New European Commission guidance has turned the European Union’s carbon border levy on imported electricity from a largely regulatory test into a detailed verification exercise requiring hourly network records, declarant-specific allocations and a clear separation between advisory and assurance roles.
The Commission published its first dedicated guidance on verification and accreditation under the Carbon Border Adjustment Mechanism, or CBAM, on August 24, followed by new Registry manuals for accredited verifiers on August 27–28.
The documents do not amend the CBAM Regulation. However, they provide the clearest indication yet of how accredited verifiers will examine claims that electricity imported into the EU qualifies for the use of actual embedded emissions instead of a potentially less favourable default value.
The guidance is particularly important for electricity producers, traders, aggregators and industrial buyers in Serbia, Montenegro and other neighbouring markets seeking to supply identifiable renewable electricity to EU customers.
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It confirms that the operating standard will extend well beyond presenting a power purchase agreement or a guarantee of origin. Every claimed megawatt-hour will need to be traced through a named generating installation, qualifying contractual arrangement, hourly production record, accepted cross-border nomination, EU importer and independently verified allocation.
The Commission said proposed changes to the electricity provisions, including possible retroactive adjustments, remained under legislative consideration and were not incorporated into the new guidance. The existing five conditions in Section 5 of Annex IV therefore remain the working basis for electricity imported during 2026.
PPA becomes a verification file
One of the most consequential clarifications concerns the evidence required for a power purchase agreement.
A verifier will be expected to confirm the authorised CBAM declarant’s Economic Operators Registration and Identification number, or EORI, together with the producer’s unique CBAM Installation ID, the reporting period, contracted electricity quantity and supporting invoices or delivery records.
The verification must also establish that controls are in place to prevent the same electricity from being claimed more than once.
This changes the practical purpose of the PPA file. A commercial agreement between a producer and trader will not, by itself, constitute sufficient evidence that the electricity qualifies for actual-emissions treatment.
The contract and supporting records will need to identify the relevant EU declarant, generating installation, reporting period and allocated quantity. They must also connect the commercial transaction to the physical electricity flow and the records used in the CBAM declaration.
The issue is more complex where aggregators, suppliers or other intermediaries stand between the generating plant and EU importer.
The Commission’s guidance indicates that the verifier should determine whether the parties are covered by a single contractual arrangement. A chain of unrelated back-to-back contracts may therefore be insufficient if it does not provide an auditable connection between the installation, intermediary and authorised declarant.
Producers and suppliers will need to review existing trading contracts to determine whether they preserve this chain. Contract amendments may be required to introduce CBAM-specific installation references, data-access rights, allocation rules, audit provisions and protections against double counting.
Hourly evidence becomes the core control
The guidance also gives greater precision to the physical-delivery conditions.
For the requirement that no physical network congestion existed between the generating installation and the EU destination, written transmission system operator evidence should demonstrate on an hourly basis that network conditions permitted the claimed transfer.
If the available evidence is unclear, a verifier may seek confirmation directly from the relevant TSO and, where possible, obtain a timestamped congestion report.
Equivalent evidence may be required from the TSOs of transit countries when electricity crosses several systems before entering the EU. This is material for electricity traded from the Western Balkans because a contractual route may involve multiple bidding zones, borders and market participants.
The nomination requirement is similarly demanding. Accepted interconnector nominations must document the origin, destination and any transit systems. Smart-meter production recorded at the generating installation must correspond to the nominated delivery period, which may not exceed one hour.
The result is an hourly reconciliation chain covering plant metering, production data, cross-border capacity, accepted nominations, transit arrangements and the quantity imported by the authorised EU declarant.
Metering and commercial records that are complete at monthly or annual level may still fail the test if they cannot be reconciled for each relevant hour.
This will require closer coordination between producers, balance-responsible parties, traders, TSOs and EU importers. It also increases the importance of timestamp consistency, meter hierarchy, missing-data procedures and controls governing corrections to schedules or production records.
A renewable generator cannot assume that all electricity produced under a long-term PPA automatically qualifies. Qualification must be established for the quantity that can be traced through the required contractual and physical chain.
Guarantees of origin may support the evidence package but cannot replace accepted nominations, border records or installation-level metering.
Twelve monthly reports required
The Commission has also clarified the role of interim reporting.
The verifier should receive 12 monthly interim reports covering the principal electricity eligibility criteria. Where there has been no relevant change during a month, a short report confirming “no change” may be accepted.
This creates a continuous compliance process rather than a year-end document collection exercise.
Producers and intermediaries will need a controlled monthly close covering changes to the installation, contractual arrangements, generation data, cross-border schedules, congestion evidence and allocated import quantities. Exceptions should be identified and resolved while TSO and trading records remain accessible.
Waiting until the end of the reporting year could leave gaps that are difficult to reconstruct and may cause the verifier to reject part of the claimed electricity.
Each authorised CBAM declarant must also receive a declarant-specific addendum. The addendum must identify the declarant’s EORI, confirm the relevant eligibility conditions and state the precise quantity imported from the installation.
The verifier must assess each addendum separately and provide an individual confirmation for each declarant-specific addendum in the verification report.
That requirement effectively rules out reliance on a single pooled annual certificate where one producer or aggregator supplies several EU traders. The operator will need separate declarant sub-ledgers and controls ensuring that the same production is not allocated across multiple customers.
The sub-ledger should track available generation, quantities reserved under each contract, accepted nominations, confirmed border deliveries, rejected hours, reallocations and the final verified quantity for each declarant.
Advisory and assurance roles must be separated
The guidance also affects the structure of the verification market.
Unlike the EU Emissions Trading System model, the CBAM verifier is responsible for assessing whether the operator’s monitoring plan complies with the applicable methodology and whether the plan has been correctly implemented.
At the same time, the accredited verifier must remain independent. In particular, it cannot have supported the preparation of the monitoring plan or emissions report that it later verifies.
Companies will therefore need to separate readiness and advisory work from the final accredited verification.
A pre-verification provider may help design the monitoring plan, evidence repository, contractual controls, reporting procedures and corrective-action programme. The accredited verifier must then conduct the independent assessment without having created the underlying system.
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Using the intended final verifier to design the monitoring architecture could create an independence conflict and complicate acceptance of the verification report.
The distinction is especially relevant for companies entering CBAM verification for the first time. Many electricity producers have strong operational and trading systems but do not yet maintain a single evidence repository connecting technical, contractual, customs and carbon records.
A defensible model will require documented responsibilities, controlled data interfaces and a clear record of who prepared, reviewed and approved each part of the monitoring and reporting system.
Accreditation scope becomes a selection criterion
The Commission guidance confirms that verification of electricity physically imported into the EU requires accreditation for activity group LI, covering “electricity imported into the customs territory of the Union.”
Activity group LII is the separate scope for indirect emissions.
The distinction matters when producers and EU declarants select a verifier. General CBAM accreditation, or accreditation for another covered industrial activity, does not automatically establish that the verifier is qualified to assess imported electricity.
An apparent wording inconsistency in one example in the guidance refers to LI in connection with indirect emissions. The controlling Delegated Regulation, however, identifies LI as imported electricity and LII as indirect emissions. Verifier-selection procedures should follow the legal text and confirm the precise activity scope shown on the accreditation certificate.
Companies should also examine whether a prospective verifier has the technical competence and geographic capacity to assess cross-border electricity evidence, including records obtained from non-EU producers, traders and transmission operators.
Registry access opens from September
The Commission has also begun operationalising verifier access to the CBAM Registry.
Accredited verifiers can start registering from September 1, 2026 and must complete registration within two months of accreditation. They will need to submit an accreditation certificate and corporate and representative documentation through the EU’s O3CI access system.
Applications are handled through the national competent authority of the EU member state in which the verifier was accredited.
Verification reports are expected to be issued through the Registry from January 2027.
For operators and declarants, verifier appointment will therefore involve more than checking an accreditation certificate. They will also need confirmation that the verifier has completed Registry registration, established the necessary digital access and can be connected to the relevant installation and declarant records.
The final readiness process should test the entire sequence: verifier accreditation scope, O3CI registration, Registry connection, installation data, monitoring documentation, monthly reports, declarant-specific addenda and issuance of the verification report.
Western Balkan exporters face an implementation test
For Serbian and other Western Balkan electricity exporters, the guidance raises both the value and the operational cost of proving actual emissions.
Renewable producers may have a commercial advantage if they can demonstrate low embedded emissions for electricity physically imported into the EU. But the advantage depends on evidence that links individual generation intervals to contractual allocation and cross-border delivery.
A plant’s renewable status is not enough. Nor is an annual guarantee of origin, a general supply agreement or a portfolio-level claim that an equivalent quantity of green electricity was produced.
The qualifying unit is the claimed megawatt-hour within a controlled chain of installation identity, production, scheduling, transmission, import, allocation and verification.
Companies seeking to use actual emissions should therefore begin with a gap assessment covering five areas: contractual architecture, hourly metering, cross-border evidence, declarant-level allocation and verifier readiness.
The new guidance makes clear that CBAM electricity compliance cannot be assembled solely by a sustainability department. It requires an integrated operating model covering plant operations, SCADA and metering, trading, balancing, legal agreements, customs records, carbon reporting and independent assurance.
The standard is straightforward to describe but demanding to execute: every claimed megawatt-hour must resolve to one named installation, one qualifying contractual chain, one accepted physical schedule, one EU importer or declarant, one controlled allocation and one independent verification conclusion.
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