The European Commission, in COM(2025) 989, has proposed revising the default-emissions methodology used for imported electricity under the EU Carbon Border Adjustment Mechanism (CBAM). The proposal includes moving toward an average grid emissions factor rather than a factor based only on fossil sources that set electricity prices. The change would affect how default calculations reflect grid characteristics for imported power.
If adopted, the revised approach could change the relative economics of electricity imports from countries expanding renewable generation. Grid decarbonisation could influence the default calculation more directly. This could reduce the gap between imports assessed using default values and imports that qualify for installation-specific actual emissions values.
CBAM electricity coverage and current compliance timeline
The definitive CBAM regime has applied since 1 January 2026. Electricity is covered under CN 2716 00 00. The mass-based de minimis exemption introduced through the 2025 simplification does not remove electricity imports from the mechanism.
For 2026 imports, CBAM certificate sales are scheduled to start on 1 February 2027. The first annual declaration and certificate-surrender deadline is set for 30 September 2027. From 2027, the general certificate-pricing mechanism moves to weekly averaging of auction prices.
Also from 2027, quarterly holding requirements become part of the treasury cycle. Companies therefore need to plan for the financial implications of CBAM. They also need to separate when compliance obligations arise from when regulatory changes might be enacted.
Implications for Western Balkan electricity exports and industry
The proposed methodology has implications beyond electricity trading for Western Balkan countries. The document links potential effects to faster renewable deployment, coal displacement, and improved grid integration. These factors could influence carbon competitiveness of electricity exports.
The same developments could affect broader investment conditions for power-intensive industries. The source material cites steel and aluminium as examples of sectors with wider investment implications. A lower national grid emissions factor could become more commercially relevant if average grid emissions are incorporated into the default route.
The extent of any advantage would depend on the final methodology adopted. It would also depend on country-specific values applicable to the relevant reporting period. Those values would determine how any grid-related effect is reflected at the EU border.
Financial modelling and treasury decisions under possible methodology changes
Companies are advised not to incorporate proposed emissions factors into base-case financial models before the revised methodology is legally adopted. The source material also specifies that applicable country values would need to be published first. Sensitivity analysis is presented as an alternative approach.
Sensitivity analysis can be used to show how different assumptions about grid emissions might affect electricity costs, export competitiveness, and investment returns. The same approach is described as relevant for treasury and investment decisions. It includes timing considerations for carbon-price hedges, electricity contracts, and capital expenditure.
The guidance in the source material states that accounting and compliance treatment should remain anchored in rules currently in force. It also notes that flexible contract structures and retained source data can support quicker responses once final methodology details are clear. This is intended to preserve options without prematurely recognising expected benefits.
Commission guidance on implementation alongside binding rules
The European Commission published definitive-period sector guidance on 14 August 2026. The package included dedicated guidance for electricity, iron and steel, and aluminium. It also refreshed general CBAM questions and answers on 15 October 2026.
The materials explain implementation but do not replace binding regulation and implementing acts. For policy-sensitive investments, the governing principle described is maintaining current-law controls until an adopted rule changes them while preserving flexibility for reform. The source material adds that only the enacted CBAM methodology determines how much grid-related advantage is recognised at the EU border.