Understanding CBAM for Imported Electricity

Electricity imports present unique challenges for CBAM due to the complexities of cross-border power trading, varying generation sources, and market coupling mechanisms. The calculation method depends significantly on whether the electricity source can be reliably traced to specific generators or must use default values.

Key Aspects of Electricity CBAM

1. Default Values:
   • Based on country-specific average emission factors
   • Used when specific source cannot be verified
   • May include regional adjustments
2. Actual Emissions:
   • Available for verifiable power purchase agreements (PPAs)
   • Requires firm nomination of interconnection capacity
   • Must demonstrate no physical network congestion
3. Special Considerations:
   • Market coupling mechanisms
   • Grid losses in transmission
   • Mixed generation sources
   • Time matching of generation and consumption

Eligibility for Actual Emissions

To use actual emissions instead of default values, all these conditions must be met:

1. Direct PPA with a generator
2. Direct connection or no network congestion
3. Maximum emission factor of 550g CO2/kWh
4. Firm nomination of interconnection capacity
5. Time-matched generation and consumption

Mathematical Basis

The emissions calculations follow these formulas:

For Default Value Method:

CopyTotal Emissions = Imported Volume × Default Factor

Where:
Default Factor = Country-specific CO2 emission factor or
                 Average EU Emission Factor (if no specific data)

For Actual Emissions Method:

CopyTotal Emissions = Σ(Generation × Source-specific EF)

Where:
Generation = Verified generation per source (MWh)
Source-specific EF = Actual emissions factor of the power plant
Transmission Loss Factor = 1 + (Distance × Loss Rate)

For Mixed Sources:

CopyWeighted Average EF = Σ(Source Share × Source EF)

Where:
Source Share = Percentage of total generation
Source EF = Source-specific emission factor

Data sources:

• Default emission factors: International Energy Agency (IEA)
• Grid emission factors: National inventory reports
• Transmission losses: ENTSO-E data
• Generation data: Transmission System Operators
• EU average factor: European Environment Agency