The European Union is moving towards a significant rewrite of the way imported electricity is treated under its Carbon Border Adjustment Mechanism, potentially removing one of the hardest evidence barriers for renewable power exporters while retaining a demanding chain of contracts, hourly data and independent verification.
The European Parliament on Sept. 15 adopted its negotiating position on a broader revision of CBAM by 464 votes to 50, with 159 abstentions, clearing the way for negotiations with EU member states on the final legislation. The package covers downstream industrial goods and anti-circumvention measures, but it also contains potentially far-reaching changes to the treatment of electricity imports. (europarl.europa.eu)
For electricity exporters in Serbia and the wider southeast European region, the most consequential part of the Commission proposal underlying those negotiations is not the expansion of CBAM to more manufactured goods. It is a planned simplification of the rules that determine when imported electricity can be reported using actual embedded emissions rather than a country default value.
The proposed changes would shift the electricity default methodology towards an average grid emission factor, allow physical power purchase agreements involving intermediaries, remove the current requirement to demonstrate either a direct connection to the EU transmission system or the absence of physical network congestion along the export route, and modify the firm-nomination test to reflect the distinction between explicit and implicit cross-border capacity allocation. (Eur-Lex)
Those changes are not yet law.
The existing CBAM electricity rules therefore remain the operating standard for 2026 exports, and companies seeking to use actual emissions still need to build evidence under the rules currently in force while monitoring the negotiations over the amendment.
That creates a two-track compliance problem for generators, traders and EU authorised CBAM declarants: prepare evidence under today’s stricter framework, but design the system so that it can adapt quickly if the revised electricity methodology is adopted.
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Congestion evidence could be the biggest change
Under the current definitive-period methodology, an EU importer seeking to use actual emissions for electricity imported from a non-EU country must satisfy several cumulative conditions.
The electricity must be covered by a qualifying physical PPA; the relevant generating installation must meet the emissions threshold; production and firm cross-border nomination must correspond within a period of no more than one hour; and the transaction must satisfy the network requirement.
Current implementing rules require either evidence of a direct connection between the generating installation and the Union transmission system or written evidence showing that, hour by hour, physical network congestion did not prevent the electricity route between the installation and the EU transmission system. (Eur-Lex)
For exporters in the Western Balkans, that requirement can be difficult to operate in practice.
A Serbian renewable generator may control its meter data, SCADA records and production schedule. A trader can retain its commercial positions, cross-border capacity allocations and nominations. An EU importer can control its declarant records and customs information.
But detailed historic evidence about congestion across potentially several transmission-system borders is generally held elsewhere in the electricity-market infrastructure.
The Commission acknowledged this problem in its December 2025 reform proposal, saying there were practical difficulties in demonstrating the absence of physical congestion at every point in the network at the time of import.
It therefore proposed deleting both the congestion condition and its direct-connection alternative. (Eur-Lex)
For electricity exporters, that would change the architecture of CBAM evidence materially.
Instead of attempting to establish a physical no-congestion path from an individual renewable installation through several interconnected markets, the verification exercise would move more heavily towards demonstrating a credible commercial and temporal link between a named generator, a qualifying physical PPA, the electricity delivered, the cross-border allocation mechanism and the authorised CBAM declarant.
That would not make CBAM electricity verification simple. It would change where the complexity sits.
Physical PPAs remain central, but traders gain more room
The Commission proposal also addresses another obstacle for southeast European power trading: intermediary structures.
The existing implementing methodology is restrictive where a trader or supplier stands between a renewable generator and the EU authorised CBAM declarant.
The Commission now proposes explicitly allowing PPAs involving intermediaries, provided there is a verifiable contractual relationship between the electricity producer, the intermediary or intermediaries and the importer or authorised CBAM declarant for the electricity for which actual emissions are claimed. (Eur-Lex)
That distinction matters in the SEE market.
Renewable electricity is rarely exported through a structure in which the generating company itself acts as the sole cross-border trader, capacity holder, balancing party and EU importer.
A more typical chain can involve:
RES producer → supplier or trader → balance responsible party → cross-border market → EU trader/importer → authorised CBAM declarant.
A CBAM methodology that recognises an intermediated physical contractual chain would therefore sit more naturally alongside how electricity is commercially traded.
But intermediary participation would not remove the need for traceability.
The key question would become whether the full contractual chain can resolve the electricity being claimed back to the specific generating installation and reporting period without duplicate allocation.
In practical terms, this means that a trader-mediated PPA should not become a generic green-power claim.
The verifier would still need to be able to determine which plant generated the electricity, which hours are being claimed, how much electricity is allocated to the declarant and whether the same volume has been assigned elsewhere.
Hourly matching remains at the centre
The reform also changes the treatment of cross-border nominations.
The Commission’s proposal says the firm-nomination condition should be modified so that it applies in the context of explicit capacity allocation, while recognising the different mechanics of markets where transmission capacity is allocated implicitly through market coupling. The Commission’s explanatory text says firm nomination should not be required in the same way where transmission capacity is allocated through implicit allocation. (Eur-Lex)
This distinction is particularly relevant as southeast European electricity markets become progressively more coupled with EU day-ahead and intraday markets.
Physical electricity trading in a coupled market does not necessarily produce the same bilateral capacity and nomination records as an explicit cross-border transaction.
The proposed reform is an attempt to reconcile CBAM with that market design.
But the underlying verification issue does not disappear.
An exporter claiming the emissions characteristics of electricity from a specific renewable installation still needs a defensible link between the electricity generated and the electricity allocated to the CBAM transaction.
That keeps hourly generation data, metering integrity and controlled allocation at the centre of the process.
For renewable generators, the future evidence standard is therefore likely to remain far more demanding than a Guarantee of Origin.
A certificate can demonstrate an environmental attribute. It does not, by itself, establish the entire CBAM evidence chain required to support the actual emissions of electricity imported as a CBAM good.
Default values would also change
The reform has another consequence for exporters that do not, or cannot, qualify for actual emissions.
The Commission proposes replacing the present fossil-generation-based concept used for country electricity default values with a weighted average CO2 intensity of electricity generated within the relevant geographic area.
That means renewable generation would influence the country’s default electricity factor rather than being largely outside the calculation.
The Commission said the approach would better reflect the decarbonisation of exporting electricity systems. (Eur-Lex)
For Serbia and other Western Balkan markets, this could become commercially important even for electricity not supported by producer-specific actual-emissions evidence.
A power system’s renewable and low-carbon generation mix could increasingly influence the CBAM default position available to its electricity exports.
That creates two distinct carbon values in the market.
The first is the country-level CBAM electricity factor.
The second is the potentially lower installation-specific verified emissions value available where the exporter and declarant can satisfy the actual-emissions rules.
That distinction is likely to become more important in contracting and power valuation.
A renewable plant able to provide an audit-ready actual-emissions package could offer something different from electricity whose CBAM exposure remains linked to the national default factor.
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Parliament vote moves reform into negotiations
The Sept. 15 vote is significant because Parliament can now negotiate the final text with the Council, which agreed its general approach on the CBAM strengthening package on June 12.
The Council said at the time that the legislation should extend CBAM to downstream products, strengthen anti-circumvention controls and improve technical rules for attributing emissions to electricity. It said negotiations should seek agreement before the end of 2026. (consilium.europa.eu)
The final electricity language could still change during those negotiations.
The Parliament also added an exemption for certain electricity flows from non-EU countries used by grid operators to maintain network stability, showing that electricity remains an active negotiating area rather than a settled technical annex. (europarl.europa.eu)
Until a final regulation is adopted and enters into force, companies cannot rely on the proposed relaxation.
For 2026 transactions, the conservative approach remains to preserve all evidence required by the current legislation.
That includes PPA documentation, metering and generation records, network and congestion evidence where required, interconnection capacity and nomination records, emissions calculations, allocations to individual declarants and the monthly evidence chain expected by the verifier.
Verification is becoming operational now
The legislative reform is arriving just as the EU’s separate verification infrastructure moves from regulation into operation.
The European Commission published its definitive-period guidance for CBAM verifiers and National Accreditation Bodies on Aug. 24, followed by procedures for accredited verifiers to obtain access to the CBAM Registry.
Accredited verifiers can register in the Registry from September 2026, while the Commission expects the first verification work — including document reviews and site visits — to begin during 2026. First verification reports can be issued through the Registry from January 2027. (Taxation and Customs Union)
That timing is crucial.
The debate over the future electricity rules should not be interpreted as a reason to delay evidence preparation.
An EU authorised CBAM declarant intending to use actual emissions for 2026 electricity needs information generated during the reporting year, and a verifier needs to be able to trace the relevant data back to the non-EU installation.
Reconstructing that chain after the year has closed can be difficult, particularly where evidence comes from traders, balance responsible parties or transmission-system operators.
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Serbia’s opportunity is mostly an evidence question
Serbia has a growing renewable portfolio and is physically interconnected with several EU and Energy Community electricity markets.
But under CBAM, low-carbon production alone does not determine the treatment of an exported MWh.
The commercial advantage of actual emissions depends on whether the renewable origin can survive the entire chain from generation to EU declaration.
For a Serbian wind or solar generator, that means preserving a controlled relationship between:
the generating installation, settlement-quality meter data, hourly production, the physical PPA, the trader or intermediary chain, cross-border delivery evidence, the authorised CBAM declarant and the verifier’s final conclusion.
Under the current regulation, the chain also includes the stricter network and firm-nomination tests.
Under the proposed reform, some of those requirements could become easier, particularly the congestion condition and intermediary PPA architecture.
But the underlying principle is unlikely to disappear: the actual emissions claim must still be attached to identifiable electricity rather than a general renewable portfolio.
That is why pre-verification is becoming commercially relevant before statutory verification itself.
Generators and suppliers can test whether their systems, contracts and trading arrangements can produce the evidence a verifier will require while there is still time to amend operating procedures.
Importers remain responsible
The reform does not change the central allocation of CBAM responsibility.
The non-EU producer generates and reports installation emissions data.
The accredited verifier independently checks the monitoring methodology, emissions calculations and supporting evidence and issues a verification report providing reasonable assurance.
The EU authorised CBAM declarant then retrieves the verified emissions information through the CBAM Registry and uses it for its CBAM declaration. (Taxation and Customs Union)
The declarant therefore remains the party exposed to the EU compliance obligation even though much of the evidence originates with generators, traders and network operators outside the EU.
That is likely to push CBAM obligations progressively upstream into electricity contracts.
EU buyers will increasingly need contractual rights to obtain meter data, emissions information, PPA evidence, trading records and supporting documentation from their non-EU counterparties.
Serbian exporters, in turn, may increasingly encounter CBAM evidence schedules alongside ordinary clauses on price, delivery, balancing and credit.
The evidence package remains the product
The emerging reform could remove some of the most difficult elements of the present CBAM electricity methodology.
It could make trader-mediated PPAs more practical.
It could align nomination rules more closely with market coupling.
It could allow a cleaner national power mix to feed into electricity default factors.
And, most importantly, it could remove the requirement to reconstruct hourly absence of network congestion across a cross-border electricity route.
But it does not turn CBAM electricity into a certificate-based renewable claim.
The commercial divide will increasingly be between electricity that merely has a renewable characteristic and electricity whose emissions value can be measured, allocated, documented and independently verified for a specific EU declarant.
For Serbian and other SEE renewable generators, that puts the focus less on whether electricity can physically be exported — cross-border trading continues under established electricity-market rules — and more on whether the accompanying data can travel with it.
The European Parliament vote has moved the EU closer to a framework that may make that evidence chain more workable.
For 2026, however, the safest operating assumption remains unchanged: trade the electricity under normal market arrangements, but build and preserve the CBAM evidence package under the rules currently in force until the final amendment says otherwise.
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