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SSE

SSE

We are driven by our purpose: to provide energy needed today while building a better world of energy for tomorrow.

Lobbying Activity

Meeting with Jan Hendrik Dopheide (Cabinet of Commissioner Maroš Šefčovič)

15 Oct 2025 · EU-UK relations in the area of energy and climate

Response to Carbon price paid in a third country under the carbon border adjustment mechanism (CBAM)

23 Sept 2025

SSE is a leading energy provider headquartered in UK and operating in multiple EU countries. Emissions factor for electricity Electricity differs from the other goods in CBAMs scope, as electricity is an interconnected networked system where electrons cannot be easily traced and are traded anonymously. This unique situation makes the implementation of the current CBAM rules very challenging, and with impacts for all connected electricity systems. The consequent policy uncertainty is likely to negatively affect clean electricity trading across the North Seas where power exchanges occur on a regular basis in both directions jeopardising the efficient operating of electricity markets connected to Great Britain, to the detriment of EU industry and consumers. The current rules to calculate emissions factors for imported electricity will add unnecessary costs and risks to wholesale electricity prices in North West Europe, by overestimating emissions of electricity imports from the Great Britain (GB) which has ambitious clean electricity targets and equivalent carbon pricing to the EU indeed is negotiating an agreement to link ETSs. The National Energy Systems Operator (NESO) for GB confirmed the average electricity grid carbon intensity in GB for 2024 was 125g CO2/kWh, its lowest level on record and plans to go to zero-carbon by 2030, and in the same year they phased out coal-fired generation. These significant improvements will not be fully captured by the existing CBAM methodology based on marginal emissions (or a 5-year rolling average). For this reason, SSE recommends adopting a more dynamic methodology, to better reflect actual emissions of imported electricity. This technical change should be included already in the upcoming Implementing Act, in order to enable additional accuracy and ensure competitive electricity prices across North West Europe. Carbon price paid in third countries Given the special nature of electricity trading noted above, there are similar challenges in identifying the carbon price already paid on imported electricity. For this reason, SSE welcomes the option of using default carbon price values. However, we recommend that the upcoming methodology allows the default value to be calculated based on daily settlement of carbon prices and to include this option already in the upcoming Implementing Act. In addition, it is crucial that the Commission publishes as soon as possible the source from which the average price in third country is determined (e.g. year-end contracts on ICE for UK ETS), to be able to factor in the appropriate CBAM costs. Failing so, the market is likely to internalise higher risks, to the detriment to consumers in both regions. As per the recent Omnibus review of the CBAM primary legislation, the additional carbon price paid by electricity generation in GB, the Carbon Price Support (CPS), must be also considered. Given the implications for electricity pricing across North West Europe, and in particular within the Single Electricity Market (SEM) between Northern Ireland and Ireland, SSE, as other stakeholders in the sector, calls for a time-limited temporary disapplication while the EU-UK ETS linking negotiations are ongoing. The case for this is only amplified by the EU CBAM rules on electricity remaining uncertain. Alternatively, to minimise the implementation risks, taking a view that the carbon prices in GB from the UK ETS and CPS combined will be higher or equivalent to the EU for the entirety of 2026 would effectively zero-rate the CBAM on electricity imported from GB. These Implementing Acts should be published in advance of CBAM being implemented in Jan 2026. The combination of policy uncertainty on the current rules and the policy uncertainty of changing the rules in the future, generate highly unpredictable scenarios for electricity trading with negative implications especially for the EU countries physically connected to the UK.
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Meeting with Barry Andrews (Member of the European Parliament)

6 May 2025 · Wind Energy / UK-EU Relations

Meeting with Barry Andrews (Member of the European Parliament)

13 Feb 2025 · UK-EU Energy Relations

Meeting with Nina Carberry (Member of the European Parliament, Rapporteur)

9 Dec 2024 · EU-UK Relations

Meeting with Barry Andrews (Member of the European Parliament)

20 Nov 2024 · EU-UK Relations / CBAM

Meeting with Seán Kelly (Member of the European Parliament)

8 Mar 2023 · Energy crisis