Brussels, October 27, 2026 — The European Commission has proposed removing the physical-network congestion test from the EU’s Carbon Border Adjustment Mechanism (CBAM) electricity rules. The change could make it easier for renewable generators in the Western Balkans to qualify for actual-emissions treatment when exporting electricity to the European Union.
The proposal focuses on a condition that requires demonstrating that no physical network congestion existed between a third-country generating installation and the Union transmission system during the relevant export period. Under the current framework, this requirement is one of the most difficult elements for cross-border electricity transactions.
Congestion criterion under current CBAM electricity rules
Under the rules currently in force, electricity must either come from an installation directly connected to the Union transmission system. Alternatively, it must meet a condition that no physical network congestion existed at any point between the installation and the Union at the time of export.
The Commission’s strengthening proposal would delete this congestion criterion. The change is still subject to the legislative process and cannot yet be treated as an applicable compliance option for 2026 imports.
Cross-border traders, renewable developers, transmission system operators (TSOs), interconnector users and EU off-takers are expected to distinguish the proposed framework from existing requirements. The Commission proposal and positions of the Council and European Parliament can be used for contract design and scenario analysis, but amended rules must be adopted before any flexibility can be relied upon in a declaration.
Preparation approach using current and potential future requirements
A two-scenario approach would allow companies to prepare for possible reform while remaining compliant with current rules. Even if the congestion condition is removed, contractual and scheduling evidence would still be important for declarations.
Companies are also expected to plan for how evidence will be accepted by verifiers under either framework. The immediate task is to align documentation and operational data with whichever rule set applies at the time of reporting.
Why proving absence of congestion can be difficult
The existing test can be difficult to satisfy because individual generators and importers do not control the entire regional electricity network. Congestion may occur far from a generating plant and may be documented through data held by TSOs or market operators rather than by commercial parties themselves.
As a result, a project producing low-carbon electricity may have valid capacity rights and contractual documentation but still face uncertainty over whether a verifier will accept evidence that the required absence of congestion applied throughout every relevant period.
Removing this condition would remove one network-related obstacle outside direct control of the generator and importer. It would not remove other requirements, including establishing the origin of electricity, the qualifying contractual chain, relevant capacity allocation or market-coupling treatment, hourly production, and emissions from the generating installation.
Potential effects on cross-border renewable power purchase agreements
A less restrictive congestion test could make CBAM-related value in cross-border renewable power purchase agreements more predictable. Buyers may be reluctant to pay a premium for installation-specific emissions treatment when eligibility depends on grid conditions neither producers nor off-takers control.
Greater predictability could help developers and buyers incorporate potential value from verified low-emissions electricity into long-term pricing arrangements and project-financing assessments. The size of that benefit would depend on final legislation and on whether all remaining eligibility conditions can be substantiated.
For renewable projects, CBAM-related value is described as an additional revenue attribute rather than a basis for underlying energy economics. Lenders and developers can assess potential upside where contractual and evidentiary chains are credible while ensuring resilience if individual hours fail to qualify or if legal conditions change.
Western Balkans export corridors highlighted
The proposal could be particularly relevant to electricity exports from the Western Balkans. Northbound flows may use constrained transmission corridors towards Hungary, Croatia, Romania and Bulgaria.
Montenegro’s interconnector with Italy is also described as operating within its own capacity constraints. A framework emphasizing verifiable contractual and scheduling attribution rather than proving absence of physical congestion across an entire route could reflect operational realities in these markets.
For regional renewable developers and traders, the potential benefit would be reduced risk that otherwise qualifying electricity loses access to actual-emissions treatment due to a network condition outside parties’ control. The proposal does not guarantee qualification because remaining requirements would still need to be met.
Evidence reconstruction and retention for 2026 compliance
Companies can begin preparation by reconstructing one historical week of electricity transactions using records already held in their ordinary operating systems. The exercise should connect generating-plant output, meter data, schedules, cross-border records and allocation to the relevant buyer.
If reconstruction can be done consistently without relying on ad hoc emails, screenshots or staff recollection, it is more likely to scale. Identified gaps can guide improvements in data management before actual-emissions treatment is incorporated into commercial commitments.
Congestion evidence should continue being retained for 2026 compliance files. Rather than removing existing controls ahead of reform, companies are expected to design systems so that a core dataset can support both current rules and the proposed framework.
Linking operational records with customs and financial documentation
The compliance process should connect electricity purchasing, generation, customs and financial records. Using consistent underlying information enables companies to explain both claimed emissions figures and operational evidence supporting them, including circumstances that could change results.
The decision file before finalising a transaction or reporting period should link contract details with generating installation information, meter readings, schedule data and cross-border records. It should also identify who approves each assumption used in claims.
A documented fallback is also required if preferred emissions treatment cannot be substantiated. Defining fallback in advance helps identify potential exposure before challenges by a verifier, customs authority or an authorised CBAM declarant.