Key Regulatory Developments Shaping EU Energy Markets in 2025

Over 2025, there have been multiple regulatory developments; therefore, there is a need to “pick n’ choose” some major industry events.

Introduction of REMIT 2

In January 2025, REMIT 2 entered fully into force, being arguably the first noticeable event. The introduction of REMIT 2 significantly changed the regulatory landscape for trading in the EU. Key changes include:

REMIT II has expanded its scope to cover LNG supply contracts, gas storage contracts, electricity supply contracts, and electricity-related derivatives.

It also introduced new reporting obligations for algorithmic trading, requiring market participants to ensure compliance in order to avoid penalties and safeguard market integrity.

In addition, the definition of an Organised Market Place (OMP) has been updated to include direct electronic access, further strengthening the regulatory framework.

The Carbon Border Adjustment Mechanism

In the wider carbon context, one of the main regulatory highlights has been the discussion on the evidence on methodologies and the inclusion of the carbon price paid in third countries, and more generally the application of CBAM, the Carbon Border Adjustment Mechanism, on electricity.

Probably everyone has understood that the CBAM functioning does not correspond to the market functioning of the energy wholesale market, and therefore CBAM looks ill construed in the context of electricity. On 20 October, this discussion triggered an EU “Carbon Simplification Package.” In December 2025 parts of the issues were addressed in the CBAM-implementing acts and CBAM amending guidelines for electricity imports.

Looking ahead into 2026, and in spite of all efforts “to make CBAM work,” the true CBAM impact on electricity trading remains blurred. Certainly the damage on the use of the cross-border PPA for green electricity has been done due to continued uncertainty about the price for these long-term arrangements. Without clear clarification of the flow and import/export data to be published by TSOs on cross-border flows and congestion, the meaningful application of CBAM is likely to fail in 2026. Good news that the UK expressed their aim to link its carbon scheme to the EU carbon scheme.

The question arises: why were these markets ever dislinked?

In the MIFID 2 debate, 2025 saw a lot of action to defend the ancillary exemption regime for the utilities. This discussion is carried into 2026.

As far as relevant country developments are concerned, the following points stick out:

The German government introduces an industrial electricity price within the scope of CISAF for electricity-intensive companies, granted retroactively for the years 2026–2028.

German industrial input has suffered a steep decline, and the government considers creating aid amounting to 50% of the reference price and capped at the target price (5 ct/kWh).

Gas markets and Russian supply phase-out

The most noticeable event in the gas trading sector focused on the expansion of the EU sanction packages and joint efforts to dry out the Russian cash supply from commodity sales. In November 2025 the EU Commission decided to phase out the Russian gas supply, with the gas supply phase-out to take effect in 2027. Spot-market Russian liquefied natural gas (LNG) will be banned from the EU once the regulation enters into force in early 2026, while pipeline gas imports will be phased out by 30 September 2027. During negotiations, the co-legislators advanced the phase-out timelines for most import contracts. The new law establishes penalties to be enforced by member states against operators for infringement. The exemption regime remains unclear in December 2025.

Meanwhile, the US administration brokered new LNG supply arrangements with the EU Commission, providing for more supply than the Europeans are likely (and able) to take off.

Methane regulation and UDB delays

The methane emission trade did not come off the ground in 2025 due to the EU failing to agree on key issues like defining acceptable certification systems. Continuous legal uncertainty for CAs and obligated subjects is hindering implementation and impeding compliance.

The biggest laughingstock has been the constant rescheduling of the “go live” of the UDB (Union Data Base), now edging to “go live” in Q2 2026.

Finally, the EU plans to review the gas security provisions, and upscaling tariffs has become increasingly painful for the European traders in various countries. This development is expected to continue into 2026.

Notable Updates from Correggio in 2025

Throughout the year, CorreggioNET helped energy companies turn regulatory complexity into practical solutions, supporting compliance, market access, and ongoing operations across Europe and beyond.

2025 was a milestone year for CorreggioNET. We expanded our regulatory intelligence platform for European wholesale power, gas, and sustainability markets with new capabilities; launched our new platform with a more flexible and interactive client interface; and significantly enriched content. A key highlight of the year was the launch of the Sustainability Hub, which gives clients access to information on green certificates, known as renewable electricity Guarantees of Origin (GoOs) in Europe, across more than 30 countries. The launch of the Electricity GoOs marks the start of the coverage, which will expand to encompass biomethane, MER, RNFBO, other sustainable commodities, and environmental legislation.

We’re happy that the CorreggioNET Market Access Library is also live. It offers direct access to our country-specific Market Access Reports (PMERs) for gas and power, offering clear, practical guidance on licensing, regulation, trading, and cross-border activity to support informed market entry decisions.

COLA: AI Support for Contract Work

We leaped into artificial intelligence with the Correggio Online Legal Assistant (COLA), which pioneers the way legal risk management is done for OTC transactions in Europe.

COLA is set to become a key timesaver for contract negotiation, delivering clear answers in seconds through AI and reducing reliance on lengthy legal opinions. It addresses critical issues such as fragmented insolvency laws, close-out netting limitations in insolvency, clearance questions, and inconsistencies in insolvency regimes that affect contract enforceability in power, gas, and renewables trading. Correggio is proud to be the first provider of this powerful niche AI solution, marking an important step toward a future where contracts can be built autonomously from the outset. If you’d like to explore this in more detail, you can watch our podcast on the topic here.

Looking ahead to ‘26

Next year, we will expand into financial regulation and sustainability as we continue to strengthen our core business. Encompassing the financial regulations will be a massive step forward for Correggio and offer a larger market, given the fact that the financial market trades at many multiples of the physical markets, which Correggio currently covers. In sustainability, we will look particularly at new fuels in the aviation and maritime sectors. meaning maritime fuels and aviation fuels. We expect this area of practice to grow with biogas and biomethane regulation. We also anticipate CBAM remaining salient. The EU’s CBAM will likely be complemented with similar tax regimes in Australia, Canada, the UK, and elsewhere. You can also watch our recent CBAM webinar, where we break down the latest developments and what they mean in practice.

Over the past year, we expanded our team to strengthen our legal and market expertise, including deeper capabilities in carbon and environmental commodity markets and a stronger understanding of energy sector regulation. We are also preparing to welcome additional colleagues to further support financial regulatory work and the development of our emerging practice in low-carbon fuels.

Lastly, CorreggioNET will extend its coverage outside of Europe for the first time, to cover the United States. This will mark a whole new chapter, augmenting our coverage and expanding our client base.

We’re looking forward to E-World Energy & Water 2026 this February and to reconnecting with our community once again. This edition is particularly meaningful for us, as Correggio marks its 20th anniversary, two decades of growth, trust, and continuous innovation. ✨

On 10 February, we’ll be in Essen with our partners, clients, and friends to mark this milestone. If you’ll be attending E-World, feel free to book a time to meet us and share the moment together.

Happy New Year to all, and here’s to 20 years with many more ahead.

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For updates on sustainability and clean energy market developments in MENA and beyond; ZETA (Zero Emissions Traders Alliance)