Electricity imports into the European Union are developing into a distinct carbon-compliance market as the Carbon Border Adjustment Mechanism (CBAM) assigns a financial consequence to the emissions associated with imported power. The regime could favour generators and traders able to document qualifying physical electricity supplies and substantiate claims about their emissions.
The European Commission’s transitional registry recorded approximately 96 million MWh of electricity imports between the fourth quarter of 2023 and the second quarter of 2025. The United Kingdom accounted for around 65% of the reported volume, followed by Serbia at 15% and North Macedonia at 5.2%. Bosnia and Herzegovina and Montenegro were also among the principal countries of origin. These figures represent historical declaration shares during the transitional period, not audited market shares for 2026.
Default emissions values create a verification challenge
Around 97% of electricity declarations during the analysed transitional period relied on default emissions factors rather than data specific to actual electricity generation. The Commission estimated that the reported imports represented approximately 86 million tonnes of CO₂ equivalent, while cautioning that defaults based on fossil-fuel generation can overstate the actual embedded emissions of some electricity flows.
The figure should therefore not be interpreted as a measurement of emissions from every imported megawatt-hour. Instead, it illustrates the potential significance of the methodology used to calculate emissions when generation-specific evidence is unavailable or does not meet the applicable requirements.
The definitive CBAM regime introduces a financial incentive to establish the correct emissions treatment. The reference price for the third quarter of 2026 reached €82.32 per tonne of CO₂ equivalent. The resulting carbon cost for imported electricity can differ substantially depending on whether the authorised declarant must apply the relevant default value or can legally substantiate actual emissions from a qualifying generating installation.
Actual-emissions claims require a documented supply chain
The conditions for using actual emissions values are specific. The applicable legal framework requires a qualifying power purchase agreement between the authorised EU declarant and a third-country electricity producer, or a permitted intermediary arrangement.
Evidence must also address physical connectivity or the absence of network congestion at the time of export, assessed hourly, alongside other statutory and implementing requirements. Metering records, transmission schedules, contractual allocation and a defensible link between the generating installation and the imported electricity can therefore become commercially important.
A guarantee of origin or a general claim that a trader has purchased renewable electricity is not sufficient on its own. Although such instruments can support wider energy-accounting processes, they do not replace the specific conditions governing the use of actual emissions values for imported electricity under CBAM.
Similarly, low emissions at a generating plant do not automatically establish eligibility when the electricity passes through a trading chain that cannot be adequately traced. The ability to demonstrate the required connection between generation, contractual arrangements and physical delivery is central to the claimed carbon treatment.
Proposed reforms leave current rules unchanged
The European Commission has proposed changes to electricity-emissions attribution as part of its wider downstream CBAM package. The proposals aim, among other things, to improve the treatment of decarbonisation outside the EU. However, the reform remains subject to legislative negotiations and cannot be treated as an existing entitlement.
Importers must apply the rules currently in force when preparing their 2026 CBAM declarations. Anticipated future flexibility cannot justify an emissions calculation unless the relevant changes have been adopted and become applicable.
For Western Balkan generators, this creates a potential commercial opportunity to offer a more complete supply product combining electricity delivery, an appropriate contractual structure and verifiable evidence connecting the generating installation to the EU border. The distinction may be particularly relevant to wind, solar and hydropower producers, as well as developers exploring storage-linked supply strategies.
Banks evaluating such projects should distinguish between a megawatt-hour that can be physically traded across borders and one that meets the legal conditions for an actual-emissions claim under CBAM.
The competitive advantage will not automatically accrue to renewable electricity or to generators with low emissions in isolation. It will depend on whether the exporter and authorised EU declarant can demonstrate the precise conditions required to support the carbon treatment claimed.
