply electricity with the data architecture needed to support an actual indirect-emissions claim.”
That architecture includes metering, settlement records, generation certificates, PPA documentation, grid connection evidence, time-matching logic and a clear approach to residual consumption. In practical terms, power suppliers will need to provide a compliance appendix alongside the commercial contract.
The direct technical link premium
A direct technical link is likely to become one of the strongest forms of evidence for industrial buyers seeking low-carbon electricity recognition.
For renewable developers, this opens a premium segment: dedicated solar, wind, hydro, biomass or hybrid plants serving CBAM-exposed industrial sites. The value of such projects will not be limited to the electricity price. They may also help buyers reduce embedded-emissions exposure, protect EU market access and strengthen supply-chain credibility.
That can improve PPA bankability.
A cement producer, fertiliser plant, metals processor or hydrogen producer that faces CBAM-related electricity scrutiny may be willing to pay for a more robust direct-supply structure. The renewable developer receives a stronger offtaker. The lender sees a more strategic contract. The industrial buyer receives not only energy, but an emissions-evidence asset.
This is where battery storage also becomes important. A solar PPA may not match an industrial load curve. A battery can help shift renewable output into higher-value or more relevant consumption periods, reduce residual grid draw and strengthen the credibility of the supply profile. In a CBAM context, BESS is not only a flexibility asset. It can become part of the evidence strategy.
PPAs must be redesigned for verification
The standard PPA will not be enough.
A CBAM-ready PPA should include clauses on data ownership, access rights, metering hierarchy, certificate transfer or cancellation, settlement-period matching, residual electricity treatment, curtailment, outages, replacement power, balancing responsibility and verifier access. It should define exactly what the buyer can claim, what the seller guarantees, and what documentation will be delivered.
This is not only legal drafting. It is engineering and market design.
The PPA must be compatible with the plant’s electrical system, the production process and the buyer’s CBAM reporting boundaries. A contract that looks green on paper may fail if the production line cannot allocate electricity consumption to the CBAM good, or if the power supplier cannot provide the necessary audit trail.
That means power producers and traders should prepare standardised CBAM electricity data packs for industrial buyers. These should include:
- generation asset identity and location;
- installed capacity and technology;
- grid connection status;
- direct-line or grid-supply structure;
- PPA delivery period and settlement granularity;
- metered generation and consumption data;
- certificate issuance and cancellation evidence;
- balancing and replacement power treatment;
- residual mix disclosure;
- third-party verification rights;
- monthly and annual reconciliation templates.
The market will reward suppliers that can make this easy for buyers.
Why this matters beyond cement and fertilisers
The Commission’s CBAM page states that the definitive regime started on 1 January 2026, and that EU importers or indirect customs representatives importing more than the single mass-based threshold of 50 tonnes of CBAM goods must apply for authorised CBAM declarant status. It also says CBAM certificate prices are calculated from EU ETS allowance auction prices, quarterly in 2026 and weekly from 2027.
The current definitive-period treatment of indirect emissions is narrower than the transitional reporting experience. The Publications Office summary for Task 2 notes that CBAM covers direct production emissions and, for cement and fertiliser goods, indirect emissions from electricity consumed to produce CBAM goods; during the transitional period, indirect emissions were to be reported for all CBAM goods except electricity.
But DG TAXUD’s third study question is whether and how indirect-emissions coverage could be extended to additional CBAM sectors. That is the forward-looking market trigger.
Steel, aluminium, hydrogen and downstream processing chains should therefore not ignore electricity data simply because some indirect emissions are not yet chargeable in the same way. The direction of travel is clear: electricity is becoming a strategic variable in CBAM policy design.
The Task 3 publication also places the issue inside the wider EU carbon-leakage framework, including the EU ETS Directive, free allocation, auctioning revenues and indirect cost compensation for electro-intensive industries. That matters because any extension of CBAM indirect-emissions coverage has to interact with how EU producers are treated for carbon costs passed through electricity prices.
For traders, this means future-proofing products now. The buyer that asks for CBAM-grade electricity today may be a cement or fertiliser producer. Tomorrow it may be an aluminium processor, steel product exporter, hydrogen supplier or complex industrial group responding to buyer pressure even before the regulation formally expands.
Power-market volatility makes the framework commercially urgent
CBAM electricity evidence would be important even in stable power markets. But in SEE and wider Europe, volatility makes it urgent.
The market Week 23 trends showed SEE prices diverging sharply. Italy averaged €128.09/MWh, Bulgaria €100.83/MWh, Hungary €103.15/MWh, Greece €89.25/MWh, Serbia €99.63/MWh, Croatia €99.29/MWh, and Türkiye only €22.53/MWh, showing significant fragmentation across the region.
Gas risk adds another layer. TTF gas futures averaged €48.56/MWh during the first week of June, while the one-month forward contract was trading near €49.335/MWh. The report also warned that European gas markets remain vulnerable to LNG disruption, storage risk and competition for cargoes.
For industrial buyers, this means electricity procurement now has three linked purposes: price hedging, decarbonisation and CBAM evidence. A buyer that fixes price but cannot prove low-carbon supply has solved only one problem. A buyer that procures certificates but remains exposed to volatile spot residual supply has solved only part of the problem. A buyer that signs a PPA without metering and verification rights may still fail the evidence test.
That is why producers and traders need to build integrated products.
What producers must prepare
Power producers should prepare for a buyer base that asks for documentation as intensively as it asks for price.
Renewable producers should be ready to provide asset-level generation data, metering records, certificate issuance and cancellation evidence, curtailment logs, outage reports and clear contractual linkage to the industrial buyer. Where possible, they should design direct technical link projects or behind-the-meter solutions for CBAM-exposed sites.
Hydro producers should prepare to document generation origin, dispatch periods and certificate treatment. Hydro can be highly valuable for industrial buyers because it can better match non-solar load profiles, but only if its low-carbon attributes are traceable and not double-counted.
Thermal producers face a different market. They may continue supplying reliability and balancing power, but they will need to understand that CBAM-exposed buyers may treat fossil-based residual supply as a liability unless it is explicitly separated, priced and disclosed.
Storage operators should position batteries as compliance-supporting flexibility assets. A BESS can help renewable supply match industrial demand, reduce exposure to fossil-heavy evening power and improve the delivery shape of a PPA.
What traders must prepare
Traders should prepare for a world in which the best industrial electricity contract is not the cheapest contract, but the most defensible one.
They need systems that can reconcile generation, consumption, certificates, schedules and imbalances. They need to provide monthly evidence packs that industrial buyers can pass to EU importers. They need to manage residual electricity transparently. They need to avoid double-counting renewable attributes. They need to understand which parts of a supply structure are physical, which are contractual, and which are only financial.
A CBAM-ready trader will offer:
- structured renewable PPAs;
- sleeving services;
- balancing and shaping;
- storage optimisation;
- certificate management;
- residual mix disclosure;
- hourly or settlement-period reporting;
- importer-facing documentation;
- verifier cooperation;
- audit-ready data rooms.
This is a higher-margin service than commodity trading, but it requires stronger controls.
What industrial buyers will demand
Industrial buyers will increasingly demand electricity contracts that answer five questions.
First, what electricity did the plant consume during production of CBAM goods?
Second, what was the emissions factor attached to that electricity?
Third, is the claim based on a default factor, an actual factor, a PPA, a direct technical link or a blended method?
Fourth, can the electricity evidence be reconciled with production volumes and product-level allocation?
Fifth, can the EU importer or authorised CBAM declarant use the evidence safely in the CBAM declaration?
Any producer or trader that cannot answer those questions will be selling a weaker product.
The winners
The DG TAXUD technical study should be read by energy-market participants as the beginning of a new commercial category. It is not just a compliance document for importers. It is a signal to the power sector that electricity contracts are becoming embedded-emissions instruments.
For industrial buyers, the objective is clear: reduce CBAM exposure and protect EU market access.
For power producers, the opportunity is to turn low-carbon generation into a premium industrial supply product.
For traders, the opportunity is to become the infrastructure layer between volatile power markets and verifiable carbon documentation.
The winners will be those who can sell megawatt-hours plus proof. In the CBAM era, electricity without evidence will increasingly be just power. Electricity with evidence will become a market-access asset.
Elevated by CBAM.Clarion.Engineer