Brussels, October 27, 2026 — The European Commission has proposed removing the physical-network congestion test from the EU’s Carbon Border Adjustment Mechanism (CBAM) electricity rules, potentially making it easier for renewable generators in the Western Balkans to qualify for actual-emissions treatment when exporting electricity to the European Union.
The proposed change targets one of the most difficult conditions for cross-border electricity transactions: demonstrating that no physical network congestion existed between a third-country generating installation and the Union transmission system during the relevant export period.
Proposed Reform Would Remove a Major Qualification Barrier
Under the current rules, electricity must either come from an installation directly connected to the Union transmission system or meet the condition that no physical network congestion existed at any point between the installation and the Union at the time of export.
The Commission’s strengthening proposal would delete this congestion criterion. However, the change remains subject to the legislative process and cannot yet be treated as an applicable compliance option for 2026 imports.
For cross-border traders, renewable developers, transmission system operators (TSOs), interconnector users and EU off-takers, the immediate task is to distinguish the proposed framework from the requirements currently in force. The Commission proposal and the positions of the Council and European Parliament can inform contract design and scenario analysis, but the amended rules must be adopted before the proposed flexibility can be relied upon in a declaration.
A two-scenario approach would allow companies to prepare for potential reform while retaining compliance with current requirements. Contractual and scheduling evidence would remain important even if the congestion condition is removed.
Why the Current Test Creates Uncertainty
The existing test can be difficult to satisfy because individual generators and importers do not control the entire regional electricity network. Congestion may occur far from a generating plant and may be documented through data held by TSOs or market operators rather than by the commercial parties themselves.
Consequently, a project producing low-carbon electricity may hold valid capacity rights and contractual documentation yet still face uncertainty over whether a verifier will accept evidence that the required absence of congestion applied throughout every relevant period.
Removing this condition would eliminate one network-related obstacle that can lie outside the direct control of the generator and importer. It would not, however, remove the need to establish the origin of the electricity, the qualifying contractual chain, relevant capacity allocation or market-coupling treatment, hourly production and the generating installation’s emissions.
Implications for Renewable Power Purchase Agreements
A less restrictive congestion test could make the CBAM-related value of cross-border renewable power purchase agreements more predictable. Buyers may be reluctant to pay a premium for installation-specific emissions treatment if eligibility depends on grid conditions that neither the producer nor the off-taker can control.
Greater predictability could help developers and buyers incorporate the potential value of verified low-emissions electricity into long-term pricing arrangements and project-financing assessments. The scale of that benefit would depend on the final legislation and the ability to substantiate all remaining eligibility conditions.
For renewable projects, CBAM-related value should be treated as an additional revenue attribute rather than the foundation of the underlying energy case. Lenders and developers can assess the potential upside where the contractual and evidentiary chain is credible, while ensuring that project economics remain resilient if individual hours fail to qualify or the legal framework changes.
Western Balkan Export Routes in Focus
The proposal could be particularly relevant to electricity exports from the Western Balkans, where northbound flows may use constrained transmission corridors towards Hungary, Croatia, Romania and Bulgaria. Montenegro’s interconnector with Italy also operates within its own capacity constraints.
A framework placing greater emphasis on verifiable contractual and scheduling attribution, rather than proving the absence of physical congestion across the entire route, could better reflect the operational realities of these markets.
For regional renewable developers and traders, the potential benefit would be a reduced risk that otherwise qualifying electricity loses access to actual-emissions treatment solely because of a network condition outside the parties’ control. The proposal would not itself guarantee qualification, since the remaining requirements would still need to be met.
Prepare Evidence for Both Regulatory Scenarios
Companies can begin preparing by reconstructing one historical week of electricity transactions using records already held in their ordinary operating systems. The exercise should link generating-plant output, meter data, schedules, cross-border records and allocation to the relevant buyer.
If the chain can be reconstructed consistently without relying on ad hoc emails, screenshots or staff recollection, the process is more likely to be scalable. Gaps identified during the exercise can guide improvements to data management before actual-emissions treatment is incorporated into commercial commitments.
Companies should continue retaining congestion evidence for 2026 compliance files. Rather than removing existing controls in anticipation of reform, they should design their systems so that the same core dataset can support both the current rules and the proposed framework.
The compliance process should also connect electricity purchasing, generation, customs and financial records. Using consistent underlying information enables companies to explain not only the emissions figure claimed, but also the operational evidence supporting it and the circumstances that could change the result.
Fallback Planning Remains Essential
Before a transaction or reporting period is finalised, the decision file should link the contract, generating installation, meter readings, schedule and cross-border records, while identifying who approves each assumption. A documented fallback is also necessary if the preferred emissions treatment cannot be substantiated.
Defining that fallback in advance helps companies identify potential exposure before a verifier, customs authority or authorised CBAM declarant challenges a claim. It can also make later price adjustments, verification changes and management reporting easier to defend.
The proposed removal of the congestion test could widen the scope for actual-emissions claims on Balkan renewable electricity exports. The commercial opportunity will depend on adoption of the final legislation and continued compliance with the remaining contractual, operational and verification requirements.
