European Union policymakers are considering changes that could make it easier for renewable electricity from neighbouring countries to qualify for actual-emissions treatment under CBAM. The reforms are described as potentially helping restore traditional trading routes and supporting multi-party contracting. As of October 2026, electricity producers and traders face a timing issue because 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, covers downstream CBAM goods and anti-circumvention measures alongside electricity-specific methodology updates. 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 on fossil-only generation in the same way.
These methodology changes are presented as proposals rather than automatic entitlements. The default approach could affect how carbon intensity appears for countries with significant hydro, wind or solar generation. Under a fossil-generation-based default measure that does not reflect the overall output mix, such systems can appear relatively carbon-intensive. The Commission’s approach would use a broader average grid factor, which could narrow the gap between system reality and default import treatment.
The method is also linked to contracting and negotiation dynamics. A different grid factor could affect incentives for installation-specific PPAs. It could also influence relative negotiating positions of traders and IPPs. The size of any impact is described as depending on final wording and official factors rather than on a simple calculation based on national renewable shares.
Contractual intermediaries and evidence requirements
Implementing rules currently recognise a direct PPA and a narrow single-contract tripartite structure. The Commission’s proposed intermediary reform would broaden recognition of verifiable contractual chains. This is intended to allow ordinary power trading models to accommodate actual-emissions claims without requiring every intermediary to fit one three-party instrument. Even with broader contractual recognition, the importer would still need convincing evidence that the claimed power was generated, nominated and imported as required by the final regulation.
The reform package is also tied to allocation control expectations. Contractual flexibility is described as not removing the need for reliable allocation controls. Evidence requirements remain central for qualification under the final rules. Documentation obligations therefore remain relevant even if contract structures become more flexible.
Network congestion condition and declaration timeline
The network congestion condition has been highlighted 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, this could reduce documentation risk for renewable generators and EU buyers. Until an amendment is enacted and applies to relevant imports, producers are not expected to discard current congestion evidence.
A timing feature in the proposal is described as unusually important. The Commission envisages applying some electricity-methodology changes to imports from 1 January 2026. This would allow first annual declarations in September 2027 to use revised rules. If adopted in the relevant form, this application would create a retroactive effect.
Businesses are advised to preserve evidence from 2026 even if they expect later simplification. 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. As of 17 October 2026, interinstitutional negotiations mean the final text and timetable remain uncertain.
PPA provisions for potential rule changes
Project contracts are described as needing to distinguish between the regime already in force and anticipated amendments. Contracts should 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 source also points to how historic 2026 settlements could be reopened under revised rules. It notes that such provisions may cover whether a buyer must file corrected data and who receives any realised carbon saving. Without such provisions, disputes over the value of past imports could arise following reforms intended to improve market access.
For regional electricity market participants, policy direction is described as important but not yet bankable. The strongest participants are expected to preserve today’s evidence standards and negotiate future-proof contracts. They are also expected to avoid distributing hypothetical regulatory gains before an enforceable rule exists.