Skip to main content

    Electricity CBAM

    Electricity Traders & Producers... Navigate CBAM With Confidence

    Address your CBAM exposure when importing power into the EU and ensure your long-term cost effectiveness.

    CBAM compliance for electricity

    image 2image 3

     

    Electricity imports into the EU now carry a CBAM cost which is tied to the volume of carbon emissions created from power generation.

    CFP Energy supports traders and producers with allowance management, hedging, and renewable sourcing strategies, ensuring your electricity imports remain cost effective.

      The challenge of CBAM and power imports

      chart
       

      Grid emissions intensity

      Coal and gas generation create high embedded carbon in exports.

      line-graph-icon
       

      Market volatility


      Electricity prices fluctuate with fuel costs and carbon allowance pricing.

      image-png-May-13-2025-11-21-51-3493-AM
       
      Decarbonisation pathways

      Large-scale renewables and interconnector reliance remain complex.

      How CFP Energy can help

      Regulated, reliable delivery

       

      Dependable procurement of CBAM allowances linked to cross-border electricity trade.

       

      Cross-border hedging

       

      Expertise in managing both carbon and power market volatility.

      Decarbonisation support

       

      Access renewable certificates and PPAs to reduce embedded carbon intensity.

      Strategic advantage

       

      Gain early certainty on CBAM exposure while competitors face market shocks.

      Request more CBAM information from our hydrogen experts.

       

       

      CBAM for electricity FAQs

      Cross-border electricity imports into the EU are covered by CBAM if generation involves carbon-intensive sources like coal or gas. Importers must report embedded emissions and, from 2026, purchase CBAM certificates. Renewable-powered imports face lower costs, supporting EU climate goals and levelling the playing field for domestic producers.
      From 2026, electricity importers must purchase CBAM certificates for embedded CO₂ emissions. The transitional period (2023–2025) requires quarterly reporting only. CBAM costs align with EU ETS allowance prices, increasing financial exposure for electricity produced from carbon-intensive grids and encouraging renewable cross-border power trade into the EU.
      Electricity importers must report Scope 2 emissions from generation processes, with some Scope 1 coverage where relevant. Emissions are calculated using Annex III CBAM methodology. Accurate reporting lowers reliance on default values, ensuring fair certificate costs for cross-border electricity trade into EU markets under CBAM compliance rules.
      Yes. If electricity is generated in a jurisdiction with an equivalent carbon price, importers can deduct that cost from CBAM obligations. This prevents double carbon taxation and recognises international carbon pricing systems, while still aligning imported electricity costs with EU ETS compliance levels under CBAM.
      CBAM raises costs for carbon-intensive electricity imports, making fossil-fuel generation less competitive in EU markets. This incentivises renewable energy procurement, PPAs, and grid decarbonisation. Traders sourcing low-carbon electricity gain cost advantages, while high-carbon exporters face reduced market access under the EU Carbon Border Adjustment Mechanism.