European Union policymakers are considering changes that could make it easier for renewable electricity from neighbouring countries to obtain actual-emissions treatment under CBAM. The reforms could help restore traditional trading routes and make multi-party contracts more workable. Yet in October 2026, electricity producers and traders still face a critical timing problem: the proposed changes have not completed the legislative process, while electricity has been imported under the definitive regime since January.
The European Commission’s COM(2025) 989, tabled in December 2025, addresses downstream CBAM goods and anti-circumvention measures alongside electricity-specific methodology changes. For electricity, the proposal would make actual-emissions eligibility less restrictive, including changes to contractual intermediaries and the network congestion requirement. It would also revise the default emissions methodology to reflect the broader electricity generation mix rather than relying in the same way on fossil-only generation. Those changes are proposals, not current automatic entitlements.
The proposed method matters economically. A country with significant hydro, wind or solar generation can appear relatively carbon-intensive under a fossil-generation-based default measure that does not reflect the overall output mix. A broader average grid factor could reduce the gap between system reality and default import treatment. It could also change incentives for installation-specific PPAs and the relative negotiating positions of traders and IPPs. The size of the impact would depend on the final wording and official factors rather than on a simple national renewable-share calculation.
Intermediary reform is equally consequential. Existing implementing rules recognise a direct PPA and a narrow single-contract tripartite structure. Broader recognition of verifiable contractual chains could allow ordinary power trading models to accommodate actual-emissions claims without requiring every intermediary to fit one three-party instrument. But the importer would still need convincing evidence that the claimed power was generated, nominated and imported as required by the final regulation. Contractual flexibility would not remove the need for reliable allocation controls.
The congestion condition has attracted particular attention because market participants may struggle to obtain route-wide physical evidence for each import hour. The Commission proposed to remove it as part of the reform package. That could reduce documentation risk for renewable generators and EU buyers. However, until the amendment is enacted and applies to the relevant import, a producer cannot simply discard the current congestion evidence because policymakers consider it burdensome.
A timing feature is unusually important. The Commission’s proposal envisages applying some electricity-methodology changes to imports from 1 January 2026 so that first annual declarations in September 2027 can use the revised rules. That would amount to a retroactive effect if ultimately adopted in the relevant form. Businesses should preserve evidence from 2026 even if they expect a future simplification, because the law as finally enacted may differ from the draft or impose specific conditions for recalculation.
The European Parliament adopted amendments at first reading on 15 September 2026, and the file was in interinstitutional negotiations thereafter. That makes the final text and timetable uncertain as of 17 October 2026. Project contracts should distinguish the regime already in force from anticipated rules and define how prices, documentation and qualification claims would change if amendments become effective.
A sensible forward-looking PPA could include an option to expand an eligible volume pool or permit additional contractual intermediaries once specific legal conditions are satisfied. It should also set out how historic 2026 settlements would be reopened, whether a buyer must file corrected data, and who receives any realised carbon saving. Without those provisions, a reform intended to improve market access could trigger disputes over the value of past imports.
For the regional electricity market, the policy direction is important but not yet bankable. The strongest participants will preserve today’s evidence standards, negotiate future-proof contracts and avoid distributing hypothetical regulatory gains before an enforceable rule exists.