Electricity imports into the European Union are developing into a distinct carbon-compliance market as the Carbon Border Adjustment Mechanism (CBAM) assigns a financial consequence to emissions associated with imported power. Under the regime, generators and traders may benefit if they can document qualifying physical electricity supplies and substantiate claims about their emissions.
The European Commission’s transitional registry recorded approximately 96 million MWh of electricity imports between the fourth quarter of 2023 and the second quarter of 2025. The United Kingdom accounted for around 65% of the reported volume, followed by Serbia at 15% and North Macedonia at 5.2%. Bosnia and Herzegovina and Montenegro were also among the principal countries of origin.
These figures reflect historical declaration shares during the transitional period rather than audited market shares for 2026. The dataset therefore describes reported import declarations over that timeframe, not a forward-looking breakdown of future trading volumes.
Default emissions factors dominate transitional declarations
About 97% of electricity declarations during the analysed transitional period relied on default emissions factors instead of data specific to actual electricity generation. The European Commission estimated that the reported imports corresponded to approximately 86 million tonnes of CO2 equivalent. The Commission also cautioned that defaults based on fossil-fuel generation can overstate embedded emissions for some electricity flows.
The Commission said the figure should not be interpreted as a measurement of emissions from every imported megawatt-hour. Instead, it indicates how the chosen methodology can affect calculated emissions when generation-specific evidence is unavailable or does not meet applicable requirements.
With the definitive CBAM rules, establishing the correct emissions treatment becomes linked to financial outcomes for imported electricity. The reference price for the third quarter of 2026 reached €82.32 per tonne of CO2 equivalent. Carbon costs for imported power can vary depending on whether an authorised declarant applies default values or substantiates actual emissions from a qualifying generating installation.
Conditions for using actual emissions values
Using actual emissions values requires meeting specific conditions under the applicable legal framework. The framework requires a qualifying power purchase agreement between an authorised EU declarant and a third-country electricity producer, or a permitted intermediary arrangement.
Evidence must also cover physical connectivity or the absence of network congestion at the time of export, assessed on an hourly basis, alongside other statutory and implementing requirements. Metering records, transmission schedules, contractual allocation, and a defensible link between the generating installation and the imported electricity can therefore become commercially important.
A guarantee of origin or a general claim that a trader purchased renewable electricity is not sufficient on its own. While such instruments can support broader energy-accounting processes, they do not replace CBAM-specific conditions for using actual emissions values for imported electricity.
The same tracing requirement applies when low emissions occur at the generating plant but the electricity moves through trading chains. Low emissions at generation do not automatically establish eligibility if the electricity cannot be adequately traced through the chain connecting generation, contractual arrangements, and physical delivery.
Commission proposals do not change 2026 obligations
The European Commission has proposed changes to electricity-emissions attribution as part of its wider downstream CBAM package. The proposals aim to improve how decarbonisation outside the EU is treated, but they remain subject to legislative negotiations.
The reform cannot be treated as an existing entitlement, and importers are required to apply current rules when preparing their 2026 CBAM declarations. Anticipated future flexibility cannot justify an emissions calculation unless proposed changes have been adopted and become applicable.
For Western Balkan generators, this framework affects how supply products may be structured for CBAM purposes. The source material notes that wind, solar and hydropower producers, along with developers exploring storage-linked supply strategies, may be positioned differently depending on whether they can provide delivery plus an appropriate contractual structure and verifiable evidence connecting a generating installation to the EU border.
Banks evaluating such projects are expected to distinguish between a megawatt-hour that can be physically traded across borders and one that meets legal conditions for an actual-emissions claim under CBAM. Competitive advantage is described as depending on whether exporters and authorised EU declarants can demonstrate precise conditions needed to support claimed carbon treatment.