The European Parliament adopted its negotiating position on a broader Carbon Border Adjustment Mechanism revision on Sept. 15, approving the text by 464 votes to 50 with 159 abstentions. The vote opened negotiations with EU member states on the final legislation. The changes are aimed at simplifying elements of how electricity is treated when imported into the EU as a CBAM good.
For Serbia’s electricity market, the most significant adjustments relate to the methodology used for electricity imported into the EU under CBAM. The proposed framework would remove a current requirement tied to demonstrating conditions on the physical route to the EU. It would also adjust how certain contract structures and nomination rules are handled, alongside changes to how country default values are calculated.
CBAM electricity methodology changes under negotiation
The proposed approach would delete the current requirement to show that there is no physical network congestion along the route to the EU. It would also provide more flexibility for physical power purchase agreements that involve traders and other intermediaries. In addition, nomination rules would be adapted for markets using implicit capacity allocation and market coupling.
The reform package would also change the methodology used to calculate country electricity default values. None of these changes is yet binding law. For electricity exported during 2026, Serbian generators, traders and their EU counterparties are expected to continue building evidence under existing rules while preparing for a potentially simpler framework.
That timing creates a compliance challenge for 2026 flows, because transactions must be documented using today’s methodology while EU negotiations could affect how those same imports are treated in the first definitive-period CBAM declarations. The evidence requirements therefore have to be met against current rules even as legislative outcomes remain uncertain.
Current conditions for actual embedded emissions claims
Under the current electricity methodology, claiming actual embedded emissions instead of using a national default factor requires multiple conditions to be satisfied at the same time. The electricity must be linked to a qualifying physical power purchase agreement, and the generating installation must remain below a required emissions threshold.
The production and firm nomination must correspond within the required hourly period. In addition, the exporter must satisfy a network condition tied to physical congestion along the route. For Serbian renewable projects, this network test has been described as one of the hardest requirements to operationalise.
A wind or solar producer can control generation meters, SCADA records and plant documentation. A trader or balance responsible party can retain nominations, cross-border capacity and settlement records. An EU importer can document customs entries and its CBAM declarant identity.
Evidence showing, retrospectively and hour by hour, that physical network congestion did not prevent the claimed route is harder to control because transmission-system operator information and market infrastructure data are central to it. The proposed reform would remove that congestion condition if retained in final legislation.
Verification focus shifts from network checks
If kept in final legislation, removing the congestion condition would address a major verification bottleneck for Serbian electricity moving toward EU markets. The reform would not eliminate evidence requirements altogether. Instead, verification would shift toward demonstrating a coherent relationship between key elements of each claim.
The verification focus would move toward linking the named generator, contract terms, hourly generation output, trading route, allocation to the EU buyer and the final CBAM declaration. In this structure, traceability remains central even if one specific verification hurdle is removed.
Intermediary contract chains and hourly data
The proposed reform is also relevant because Serbian renewable electricity is rarely exported through a single bilateral arrangement involving only one generator and one EU importer. Transactions often involve multiple parties across contracting and trading stages. The chain described includes a Serbian RES producer moving through suppliers or traders and balance responsible parties before reaching cross-border markets and then an EU trader or importer tied to an authorised CBAM declarant.
The current methodology can make intermediary structures difficult to align with an actual-emissions framework. Under the proposed changes, intermediaries within a PPA chain could be accommodated if there is a verifiable contractual relationship linking the electricity producer, intermediary or intermediaries, and either the EU importer or authorised CBAM declarant.
Greater contractual flexibility would not remove traceability requirements for verification purposes. A verifier would still need to establish that quantities claimed by an EU declarant can be traced back to an identified Serbian generating installation for the relevant period without double counting. The critical test becomes whether each quantity can be reconstructed through commercial and operational documentation across the chain.
Nominations under explicit capacity and market coupling
Even under a simplified regime, hourly data is expected to remain central for actual-emissions claims. For Serbian renewable generators, evidence architecture is expected to connect installation details through meter readings and production hours into PPA documentation and trader allocations before reaching cross-border transactions and then EU importer or declarant records tied to verified quantities.
Where explicit cross-border capacity is used, nomination evidence remains important. Where electricity moves through markets using implicit allocation and market coupling, the amended methodology is expected to recognise that traditional bilateral nomination models do not fully reflect how those markets operate.
This could become more significant as Serbian and regional markets deepen integration with EU day-ahead and intraday market coupling. As a result, CBAM evidence systems are expected to record whether delivery occurred via explicit capacity allocation or implicit market coupling while retaining producer-specific and declarant-specific information needed for verification.
Guarantees of Origin do not replace emissions evidence
The reform should not be interpreted as making Guarantees of Origin sufficient for CBAM purposes. A Guarantee of Origin can demonstrate renewable attributes associated with electricity. However, actual emissions claims require an evidence chain linking emissions values to a relevant generating installation and to electricity claimed by an EU declarant.
For Serbian renewable producers, value in this context is described as more than green MWh alone; it also includes a verifier-ready evidence package. That package can include plant identity, meter hierarchy, hourly generation records, PPA chain documentation, trading allocation details, relevant nomination records, EU declarant information and emissions information accepted by an accredited verifier.
Contractual information flows toward EU declarants
EU authorised CBAM declarants remain responsible for making CBAM declarations under the system described. Much of the information needed to support declarations originates outside the EU. This implies that EU importers and traders may increasingly seek contractual rights to obtain data from Serbian generators and trading counterparties.
CBAM-related clauses are therefore likely to migrate into electricity PPAs and trading agreements alongside standard provisions covering price, delivery, balancing, credit and settlement. Requirements listed for Serbian counterparties include installation identification; meter and generation records; Monitoring Plan information; verified emissions data; hourly allocation data; PPA evidence; trading and nomination records; documentation supporting relevant cross-border routes; and cooperation with an accredited EU verifier.
Default factors based on broader grid mix
The proposed reform would also change how default values for electricity are calculated under CBAM methodology. Rather than relying on a factor focused on fossil electricity generation alone, it would use an average grid emissions factor reflecting a wider electricity mix that includes renewable generation.
For Serbia, this could matter even when an exporter cannot meet all conditions needed for actual emissions claims. A cleaner national generation mix could gradually lower default CBAM emissions values applied to Serbian electricity over time according to this approach described in negotiations materials.
The change is described as creating two commercial pathways: exports using applicable Serbian default factors versus exports linked to specific renewable installations supported by sufficient evidence enabling use of lower verified actual-emissions values. The difference between these pathways could eventually influence pricing in electricity contracts as well as PPA negotiations and trader margins.
Verification system timeline from September 2026
The legislative changes are being negotiated while parts of the EU verification system become operational. Accredited CBAM verifiers are entering the Registry system from September 2026 according to the timeline described. Installation reviews, Monitoring Plan assessments, evidence testing and site visits are expected ahead of first definitive-period verification reports in 2027.
For Serbian exporters, waiting until annual declaration cycles could create risk because meter data, nominations, allocations and contractual evidence are generated continuously while missing records may be difficult or impossible to recreate later months afterward. A practical approach described involves running pre-verification during the reporting year so that evidence chains can be tested against what an EU verifier’s review might require before final assurance engagements.
The reform package is presented as potentially making positioning of Serbian renewable electricity in the EU market easier by removing congestion-evidence requirements from current methodology elements while recognising intermediary PPA structures and aligning nomination expectations with market coupling approaches where relevant delivery occurs. Traceability remains central throughout because verification depends on demonstrating where power was produced when it was produced under which contractual chain it was delivered which EU declarant received allocation and which accredited verifier accepted underlying evidence.
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