The European Network of Transmission System Operators for Electricity (ENTSO-E) has formally called on the European Commission to extend the transitional phase of the Carbon Border Adjustment Mechanism (CBAM) beyond its scheduled end in January 2026. The request, made during the 30th Athens Electricity Forum, reflects growing concern over the mechanism’s potential impact on electricity markets and cross-border trade, especially with non-EU neighbors.
CBAM is a cornerstone of the EU’s climate policy, aiming to equalize the carbon cost of imported goods—such as steel, cement, hydrogen, and electricity—with those produced within the European Union under the Emissions Trading System (EU ETS). In its current transitional phase, CBAM only requires importers to report embedded emissions without any financial obligations. However, from January 2026, importers will be required to purchase CBAM certificates reflecting the carbon content of their goods.
Eleni Charpantidou, an ENTSO-E board member, underscored the need for a “proportionately targeted” implementation during her remarks at the forum. She stressed the importance of further impact assessments and clear guidance to avoid adverse effects on electricity markets. “We must ensure that the CBAM implementation is proportionately targeted,” she said, calling for more time to prepare and mitigate potential disruptions.
One of the central concerns is the impact on non-EU neighboring countries, particularly those in Southeast Europe that are part of the Energy Community. These nations rely on electricity trade with the EU, and new carbon costs risk creating market distortions, infrastructure bottlenecks, and pricing instability. ENTSO-E warned that an abrupt shift to full implementation could place disproportionate burdens on transmission system operators and regional power systems still undergoing decarbonization reforms.
In response to such concerns, the European Commission has already delayed the expansion of CBAM to cover more sectors and downstream products until 2026, signaling a degree of flexibility and openness to stakeholder input. While the Commission continues evaluating how best to broaden the mechanism, the call from ENTSO-E adds pressure to adopt a phased and regionally sensitive rollout.
As the EU advances toward more ambitious climate targets, striking a balance between environmental integrity and economic stability remains critical. With further consultations and technical assessments expected in the coming months, the final structure and timeline of CBAM could still evolve, particularly in light of calls for a more gradual and collaborative approach to implementation.
Let’s see how this and other ongoing consultations, including ENTSO-E’s proposal, may influence possible regulatory adjustments under the forthcoming Omnibus legislative package—expected later this year, though potentially arriving as early as this summer.