Reporting actual electricity emissions under the EU carbon border adjustment framework depends on demonstrating network conditions between a generating installation and the EU electricity system. One of the most challenging elements of the current CBAM route involves meeting those requirements. A proposed legislative reform could alter the congestion-related requirement, with potential implications for cross-border electricity traders and exporters in South-East Europe.
Current CBAM electricity rules require congestion and nomination conditions
Under the existing framework, electricity importers seeking to use actual emissions values must meet cumulative conditions. These include elements tied to the physical power purchase agreement, network congestion, and electricity nominations. The combination of these requirements can create practical difficulties for commercial parties documenting electricity flows across multiple borders or complex transmission networks.
The European Commission’s reform proposal would adjust parts of this framework. It reflects concerns that physical congestion information can be difficult for commercial parties to obtain and may not be within an importer’s control. The potential impact is described as particularly relevant for exporters in South-East Europe that rely on multi-border trading arrangements and complex network routes.
COM(2025) 989 proposes changes to electricity treatment
COM(2025) 989 remains a proposal and would materially change how electricity is treated under CBAM. The text includes changes to the methodology for electricity default values. It also addresses aspects of the conditions for using actual emissions values.
The proposal further expands the concept of physical power purchase agreements to include intermediaries. It also sets out a revised congestion and nomination framework for electricity reporting. The Council adopted its negotiating position on 12 June 2026, while the European Parliament adopted its position on 15 September 2026.
Downstream expansion to steel and aluminium remains part of the same file
The same legislative file also proposes expanding CBAM downstream from 2028 to selected steel- and aluminium-intensive goods. Both institutions support broader coverage, but their proposed product lists differ. Those lists remain subject to negotiation.
Until final legislation is adopted, the existing scope continues as the operating baseline for CBAM coverage. Companies therefore continue working under current rules while interinstitutional negotiations proceed. The proposal is still under discussion and must not be treated as enacted law.
Evidence requirements and legal registers remain important
Traders and lenders are advised to maintain a version-controlled legal register distinguishing binding legislation, Commission guidance, and assumptions used for future scenarios. The aim is to prevent a regulatory benefit from being incorporated into contract prices before it becomes legally available. This approach is presented as relevant even if congestion testing becomes less restrictive.
The source material states that relaxing a congestion test would not replace installation, contractual, and import evidence required under applicable rules. It also specifies that Guarantees of Origin (GoOs) or generic renewable electricity portfolio claims would not serve as substitutes for that evidence. Companies are therefore expected to keep current evidence arrangements until legislation changes.
Operational preparation includes modular PPA schedules and updated calculation tools
Electricity traders, exporters, and project developers can prepare for possible legislative changes without assuming outcomes. The proposal described includes using modular PPA schedules, version-controlled calculation engines, and data fields able to support both current and revised methodologies. This preparation is intended to make implementation more efficient once final requirements are known.
The European Commission published definitive-period sector guidance on 14 August 2026, including dedicated guidance for electricity, iron and steel, and aluminium. It refreshed its general CBAM questions and answers on 15 October 2026. These documents are described as explaining implementation but not replacing binding regulation and implementing acts.
Guidance points to transaction-specific effects if rules are adopted
If adopted, a less restrictive framework could make renewable electricity supply more attractive to EU industrial buyers, including steel and aluminium producers. The commercial benefit is described as depending on final legal provisions and their application to specific transactions. The material also notes that policy-sensitive investments should preserve flexibility while maintaining current-law controls until an adopted rule changes them.
Regulatory reform is described as potentially reducing friction, but its value would depend on enacted provisions rather than expectations that rules will change. The discussion links any operational impact to how revised requirements apply in practice once legislation is finalized.