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Demonstrating the required network conditions between a generating installation and the EU electricity system remains one of the most challenging elements of the current CBAM route for reporting actual electricity emissions. A proposed legislative reform could change this requirement, with potential implications for cross-border electricity traders and exporters in South-East Europe.
Congestion evidence remains a key compliance challenge
Under the current framework, electricity importers seeking to use actual emissions values must satisfy cumulative conditions, including requirements relating to the physical power purchase agreement, network congestion and electricity nominations.
These requirements can create practical difficulties for commercial parties seeking to document electricity flows across multiple borders or complex transmission networks. The European Commission’s reform proposal would modify parts of this framework, reflecting concerns that physical congestion information can be difficult for commercial parties to obtain and may not be within the importer’s control.
The potential implications are particularly relevant to exporters in South-East Europe (SEE) that depend on multi-border electricity trading arrangements and complex network routes.
COM(2025) 989 remains a proposal
The reform proposal, COM(2025) 989, would materially change electricity treatment under CBAM. Its provisions include changes to the methodology for electricity default values, aspects of the conditions for using actual emissions values, a broader concept of physical power purchase agreements involving intermediaries, and a revised congestion and nomination framework.
The Council of the EU adopted its negotiating position on 12 June 2026, while the European Parliament adopted its position on 15 September 2026. The proposal remains under interinstitutional negotiation and must not be treated as enacted law.
The same legislative file proposes expanding CBAM downstream from 2028 to selected steel- and aluminium-intensive goods. Both institutions support broader coverage, but their proposed product lists differ and remain subject to negotiation. Until final legislation is adopted, the existing scope remains the operating baseline.
Evidence systems must remain aligned with current law
Traders and lenders should maintain a version-controlled legal register that distinguishes binding legislation, Commission guidance and assumptions used for future scenarios. This helps prevent a potential regulatory benefit from being incorporated into contract prices before it becomes legally available.
Even if the congestion test is relaxed, a simplified compliance route would not make Guarantees of Origin (GoOs) or generic renewable electricity portfolio claims substitutes for the installation, contractual and import evidence required under the applicable rules.
Companies should therefore retain their current evidence arrangements until the legislation changes. Route data can continue to support credit assessments, operational analysis and audit requirements even if a particular regulatory test is subsequently modified.
Prepare systems for a possible transition
Electricity traders, exporters and project developers can prepare for legislative changes without assuming their outcome. Modular PPA schedules, version-controlled calculation engines and data fields capable of supporting both current and revised methodologies can make implementation more efficient once the final requirements are known.
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 documents help explain implementation but do not replace the binding regulation and implementing acts.
If adopted, a less restrictive framework could make renewable electricity supply more attractive to EU industrial buyers, including steel and aluminium producers. The commercial benefit, however, depends on the final legal provisions and their application to specific transactions.
For policy-sensitive investments, the governing principle remains to preserve flexibility for reform while maintaining current-law controls until an adopted rule changes them. Regulatory reform may reduce friction, but its value depends on the final enacted provisions—not on expectations that the rules will change.
