CBAM electricity default values govern the emission factor applied to virtually every electricity import entering the EU under Regulation (EU) 2023/956, effective January 1, 2026. Unlike every other CBAM sector, where default values are a fallback for importers lacking verified data, electricity defaults are the primary calculation method. Five simultaneous conditions must be met before actual emissions data may be used, and in practice, nearly zero electricity trades satisfy all five. Understanding why defaults dominate is the first step to calculating your obligation under the EU CBAM guide.
Caption: Country-specific default emission factors reflect average grid carbon intensity and apply to cross-border electricity flows via physical interconnectors.
Why Default Values Apply to Nearly All Electricity Imports
CBAM electricity default values are country-specific grid emission factors set by the European Commission and applied uniformly to all electricity imported from a given non-EU country unless all five criteria of Annex III, point 5 of Regulation (EU) 2023/956 are simultaneously satisfied.
This design choice reverses the logic used across all other CBAM sectors. Steel, cement, aluminium, fertilizers, and hydrogen importers start with actual verified emissions and fall back to defaults only when verification is impossible. Electricity importers start with defaults and must satisfy an exceptionally restrictive set of conditions to qualify for actual values.
The financial consequence is significant. At the current EU ETS price of approximately €70/tCO₂ as of late March 2026, an importer receiving electricity from a country with a default emission factor of 0.7 tCO₂/MWh pays a gross embedded emissions cost of €49 per MWh before the free allocation adjustment. The CBAM electricity sector guide explains how this interacts with the 2.5% CBAM factor in force during 2026.
The Five Conditions That Block Actual Emission Values
Five conditions must be met simultaneously for an electricity importer to use actual emissions instead of the country default. The conditions are defined under Annex III, point 5 of Regulation (EU) 2023/956 and are listed below.
The five conditions that allow use of actual emission values are as follows:
- A power purchase agreement (PPA) exists between the EU importer and a specific, identified generator in the exporting country.
- The specific installation is directly connected to the EU grid, or no network congestion exists on the relevant interconnector.
- The installation emits no more than 550 g CO₂/kWh, meaning fossil-heavy generators cannot qualify even with a PPA.
- The electricity has been firmly nominated to allocated interconnection capacity.
- The electricity nomination and actual production match within one-hour periods, applying hourly matching that synchronizes generation and import at 60-minute resolution.
Conditions 4 and 5 together create the practical impossibility. Electricity markets operate on day-ahead and intraday schedules with significant dispatch uncertainty. Achieving hourly matching between a specific generator's output and a specific EU importer's receipt across an international interconnector is technically feasible only in highly controlled, purpose-built bilateral arrangements. These arrangements do not describe the commercial reality of most cross-border electricity trade.
Default Emission Factors by Country
The country-specific default emission factors below represent the average grid carbon intensity applied to electricity imports under CBAM as established in Implementing Regulation (EU) 2025/2621. Importers should verify the current official figures with their authorized declarant, as values are subject to periodic review.
| Exporting Country | Default Emission Factor (tCO₂/MWh) | CBAM Status | Notes |
|---|---|---|---|
| United Kingdom | ~0.233 | CBAM applies | UK ETS separate; not linked to EU ETS |
| Ukraine | ~0.352 | CBAM applies | Synchronized with ENTSO-E since March 2022 |
| Morocco | ~0.720 | CBAM applies | Interconnector to Spain (Gibraltar AC link) |
| Turkey | ~0.450 | CBAM applies | Interconnects to Greece and Bulgaria |
| Norway | Exempt | CBAM-exempt | EEA member; EU ETS participant |
| Iceland | Exempt | CBAM-exempt | EEA member; EU ETS participant |
| Switzerland | Exempt | CBAM-exempt | Linked ETS agreement with EU |
| Belarus/Russia | N/A | Disconnected | Baltic states left BRELL ring February 2025 |
The United Kingdom's relatively lower default factor reflects its significant offshore wind capacity and gas-fired generation mix. Morocco's higher default reflects coal and fuel oil generation in its national grid. Turkey's default sits between these two, reflecting a mixed generation base that includes significant coal alongside natural gas and growing renewables.
How the Interconnector Architecture Shapes CBAM Exposure
Physical interconnectors are the only mechanism through which electricity CBAM applies, because electricity cannot be imported except through direct grid connections. The interconnectors currently active and subject to CBAM between the UK and EU member states include the IFA cable (2 GW capacity) and IFA2 cable (1 GW) between England and France, ElecLink (1 GW) through the Channel Tunnel, BritNed (1 GW) between England and the Netherlands, Nemo Link (1 GW) between England and Belgium, and Viking Link (1.4 GW) connecting England and Denmark, which became operational in 2024.
The total UK-EU interconnection capacity of approximately 7.4 GW represents the physical ceiling for CBAM-applicable electricity flows from the UK. Turkey connects to the EU grid via multiple 400 kV lines to Greece and Bulgaria totaling approximately 0.7 GW of capacity. Ukraine's emergency synchronization with ENTSO-E, completed in March 2022, opened an ongoing cross-border flow pathway. Morocco exports through the Gibraltar AC link to Spain at roughly 0.7 GW. Each of these cross-border flows carries the CBAM electricity default unless the five conditions above are satisfied.
The architecture also explains why circumvention is technically impossible in electricity, unlike in steel or aluminium. An electron physically flows through an identifiable interconnector cable. The CBAM electricity interconnectors guide covers the interconnector-by-interconnector compliance implications in detail.
What the Free Allocation Adjustment Means for Electricity Default Values in 2026
The gross CBAM cost calculated using the default emission factor is not the net financial obligation in 2026. CBAM applies a phased cost structure tied to the simultaneous phase-out of EU ETS free allocation under Article 10a(1a) of Directive 2003/87/EC as amended. In 2026, the CBAM factor stands at 2.5%, meaning 97.5% of free allocation remains in place.
For electricity, this means the net CBAM cost in 2026 equals the gross embedded emissions cost multiplied by 2.5%. At an EU ETS price of €70/tCO₂ and a default factor of 0.233 tCO₂/MWh (UK example), the gross cost per MWh is €16.31, and the net 2026 cost is approximately €0.41 per MWh. This is financially marginal in 2026. The net cost rises rapidly as free allocation phases out: at the 48.5% CBAM factor reached in 2030, the same UK electricity trade would carry a net cost of approximately €7.91 per MWh under unchanged assumptions.
Importers whose compliance planning horizon extends to 2030 and beyond need to integrate the full trajectory, not the 2026 lull, into their cost models. The CBAM compliance for electricity importers guide provides a year-by-year cost projection framework.
Contextual Border: How Electricity Default Values Compare to Other Sectors
Electricity CBAM default values function differently from defaults in other sectors, and the comparison clarifies why the electricity sector's design is described as reversed logic rather than simply different.
Default Mark-Up Penalty Does Not Apply to Electricity
In sectors including steel, cement, aluminium, and hydrogen, Implementing Regulation (EU) 2025/2621 imposes a mark-up on default values. In 2026, that mark-up is 10% above the calculated benchmark default, rising to 20% in 2027 and 30% from 2028 onward. This mark-up is designed to make defaults increasingly punitive, creating a growing financial incentive for exporters to provide verified actual emissions data.
Electricity defaults carry no equivalent mark-up. The country-specific emission factor is applied directly without the penalty loading. This reinforces the unique character of electricity CBAM: defaults are not punitive here because they are not a fallback. They are the standard methodology, reflecting the genuine technical impossibility of achieving hourly-matched actual measurements across international interconnectors at commercial scale.
Is an Article 9 Carbon Price Deduction Available for Electricity Imports?
An Article 9 deduction for carbon prices paid in the country of origin is theoretically available for electricity imports, applying the same principle used in other CBAM sectors. The UK ETS imposes a carbon cost on UK generators. Whether that cost qualifies for deduction against CBAM certificate obligations for UK electricity imports is not fully resolved as of April 2026.
The core difficulty is attribution: Article 9 requires demonstrating that a carbon price was directly paid on the specific embedded emissions of the imported good. For electricity, where the default emission factor is a national grid average and the actual generator is not identified, attributing a specific carbon price paid by a specific generator to the embedded emissions of a specific import is methodologically complex. The how embedded emissions are calculated guide covers the attribution methodology used across CBAM sectors.
Do Electricity Importers Have No Incentive to Measure Actual Emissions?
Electricity importers do retain an incentive to use actual emissions values, provided they can satisfy the five conditions. An importer with a dedicated PPA from a low-carbon UK wind farm, receiving electricity via a directly allocated interconnector slot, with hourly matching documentation, would apply the wind farm's near-zero emission factor rather than the UK grid average of 0.233 tCO₂/MWh. The CBAM cost difference is material at scale.
The practical barrier is not the financial logic but the operational complexity. Achieving Condition 5 (hourly matching within one-hour periods) at commercial scale across an international interconnector requires coordination between the generator, the transmission system operator, the interconnector capacity holder, and the EU importer. This chain of documentation and nomination is not impossible, but it is demanding enough that most importers calculate the default-based cost and focus compliance resources on authorization and declaration rather than actual-value qualification.
What Happens When a Country Achieves Market Coupling with the EU?
Regulation (EU) 2023/956 contains a market coupling exemption under Articles 2(7) to 2(12), designed for countries that achieve full electricity market integration with the EU and commit to equivalent carbon pricing. Countries in the Energy Community, including Western Balkan nations, Ukraine, Moldova, and Georgia, are the intended beneficiaries. As of April 2026, no country has fully qualified for this exemption. Ukraine's emergency grid synchronization with ENTSO-E does not itself constitute market coupling under the regulatory definition. Full compliance requires both electricity market integration and an equivalent ETS commitment operating at comparable price levels.
Practical Compliance Steps for Electricity Importers
Electricity importers operating under CBAM must complete the compliance steps listed below in sequence.
- Confirm authorization as an authorized declarant with the competent authority of the member state of customs registration, with the March 31, 2026 authorization application deadline as the relevant reference point.
- Identify all electricity imports via physical interconnectors from non-exempt countries, capturing the MWh volume and the interconnector route for each flow.
- Apply the relevant country-specific default emission factor from the official implementing regulation table to calculate embedded emissions per MWh.
- Multiply embedded emissions by the EU ETS certificate price (calculated as the quarterly average of EU ETS auction clearing prices during 2026 under Article 22(1a)) to determine the gross CBAM cost.
- Apply the 2.5% CBAM factor to the gross cost to determine the net 2026 obligation.
- Assess whether the five actual-value conditions are met for any import flows, and document the analysis regardless of outcome.
- Maintain records for the period ending at the close of the fourth year after the declaration year, as required by Article 6(6) of Regulation (EU) 2023/956 as amended.
The first CBAM declaration covering calendar year 2026 electricity imports is due September 30, 2027. Use the CBAM cost calculator to model your electricity obligation under different ETS price assumptions before the declaration deadline.
Caption: Authorized declarants calculate electricity CBAM obligations by applying country default emission factors to MWh volumes recorded at physical interconnectors.