How does Carbon Border Adjustment Mechanism (CBAM) treat electricity in transit through a third country, or generated in a European Union (EU) Member State's Exclusive Economic Zone (EEZ)?
CBAM does not apply to electricity generated in the EEZ of EU Member States. Of three transit cases, only electricity made in third country C, routed via third country D and consumed in the EU is covered; if default values are used, the one for C. The other two are not.
Offshore generation in the EU's zone
The Commission's Questions and Answers (Q&A) 6.7 say electricity generated in the EEZ of EU Member States is not subject to CBAM. There is no obligation, for that electricity, to apply for authorised CBAM declarant status or to access the CBAM Registry.
Three transit cases (Q&A 6.11)
- Case 1: produced in the EU, goes to a third country, re-enters and is consumed in the EU. The country of origin is the EU country, so CBAM does not apply.
- Case 2: produced in third country A, enters the EU, then goes to third country B for consumption. CBAM does not apply, because CBAM only applies to electricity released for free circulation in the EU. Electricity placed under the Union transit procedure is not imported.
- Case 3: produced in third country C, goes to third country D, then enters and is consumed in the EU. CBAM applies. If default values are used, the value to use is the one for country C.
Why case 3 uses country C
Q&A 7.21 explains why: the country of production, the country of the last physical processing, is relevant for the default emission factor of imported electricity. Country of origin and country of production are usually the same, but they can differ.
Who declares
For electricity as for other CBAM goods, the declarant is the person who puts their CBAM account number in the customs declaration, the importer or its indirect customs representative. An importer established outside the EU must appoint an indirect representative (Q&A 6.8). Importers of electricity must always be authorised declarants, with no 50 tonne threshold (Q&A 1.1).
What Senseible does here
Senseible does not trade or declare electricity and does not check capacity nominations. It reads fuel invoices and electricity bills into dated, fingerprinted installation records for an Indian plant.
- Electricity imports under CBAM (CN 2716)
- Western Balkans electricity exports
- Country of origin against country of production
- Senseible for CBAM
Last reviewed 2026-11-05. Re-read Q&A 6.7, 6.8 and 6.11 after each Commission update.