Renewable electricity producers and developers in the Energy Community are facing challenges in complying with CBAM conditions on actual emission values, which additionally increases uncertainty in projected revenues.
Operators of existing renewable power plants and project developers in Energy Community contracting parties have asked the international organization’s secretariat to flag these challenges that they are encountering. The secretariat included them in its second report on the impact of the Carbon Border Adjustement Mechanism (CBAM) on electricity markets.
“As the implementation of CBAM progresses, an increasing number of renewable producers and project developers in contracting parties are starting to face practical difficulties in meeting the requirements for the use of actual emission values. This is creating regulatory uncertainty and additional compliance costs to their operations and projects”, the secretariat said.
Investors identified three main issues
The aim of the operators of existing renewables installations and project developers in the contracting parties is to ensure access to the EU market and EU price benchmarks by using actual emission values or via an exemption through Article 2(7), it explained.
According to the report, investors identified three main issues.
Investors face a practical impossibility in proving actual zero-emission values because accredited CBAM verifiers will not be operational until late 2026 or early 2027.
The second issue is rigid power purchase agreement compliance rules
National accreditation bodies in EU member states started to roll out accreditation programmes for CBAM verifiers at the beginning of the summer 2026, the report reads.
The second issue are rigid conditions required for actual emission values to be calculated under power purchase agreements (PPAs). The current CBAM framework penalizes common market practices for fulfilling obligations of certain types of PPAs, such as balancing supply deficits with non-renewable power or trading through intermediaries.
It creates unforeseen financial risks and limits the contracting flexibility for green power developers, according to the report.
“An onshore wind farm of 130 MW would accrue opportunity costs of EUR 8.9 million”
The third objection relates to market risk – price fluctuations and spreads, becoming far more unfavorable and financially damaging because investors are unable to export to the EU due to the problems with the actual emission values.
Uncertain price convergence between contracting parties and EU member states makes revenue planning for projects more difficult, the report reads.
As an illustration, if the spread returns to the Q1 2026 level, setting prices in contracting parties at a substantial discount compared to neighbouring EU markets, and the electricity is limited to be sold only on the local market – being unable to use actual emission values for EU exports – an onshore wind farm of 130 MW would accrue opportunity costs of EUR 8.9 million just in six months, the authors of the report calculated.
