Reporting actual electricity emissions under the current CBAM framework depends on demonstrating network conditions between a generating installation and the EU electricity system. A proposed legislative reform could alter the way congestion requirements apply, with possible effects for cross-border electricity traders and exporters in South-East Europe. The change is linked to how congestion evidence is handled for compliance purposes.
Current CBAM electricity route requires congestion and nomination evidence
Under the existing rules, electricity importers using actual emissions values must meet cumulative conditions. These include requirements tied to the physical power purchase agreement, network congestion, and electricity nominations. The combined evidence requirements can be difficult for commercial parties to document when electricity flows cross multiple borders or complex transmission networks.
The European Commission’s reform proposal would adjust parts of this framework. The stated focus of the changes is that physical congestion information can be hard for commercial parties to obtain and may fall outside an importer’s control. This is relevant where trading arrangements rely on multi-border routing rather than single transmission paths.
The potential implications are described as particularly relevant for exporters in South-East Europe. These exporters depend on multi-border electricity trading arrangements and complex network routes. In such cases, meeting the current congestion-related evidence conditions can be a compliance constraint.
COM(2025) 989 would revise electricity default values and congestion framework
COM(2025) 989 remains a proposal and would materially change how CBAM treats electricity. The provisions include changes to the methodology for electricity default values. It also covers aspects of the conditions for using actual emissions values.
The same proposal would broaden the concept of physical power purchase agreements to include arrangements involving intermediaries. It also sets out a revised congestion and nomination framework for electricity reporting under CBAM. The overall effect would be tied to how these elements are implemented in the final legislative text.
EU institutions have adopted negotiating positions on the file, with the Council adopting its position on 12 June 2026. The European Parliament adopted its position on 15 September 2026. The proposal is still under interinstitutional negotiation and is not enacted law.
Downstream expansion to steel and aluminium remains under negotiation
The legislative file also proposes expanding CBAM downstream from 2028 to selected steel- and aluminium-intensive goods. Both institutions support broader coverage, but their proposed product lists differ. The scope therefore remains subject to further negotiation before final adoption.
Until final legislation is adopted, the existing CBAM scope continues as the operating baseline for covered goods and reporting obligations. Any changes to downstream coverage would depend on the outcome of negotiations within the same legislative process. Companies preparing for future years therefore track both electricity methodology updates and product-scope developments.
Legal registers and evidence requirements remain tied to current rules
Traders and lenders are advised to maintain a version-controlled legal register separating binding legislation, Commission guidance, and assumptions used for future scenarios. This approach is intended to prevent regulatory expectations from being priced into contracts before they become legally available. It also supports traceability when compliance documentation is audited.
The text states that even if a congestion test becomes less restrictive, a simplified compliance route would not replace required evidence elements. In particular, it does not make Guarantees of Origin or generic renewable electricity portfolio claims substitutes for installation-level, contractual, and import evidence under applicable rules. Companies are therefore expected to retain current evidence arrangements until legislative changes take effect.
Route data can continue to support credit assessments, operational analysis, and audit requirements even if a specific regulatory test is later modified. This indicates that supporting documentation may remain useful across different versions of compliance methodologies. The key requirement remains alignment with what is legally applicable at the time of reporting.
Implementation guidance published in August and October 2026
Electricity traders, exporters, and project developers can prepare for potential legislative changes without assuming their outcome. The approach described includes modular PPA schedules, version-controlled calculation engines, and data fields able to support both current and revised methodologies. These measures are intended to make implementation more efficient once final requirements are known.
The European Commission published definitive-period sector guidance on 14 August 2026, including dedicated guidance for electricity, iron and steel, and aluminium. It also refreshed general CBAM questions and answers on 15 October 2026. The documents are described as explanatory but not as replacements for binding regulation and implementing acts.
If adopted, a less restrictive framework could make renewable electricity supply more attractive to EU industrial buyers, including steel and aluminium producers. The commercial benefit described depends on the final legal provisions and their application to specific transactions. For policy-sensitive investments, flexibility for reform is balanced with maintaining current-law controls until an adopted rule changes them.