Brussels, October 27, 2026 — The European Commission has proposed changes to the Carbon Border Adjustment Mechanism (CBAM) electricity rules to address differences between explicit cross-border capacity allocation and implicit allocation through coupled electricity markets. The amendment could make it easier for electricity traded through coupled markets to qualify for actual-emissions treatment, if the final framework links generation, market allocation and EU imports in a verifiable way.
The proposal is also tied to deeper integration between South-East European electricity markets and the European Union. Rules that rely on individually allocated interconnection capacity and firm nominations may not fully reflect how cross-border electricity is traded when capacity is incorporated into market-clearing algorithms.
Nomination condition for actual-emissions claims
Under the current CBAM electricity framework, claiming actual emissions requires firm nomination of allocated interconnection capacity by the responsible transmission system operators (TSOs). Plant production and nominated capacity must be matched within periods of no more than one hour.
The Commission’s strengthening proposal would adapt the same condition to implicit capacity allocation. In that setting, market participants do not obtain and nominate traditional capacity rights in the same manner as under explicit allocation, with the precise requirements still subject to negotiations between EU institutions.
The change is intended to address a compliance mismatch as borders move toward closer market coupling. The approach aims to preserve reliable attribution of electricity to the relevant generating installation and importer while adjusting how the nomination condition operates under implicit allocation.
Verification evidence in coupled markets
In coupled markets, evidence supporting a CBAM electricity claim is expected to depend more heavily on exchange transactions and bidding-zone results. It would also draw on flow and allocation records, plant output and the contractual chain.
Companies may therefore need to retain detailed market data rather than rely primarily on capacity-auction certificates. Verification would also need to address the risk that the same low-carbon generation is allocated more than once, requiring a final methodology for tracing relevant electricity and emissions attributes through market and contractual arrangements.
Metering, scheduling and contract information are expected to be managed as a connected record set. Even with accurate generation data, a claim may be challenged if timestamps, interconnector nominations or buyer allocations do not reconcile.
Monthly exception reporting is described as a tool to identify missing hours, route changes, curtailment and balancing corrections before year-end verification issues arise. The objective is an auditable record of what was generated, scheduled and imported rather than reliance on forecasts or operational records that may not match perfectly.
Potential eligibility effects for low-emissions electricity
If final legislation accommodates implicit allocation, market coupling could expand the volume of low-emissions electricity eligible for actual-emissions treatment. The framework could also support more standardised products supplied through exchanges and aggregators while reducing reliance on bespoke capacity arrangements.
The commercial benefit would depend on final evidentiary requirements and how far compliance processes can be automated at scale. Market integration alone would not guarantee eligibility for actual-emissions treatment under CBAM.
Companies are expected to assess qualifying electricity economics on an hourly basis where rules require hourly matching. A potential value per qualifying megawatt-hour can be assessed by comparing CBAM certificate exposure calculated using an applicable default emissions factor with exposure based on verified emissions values of the generating installation.
The difference would need to be weighed against added costs for scheduling controls, data retention, verification and contract administration. Where benefits do not cover those costs, relying on applicable default treatment may be commercially preferable to maintaining a bespoke compliance chain.
Relevance for Western Balkans market integration
The issue is described as particularly relevant to the Western Balkans, where regional electricity integration is advancing alongside continued centrality of cross-border interconnections in commercial trading. A CBAM framework accommodating both explicit and implicit capacity allocation could help exporters participate in coupled markets without automatically losing access to installation-specific emissions treatment due to market design.
Preparation is highlighted for Nominated Electricity Market Operators (NEMOs), TSOs, exchange traders, utilities, aggregators and EU electricity importers. Data systems introduced during this period should capture exchange and allocation information in formats that can be mapped to generating-plant output and importer declarations.
This approach is intended to preserve an audit trail as borders transition from explicit capacity arrangements toward implicit allocation. Companies are also advised against building compliance systems that depend exclusively on one capacity-allocation method when market arrangements may evolve.
Transition from current rules to amended legislation
The Commission proposal, together with positions of the Council and European Parliament, can inform scenario analysis and contract planning. Proposed provisions must not be applied to current declarations before relevant amending legislation takes effect.
A two-scenario model is described as a way to separate nomination and evidence requirements applicable to 2026 imports from those that may apply under the amended framework. This would allow preparation of data systems and conditional contract clauses without treating a legislative proposal as an existing entitlement.
The compliance file should use consistent underlying records across electricity procurement, generation, customs and finance. This would enable commercial managers and verifiers to understand the emissions claim, operational evidence supporting it, and conditions under which results could change.
Before finalising transactions or reporting periods, companies should connect contract terms with generating installation details, meter readings, schedules and cross-border records while documenting who approves each assumption. A fallback should also be established for situations where preferred emissions treatment cannot be substantiated.
Defining that fallback in advance is described as a way to identify potential exposure before challenges by a verifier, customs authority or authorised CBAM declarant. It is also intended to support subsequent price adjustments, verification changes and management reporting as needed.
Market coupling is pushing CBAM electricity rules toward an evidence model reflecting how capacity is allocated in integrated markets. The current nomination requirements nevertheless remain applicable until the amendment is adopted.