ENTSO-E Says CBAM Rules Leave Grid Operators in the Dark

ENTSO-E Says CBAM Rules Leave Grid Operators in the Dark Europe's transmission body wants Brussels to spell out how the carbon border levy treats grid losses, as a separate fight over congestion income clouds the wider grids package. ENTSO-E, the body representing Europe's electricity transmission operators, has pressed the European Commission to clarify how its carbon border adjustment mechanism applies to grid operators, its board chairman told Montel on Thursday (2026-05-21).¹ That matters because the grids package now moving through Brussels is the legal scaffolding for the roughly €30bn the bloc wants to spend wiring Europe over its next seven-year budget, up from €5.8bn in the previous period.^1,3 Ambiguity at the rule-writing stage delays the projects traders are counting on to relieve the congestion that increasingly sets power prices. The ENTSO-E chairman's sharper complaint was about focus. A dispute over how congestion income should be used is, in his words, distracting attention from more important parts of the Commission's grids package.¹ Congestion rent is the money grids collect when power flows from a cheap zone to an expensive one across a constrained border. Who controls that cash, and whether it must be plowed back into new capacity, has become a proxy war for the whole package. It is not an abstract fight. Sweden has been talking to the Commission for weeks over the new grid revenue rules, particularly the treatment of new capacity and energy storage, a source close to the government told Montel on Tuesday (2026-05-12).⁴ Those talks have a hard edge: Swedish energy minister Ebba Busch paused all interconnector projects to other EU states in the week of 2026-05-04, including a 1 GW link.⁴ A minister freezing a gigawatt of cross-border capacity tells you how live the revenue question is. Interconnectors are exactly the assets that earn congestion income, and exactly the assets the Commission wants built to smooth Europe's widening price spreads. When the country that hosts some of the bloc's cheapest hydro power stops building wires to its neighbours, the spreads the grids package is meant to compress get wider, not narrower. The pricing data show why the urgency is real. In 2024 Germany saw negative power prices 5% of the time, up from 3% in 2023, according to figures cited by The Economist.³ In the first eight months of that year the share rose to 10%.³ Each negative-price hour is renewable output the grid cannot move or store, and a signal that transmission is lagging generation. That gap is feeding a building boom in the assets meant to plug it. Europe added a record 8.8 GWh of battery storage in 2024, ten times the 2020 figure, as developers chase the arbitrage between cheap and expensive hours.³ "The market is screaming for capacity," Michael Waldner, chief executive of Zurich-based consultancy Pexapark, told The Economist.³ The CBAM question ENTSO-E is raising sits awkwardly inside all this. The mechanism, designed to put a carbon price on imports such as steel and cement, was not obviously written with transmission operators in mind, yet grids buy hardware and lose energy in ways that may fall within its scope. Operators want to know before they commit capital, not after. The politics around CBAM are hardening, which cuts against the clarity ENTSO-E wants. Members of the European Parliament's environment committee backed deleting a draft clause that would have let the EU suspend the carbon border levy for specific goods as needed, they said during a debate late on Tuesday (2026-05-19).² A Parliament minded to remove escape hatches is unlikely to carve out comfortable exemptions for grid operators. The supply-side warnings are stacking up alongside the rules fight. ENTSO-E has cautioned that transmission operators may be forced to curb renewable penetration if surging data-centre demand is not managed, a constraint that would blunt the bloc's decarbonisation push at exactly the wrong moment.⁵ More load, more congestion, more pressure on rules still being drafted. For carbon traders, the read-through runs through power generation, not the CBAM headline itself. Slower interconnection and more renewable curtailment keep gas-fired plants in the dispatch stack longer in import-dependent zones, supporting TTF-linked switching demand and, through it, EUA demand. The mechanism is mundane: wires that do not get built leave thermal generation marginal more often. The near-term signal to watch is Sweden. If Busch's interconnector freeze thaws once the Commission settles the congestion-income rules, it confirms the revenue question was the real blockage. If it does not, expect other member states to weaponise their own grid investment while Brussels argues over who keeps the rent.^4,1