From 2026, electricity imports into the EU will be subject to CBAM reporting and, over time, cost exposure linked to the emissions intensity of the exporting system unless verifiable low-carbon origin is demonstrated. The approach is expected to affect trading economics for non-EU exporters supplying EU markets, particularly during high-price periods. January’s cross-border flow pattern highlighted a compliance and cost asymmetry that market participants are already positioning for.
CBAM reporting and emissions intensity for cross-border electricity
Under the EU framework described in the source material, electricity imports will face reporting requirements starting in 2026. Over time, cost exposure is tied to the exporting system’s emissions intensity unless low-carbon origin can be verified. This creates a mechanism in which compliance outcomes can diverge from wholesale price signals.
The source material links this shift to how power flows are priced and attributed across borders. It notes that flows from non-EU Western Balkan systems into EU markets during peak hours may be emissions-weighted at system-average intensity rather than reflecting the marginal unit producing power at a given moment. The distinction is presented as a key factor for future cost exposure.
January flows from Bulgaria to Romania and implications for certification
January’s flow patterns are cited as an example of how generation mix can affect CBAM-related risk. Bulgaria exported more than 400 GWh of electricity into Romania during the month. The exports were described as largely underpinned by nuclear and hydro generation.
The source material states that such flows are structurally low-emission and, if properly certified, would carry minimal CBAM exposure. It contrasts these conditions with scenarios where exports may be treated differently under CBAM default emissions factors when granular attribution or aligned documentation is not available.
Serbia and Bosnia exports where coal or gas can be marginal
In January, Serbia and Bosnia and Herzegovina were described as physically exporting electricity into EU-linked systems at times when domestic marginal generation was coal or gas. The source material highlights that, without granular emissions attribution or aligned Guarantees of Origin, these exports risk being classified under CBAM using default emissions factors. The potential range cited is more than 400–700 kg CO₂/MWh, depending on methodology.
The same section links those default-factor outcomes to potential cost impacts using carbon prices implied by EU ETS levels. It states that this could translate into a €30–70/MWh CBAM cost layered on top of wholesale power prices. The material frames this as a risk tied to how exports are attributed rather than how they are physically delivered.
Montenegro’s hydro-heavy system versus certification integration
The source material describes Montenegro as having an overwhelmingly hydro-based system in physical terms. It also says that exports may still be treated as carbon-intensive by default if there is not deep integration into EU-recognised certification and emissions accounting frameworks. January’s observed price dispersion on MEPX is cited as not reflecting this risk.
Forward contracting behaviour is described as increasingly aligning with the compliance risk rather than with short-term price signals. The material presents this as a sign that market participants may begin pricing CBAM-related uncertainty into contract structures even when spot price patterns do not show it.
Peak-hour procurement risks for industrial buyers and traders
The source material describes an asymmetric risk for industrial buyers importing electricity during peak scarcity hours. It states that prices already exceed €200/MWh in those periods and that embedded carbon costs may not be visible in the power price itself. It characterizes the result as a shift from short-term procurement decisions to longer-term compliance exposure.
For traders, CBAM is described as introducing basis risk between physical power flows and financial outcomes. The source material states that a trade profitable on a price spread can become loss-making once emissions attribution is applied. This is said to be especially acute when sourcing from mixed or fossil-heavy systems and selling into EU markets without certified low-carbon attributes.
Nuclear and hydro systems versus mixed-generation exporters
The material concludes that January confirms a durable advantage for EU-integrated nuclear and hydro systems under the described CBAM-linked accounting approach. It states that Bulgaria and Romania can export not only energy but also compliance certainty if certification aligns with low-emission claims. Western Balkan systems are described as facing potential carbon premiums even when physically exporting surplus power.
It also states that the next two years may see changes in flow economics, including a preference for long-term contracts with explicit emissions attribution and reduced reliance on spot-only trading strategies. The source material further asserts that high-price hours will correspond to high-carbon-risk hours unless backed by certified low-carbon origin, based on January trading patterns.