European Union policymakers are considering changes that could make it easier for renewable electricity from neighbouring countries to receive actual-emissions treatment under CBAM. The proposals also aim to support multi-trader export chains and make multi-party contracting more workable. As of October 2026, electricity producers and traders still face a timing issue because the legislative process has not completed, while electricity has been imported under the definitive regime since January.
Commission proposal on electricity methodology and eligibility
The European Commission’s COM(2025) 989, tabled in December 2025, covers downstream CBAM goods and anti-circumvention measures alongside electricity-specific methodology changes. For electricity, the proposal would make actual-emissions eligibility less restrictive. It includes changes related to contractual intermediaries and the network congestion requirement. The proposal also revises the default emissions methodology to reflect the broader electricity generation mix rather than relying in the same way on fossil-only generation.
The Commission’s approach is still at proposal stage and does not create automatic entitlements. The method could affect how carbon intensity is calculated for imports where hydro, wind or solar generation is significant. Under a fossil-generation-based default measure, such a country can appear relatively carbon-intensive if the default does not reflect the overall output mix. A broader average grid factor is described as a way to reduce the gap between system reality and default import treatment.
The Commission text also indicates that methodology changes could alter incentives for installation-specific PPAs and affect negotiating positions between traders and IPPs. The scale of any impact would depend on the final wording and official factors rather than on a simple national renewable-share calculation. Those elements are therefore not fixed until the legislative outcome is final.
Contracting rules for intermediaries and evidence requirements
Implementing rules currently recognise a direct PPA and a narrow single-contract tripartite structure. The proposal would broaden recognition of verifiable contractual chains. That could allow standard power trading models to accommodate actual-emissions claims without requiring every intermediary to fit into one three-party instrument.
Even with intermediary reform, the importer would still need evidence that the claimed power was generated, nominated and imported as required by the final regulation. Contractual flexibility is described as not removing the need for reliable allocation controls. Market participants therefore remain dependent on documentation that satisfies allocation requirements under whichever rules are enacted.
Network congestion condition and documentation for each import hour
The network congestion condition has drawn attention because market participants may struggle to obtain route-wide physical evidence for each import hour. The Commission proposed removing that condition as part of the reform package. If enacted, it could reduce documentation risk for renewable generators and EU buyers.
Until an amendment is enacted and applies to relevant imports, producers cannot discard current congestion evidence based on the proposed change alone. Policymakers’ view of congestion evidence burden is therefore not sufficient to change what evidence must be retained for imports already covered by existing requirements.
Legislative timeline, retroactive application risk, and PPA contract terms
A timing feature in the Commission proposal would apply some electricity-methodology changes to imports from 1 January 2026. The stated purpose is to allow first annual declarations in September 2027 to use revised rules. If adopted in its final form, this would amount to a retroactive effect.
Businesses are advised to preserve evidence from 2026 even if they expect later simplification because enacted law may differ from the draft or impose specific conditions for recalculation. The European Parliament adopted amendments at first reading on 15 September 2026, after which the file entered interinstitutional negotiations. As of 17 October 2026, this leaves uncertainty over final text and timetable.
Project contracts are expected to distinguish between the regime already in force and anticipated rules. They should also define how prices, documentation and qualification claims would change if amendments become effective. A forward-looking PPA could include an option to expand an eligible volume pool or permit additional contractual intermediaries once specific legal conditions are satisfied.
The contract design described in the proposals would also need to address reopening historic 2026 settlements, including whether buyers must file corrected data and who receives any realised carbon saving. Without those provisions, disputes could arise over how value from past imports is treated after reforms intended to improve market access take effect.
Status of bankability for regional electricity market participants
For the regional electricity market, policy direction is described as important but not yet bankable. Participants are expected to preserve today’s evidence standards while negotiating future-proof contracts. They are also expected to avoid distributing hypothetical regulatory gains before an enforceable rule exists.