The five conditions for using actual emissions on imported electricity

Published 15 September 2026

For every other CBAM good the declarant may determine embedded emissions either from the installation's actual emissions or by reference to default values (Regulation (EU) 2023/956 Art. 7(2)). Electricity is not a choice. The embedded emissions of imported electricity are determined by reference to default values unless the authorised CBAM declarant demonstrates that the criteria in point 5 of Annex IV are met (Regulation (EU) 2023/956 Art. 7(3)). Those criteria are cumulative: all five, or none. This guide takes them one at a time, with the evidence the calculation act requires for each, and ends with what the producer must add to its own report.

Why the default is the rule for electricity

The act ties a claim of actual emissions for electricity to a contract, a connection, an emissions ceiling, an hourly nomination and a verifier's certificate, so that the megawatt-hours claimed can be tied to one installation and one hour. The route therefore starts with a power purchase agreement and the evidence to match it. Everyone else declares on the default value for the country of production, or the EU factor where the country has none; the electricity sector page sets out that order and prints the published factors.

Criterion (a): a power purchase agreement with the producer

The electricity claimed must be covered by a power purchase agreement between the authorised CBAM declarant and a producer of electricity located in a third country (Annex IV point 5(a)). The evidence is the contract itself: it must show a power purchase agreement concluded directly between the declarant and the producer for the physical delivery of electricity, applicable at the time of the import for which actual emissions are claimed, and covering at least the amount claimed. Where the agreement was concluded through an intermediary, the contractual evidence must show that only one single contract was concluded between the three contracting parties (Implementing Regulation (EU) 2025/2547 Annex II point D.2.4).

The act names one document: a contract for the physical delivery of electricity, concluded directly between these two parties and in force at the time of import. On our reading an instrument that is financial rather than a physical-delivery contract, or that is not between the declarant and the producer, does not meet that wording; the act itself lists no excluded instruments.

Criterion (b): a direct connection, or no congestion at the time of export

The producing installation must either be directly connected to the Union transmission system, or it must be demonstrable that at the time of export there was no physical network congestion at any point in the network between the installation and the Union transmission system (Annex IV point 5(b)). The evidence is one of two things: a single line diagram showing the direct connection, or written documentation from the transmission system operator, or another entity with access to the relevant information, attesting that at the time of export, determined on an hourly basis, there was no physical network congestion at any point in the network between the installation and the Union transmission system (Annex II point D.2.4).

The hourly basis is the act's: the attestation is for the time of export, hour by hour, not for an average over a period.

Criterion (c): no more than 550 grammes of fossil CO₂ per kilowatt-hour

The producing installation must not emit more than 550 grammes of CO₂ of fossil fuel origin per kilowatt-hour of electricity (Annex IV point 5(c)). The evidence is data showing that the installation stays under that figure (Annex II point D.2.4). The ceiling is set on fossil-origin CO₂ per kilowatt-hour of the installation, not of the contract or the country, and it is a condition of eligibility, not the figure that is declared: the figure declared is the installation's actual embedded emissions, calculated by the producer under the calculation act's rules for electricity (Annex II point D.4.1 or D.4.2).

Criterion (d): firm hourly nomination, matched to production

The electricity claimed must have been firmly nominated to the allocated interconnection capacity by all responsible transmission system operators in the country of origin, the country of destination and, if relevant, each country of transit; and the nominated capacity and the installation's production must refer to the same period of time, which may not be longer than one hour (Annex IV point 5(d)). Two pieces of evidence are required together: written documentation from the person who nominated the capacity at the interconnector, or from the relevant transmission system operator, showing that the quantity was nominated in each of those countries and the period the nomination refers to; and data from a smart metering system showing that the installation produced a corresponding amount of electricity within the same measurement period, which may not exceed one hour (Annex II point D.2.4).

This is the criterion that turns a contract into a physical claim: the plant made this electricity in this hour, and this hour's capacity across the border was booked for it.

Criterion (e): an accredited verifier certifies all of it

The fulfilment of criteria (a) to (d) must be certified by an accredited verifier, who receives at least monthly interim reports demonstrating how those criteria are fulfilled (Annex IV point 5(e)). The evidence for this criterion is those monthly interim reports, containing the elements of evidence above (Annex II point D.2.4). An accredited verifier is one accredited by a national accreditation body on the conditions specified in Delegated Regulation (EU) 2025/2551, adopted under Article 18(3) of Regulation (EU) 2023/956.

What the producer must put in its report

The evidence does not all sit with the importer. Under the calculation act, the operator of the producing installation must indicate in its Operator's Emissions Report that criterion (c) is met and, where the direct-connection limb applies, criterion (b), and must give the verifier the evidence for that indication (Implementing Regulation (EU) 2025/2547 Art. 8(3)). It must also prepare an addendum to that report, created separately for each authorised CBAM declarant who imported electricity from the installation and wants to use actual values, indicating for that declarant that criteria (a) and (d) are met and, where the congestion limb applies, criterion (b), and stating the quantity of electricity that declarant imported for which the criteria are met, again with the evidence going to the verifier (Art. 8(4)).

A request to a producer for "your emissions" therefore does not name what the act requires. The ask is: the installation's actual embedded emissions per megawatt-hour calculated under the act, the report indicating criterion (c), and a declarant-specific addendum covering (a), (d) and where relevant (b) for the quantity imported.

What happens to the rest of the country's electricity

The accumulated amount of electricity under the power purchase agreement, and its corresponding actual embedded emissions, are excluded from the calculation of the country emission factor or the CO₂ emission factor used for the calculation of indirect electricity embedded emissions in goods under point 4.3 (Annex IV point 5, second subparagraph). The same electricity is not counted twice.

The short version

Five criteria, all at once, each with named evidence: a physical-delivery contract between the declarant and the producer; a direct connection or an hourly attestation of no congestion; an installation under 550 grammes of fossil CO₂ per kilowatt-hour; a firm nomination in every country on the path, matched to the plant's production hour by hour from smart-meter data; and monthly interim reports to an accredited verifier who certifies the lot. The criteria are cumulative, and the evidence is framed per quantity claimed: a quantity for which any one of them is not shown falls back to the default value under Article 7(3).

Regulatory sources: Regulation (EU) 2023/956 Art. 7(3) and Annex IV point 5; Implementing Regulation (EU) 2025/2547 Art. 8(1), 8(3), 8(4), Annex II points D.2.4, D.4.1 and D.4.2; Delegated Regulation (EU) 2025/2551.