Industrial electricity procurement in Southeast Europe and neighbouring export markets has long been shaped by price, volume, tenor and credit. Industrial buyers sought affordable power, while producers looked for bankable offtake. Traders monetised volatility, spreads and balancing risk. That market is now changing.
The European Commission’s latest technical work on indirect emissions under the Carbon Border Adjustment Mechanism (CBAM) indicates that electricity used by industrial producers will need to be proven rather than treated as a simple purchase-and-settle item. The documentation must be usable by EU importers inside CBAM declarations and credible enough for verification. Where producers want to claim actual low-carbon electricity instead of relying on a default grid factor, supporting evidence may become as important as the physical power itself.
The issue sharpened on 8 June 2026, when DG TAXUD published a technical study on indirect emissions in CBAM. The study is organised around three questions: how to determine operational default emission factors for indirect emissions; when declarants can claim actual indirect emissions, including requirements for direct technical links, power purchase agreements and verification; and whether indirect-emissions coverage could extend to additional CBAM sectors.
Green electricity claims versus CBAM-verifiable low-carbon electricity
A key distinction highlighted in the technical work is between green electricity as a marketing claim and low-carbon electricity as a CBAM evidence file. A renewable power purchase agreement can support decarbonisation, cost hedging and ESG positioning for an industrial company. Under CBAM, however, the question becomes whether the electricity claim can be used to calculate actual indirect emissions for goods entering the EU.
The same evidence questions apply to reliance and verification: whether an importer or authorised CBAM declarant can use the claim, whether a verifier can check it, and whether power consumption can be allocated to the specific installation, process and product line producing CBAM goods. DG TAXUD’s focus on direct technical links, PPAs and verification implies that not all green electricity arrangements carry the same CBAM value.
A behind-the-meter renewable asset with clear metering and a direct technical link to an industrial installation may have stronger evidentiary weight than an ordinary supply contract. A PPA with robust settlement data, certificate cancellation, production matching and verifier access may be more valuable than a generic renewable certificate procured after the fact. In this setting, industrial buyers increasingly ask not only about price but also whether the electricity can reduce CBAM exposure and whether it can be proven.
Traders as data and evidence managers in CBAM-linked power
Traders are often positioned as intermediaries in power markets, but under the emerging CBAM-linked framework they take on roles related to data and evidence management. Industrial buyers are expected to require power products combining physical or financially settled supply with renewable or low-carbon attribution. Additional layers include metered consumption records, production-period alignment and certificate or guarantee-of-origin control.
The framework also points to balancing and residual supply treatment, audit access, and documentation that can be transferred into the importer’s CBAM file. A trader able to assemble power from multiple producers, manage balancing, document certificate flows and reconcile metered consumption into a CBAM-ready data package may become more valuable than one focused only on price execution.
The trader’s role is described as similar to a structured-products desk that packages energy, certificates, shape, balancing, traceability and verification support into one industrial supply solution. This approach is described as especially relevant in Southeast Europe where volatility is already intense. In Week 23 of 2026, SEE electricity demand rose 8.2% week on week to 15.15 TWh while variable renewable output fell 8.9%, with wind down 15.5% and solar down 5.1%.
During the same week hydro rose 10.1% and thermal generation increased by 24.5%. Net imports rose 9.1% to 1.22 TWh, indicating reliance on cross-border balancing. The volatility is linked to the need for electricity contracts that address hourly shape, residual supply, balancing exposure and the carbon character of power consumed during production rather than relying on annual averages.
Default emission factors and contract design for evidence
The first DG TAXUD study question on operational default emission factors is described as crucial for energy markets. A default factor is presented not only as a technical fallback but also as a potential commercial penalty when actual low-carbon electricity use cannot be proven. If an industrial exporter cannot demonstrate actual low-carbon electricity consumption, an EU importer may have to rely on a default emissions factor.
For producers operating in carbon-intensive grids, reliance on defaults could reduce competitiveness of exported cement, fertiliser, steel derivatives or aluminium products among other affected goods. This creates incentives for industrial buyers to procure electricity in ways that reduce the risk of falling back on defaults. For suppliers, it shifts messaging from general renewable supply claims toward providing data architecture capable of supporting an actual indirect-emissions claim.
The described architecture includes metering systems, settlement records, generation certificates, PPA documentation, grid connection evidence and time-matching logic alongside treatment of residual consumption. Power suppliers are expected to provide a compliance appendix alongside commercial contract terms in practical terms described within the study’s framing.
Direct technical links and verification-focused PPAs
A direct technical link is identified as likely to become one of the strongest forms of evidence for industrial buyers seeking recognition of low-carbon electricity use under CBAM requirements. For renewable developers this opens a premium segment involving dedicated solar, wind, hydro, biomass or hybrid plants serving CBAM-exposed industrial sites. The value described extends beyond electricity pricing toward potential reductions in embedded-emissions exposure and support for EU market access while strengthening supply-chain credibility.
This structure is also described as improving PPA bankability because it can strengthen offtake terms for developers while providing lenders with more strategic contracting conditions. For industrial buyers such as cement producers, fertiliser plants, metals processors or hydrogen producers facing scrutiny over electricity used in production of CBAM goods, willingness to pay for robust direct-supply structures is described as part of the emerging market signal.
Battery storage is also positioned within this evidence framework because solar output may not match an industrial load curve. A battery can shift renewable output into more relevant consumption periods while reducing residual grid draw and strengthening credibility of the supply profile. In this context battery energy storage systems are described as potentially part of an evidence strategy rather than only flexibility provision.
The standard PPA is described as insufficient under these requirements because a CBAM-ready PPA should include clauses covering data ownership and access rights plus metering hierarchy. It should address certificate transfer or cancellation, settlement-period matching and residual electricity treatment including curtailment handling. Additional provisions referenced include outages, replacement power arrangements, balancing responsibility and verifier access together with clear definitions of what buyers can claim and what sellers guarantee through delivered documentation.
CBAM definitive regime details affecting indirect emissions coverage
The Commission’s CBAM page states that the definitive regime started on 1 January 2026. It also states that EU importers or indirect customs representatives importing more than a single mass-based threshold of 50 tonnes of CBAM goods must apply for authorised CBAM declarant status. The page further states that CBAM certificate prices are calculated from EU ETS allowance auction prices quarterly in 2026 and weekly from 2027.
The definitive-period treatment of indirect emissions is described as narrower than transitional reporting experience. A Publications Office summary for Task 2 notes that CBAM covers direct production emissions and that for cement and fertiliser goods it covers indirect emissions from electricity consumed to produce CBAM goods; during the transitional period indirect emissions were reported for all CBAM goods except electricity.
DG TAXUD’s third study question addresses whether and how indirect-emissions coverage could extend to additional CBAM sectors beyond those currently covered in the same way during definitive reporting periods. Steel, aluminium, hydrogen and downstream processing chains are referenced as areas that should not ignore electricity data even if some indirect emissions are not yet chargeable in the same manner.
The Task 3 publication places the issue within a wider EU carbon-leakage framework including the EU ETS Directive plus free allocation mechanisms and auctioning revenues along with indirect cost compensation for electro-intensive industries. Any extension of CBAM indirect-emissions coverage would need interaction with how EU producers are treated regarding carbon costs passed through electricity prices.
Southeast Europe volatility and gas price risks shape procurement needs
The framework is described as commercially urgent due to power-market volatility in Southeast Europe and wider Europe even though evidence would also matter in stable markets. Week 23 trends show fragmentation across regional prices: Italy averaged €128.09/MWh while Bulgaria averaged €100.83/MWh; Hungary €103.15/MWh; Greece €89.25/MWh; Serbia €99.63/MWh; Croatia €99.29/MWh; with Türkiye at €22.53/MWh.
Gas risk adds another layer through impacts tied to fuel markets referenced alongside power pricing trends. TTF gas futures averaged €48.56/MWh during the first week of June while one-month forward contracts traded near €49.335/MWh according to the report cited in the source material. The report also warns that European gas markets remain vulnerable to LNG disruption, storage risk and competition for cargoes.
For industrial buyers this results in three linked purposes for procurement: price hedging alongside decarbonisation objectives plus CBAM evidence requirements tied to proof of low-carbon supply during production periods rather than only certificates or annual averages alone.
Operational preparations by generators traders storage operators
Power producers are expected to prepare for buyer demands focused on documentation at least as intensively as pricing terms offered under contracts linked to CBAM evidence needs. Renewable producers are expected to provide asset-level generation data plus metering records along with certificate issuance and cancellation evidence including curtailment logs and outage reports tied through contractual linkage to industrial buyers.
Where possible renewable developers are expected to design direct technical link projects or behind-the-meter solutions for sites exposed under CBAM requirements described within this framing. Hydro producers are expected to document generation origin dispatch periods and certificate treatment since hydro can match non-solar load profiles but only if attributes remain traceable without double-counting.
Thermal producers face different expectations because buyers may treat fossil-based residual supply as a liability unless it is explicitly separated priced and disclosed within contract structures tied to evidence needs described here. Storage operators are expected to position batteries as compliance-supporting flexibility assets because BESS can help renewables match industrial demand reduce exposure to fossil-heavy evening power patterns referenced within this framing while improving delivery shape under PPAs.
Trader systems requirements: reconciliation documentation verifier access
Traders are expected to prepare systems able to reconcile generation consumption certificates schedules and imbalances while providing monthly evidence packs that industrial buyers can pass onward into EU importers’ processes referenced within this framing. They are also expected to manage residual electricity transparently avoid double-counting renewable attributes and distinguish which parts of supply structures are physical contractual or purely financial components.
A CBAM-ready trader offering options referenced includes structured renewable PPAs plus sleeving services along with balancing shaping storage optimisation certificate management residual mix disclosure plus hourly or settlement-period reporting importer-facing documentation verifier cooperation and audit-ready data rooms.
Five evidence questions demanded from industrial buyers
Industrial buyers are described as increasingly demanding contracts that answer five questions related directly to proof usable inside CBAM declarations tied to production periods rather than generic claims alone. First they need information on what electricity was consumed during production of CBAM goods. Second they need an emissions factor attached to that consumed electricity.
Third they need clarity on whether claims rely on default factors actual factors PPAs direct technical links or blended methods used under contract structures referenced here. Fourth they need reconciliation between electricity evidence production volumes and product-level allocation so that consumption can be attributed correctly across outputs producing imported goods subject to CBAM processes.
Fifth, they need confirmation that an EU importer or authorised CBAM declarant can use the evidence safely inside their CBAM declaration. Any producer or trader unable to answer these questions is described within this framing as selling a weaker product relative to emerging buyer requirements tied to indirect emissions proof needs under DG TAXUD’s study structure.
Elevated by CBAM.Clarion.Engineer