Supported by CBAM.Clarion.Engineer
A proposed change to the EU Carbon Border Adjustment Mechanism (CBAM) could increase the commercial significance of national electricity-grid decarbonisation. Under COM(2025) 989, the European Commission proposes revising the default-emissions methodology for imported electricity, including a move towards an average grid emissions factor rather than a factor based only on fossil sources that set electricity prices.
If enacted, the change could alter the relative economics of electricity imports from countries with growing renewable generation. Grid decarbonisation could influence the default calculation more directly, potentially narrowing the difference between ordinary imports assessed using default values and imports qualifying for installation-specific actual emissions values.
Electricity imports remain subject to current CBAM rules
The definitive CBAM regime has applied since 1 January 2026. Electricity is covered under CN 2716 00 00, and the mass-based de minimis exemption introduced through the 2025 simplification does not remove electricity imports from the mechanism.
For 2026 imports, CBAM certificate sales are scheduled to begin on 1 February 2027, while the first annual declaration and certificate-surrender deadline is 30 September 2027. From 2027, the general certificate-pricing mechanism moves to weekly averaging of auction prices, and quarterly holding requirements become part of the treasury cycle.
These deadlines mean that companies must prepare for the financial consequences of CBAM while distinguishing the timing of compliance obligations from the timing of potential regulatory reform.
Cleaner grids could strengthen regional electricity competitiveness
For Western Balkan countries, the proposed methodology has implications beyond electricity traders. Faster renewable deployment, coal displacement and improved grid integration could influence the carbon competitiveness of electricity exports and the wider investment case for power-intensive industries, including steel and aluminium.
A lower national grid emissions factor could become more commercially relevant if the final CBAM rules incorporate average grid emissions into the default route. However, the extent of any benefit would depend on the methodology ultimately adopted and the country-specific values applicable to the relevant reporting period.
Investors need scenarios, not assumed regulatory benefits
Companies should avoid incorporating proposed emissions factors into their base-case financial models before the revised methodology is legally adopted and the applicable country values are published. Sensitivity analysis can instead show how different grid-emissions assumptions might affect electricity costs, export competitiveness and investment returns.
The same principle applies to treasury and investment decisions. Carbon-price hedges, electricity contracts and capital expenditure may need to be arranged before the legislative outcome is known, but accounting and compliance treatment should remain anchored in the rules currently in force.
Flexible contract structures and retained source data can help companies respond more quickly once the final methodology becomes clear. This approach preserves the option to benefit from regulatory changes without prematurely recognising an expected benefit.
Guidance explains implementation but does not replace legislation
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 materials explain implementation but do not replace the binding regulation and implementing acts.
The governing principle for policy-sensitive investments is to preserve flexibility for reform while maintaining current-law controls until an adopted rule changes them. A cleaner national grid can become a trade asset, but only the enacted CBAM methodology determines how much of that advantage is recognised at the EU border.
