CO2 price for island electrical systems 2025: impact on generators and distributors

Key data

Electricity generating and distributing companies operating in non-peninsular territories have a new regulatory parameter that conditions their settlements for the 2025 financial year. The Resolución de 16 de marzo de 2026 de la Dirección General de Política Energética y Minas approves the CO2 emission rights settlement price for the Canary Islands, Balearic Islands, Ceuta and Melilla.

This price is not an additional cost that companies pay directly to the carbon market: it is the technical-regulatory value that the system uses to calculate how much each generator is remunerated for its production in these territories, where dependence on fossil fuels is structurally greater than on the mainland.

What does this regulation establish?

The resolution sets a single parameter: the CO2 emission rights price applied in the settlement process of the electrical system in non-peninsular territories for the year 2025.

This value is an input in the generation cost calculation models recognised by the regulator. In island and extra-peninsular systems, electricity generation depends largely on thermal units burning fossil fuels (diesel, fuel oil, gas). The cost of CO2 emission rights that these units must bear forms part of the recognised generation cost, and therefore affects the settlements received by operators.

The correct setting of this value has two direct effects:

• Adequate remuneration for operators: if the recognised CO2 price diverges from the actual market price, generators may be under- or over-remunerated.
• Economic sustainability of supply: an adjusted remuneration ensures that operators can maintain activity in territories where electricity supply cannot be interrupted.

The affected territories are four distinct electrical systems, all outside the interconnected peninsular system:

Economic and operational impact

The approved CO2 emission rights price affects two major economic items for companies in the sector:

Generation settlements: the amount that the system recognises and settles to each generator for its production in 2025 incorporates this price as a calculation variable. A variation in this parameter compared to previous years may result in significant differences in recognised revenues, especially for operators with high thermal output.

Extra-peninsular system costs: these costs, which are financed through the national electricity system's tolls and charges, are conditioned by the level of the recognised CO2 price. A higher price implies higher recognised generation costs and, consequently, a greater impact on the system as a whole.

From an operational standpoint, affected companies must ensure that their management and regulatory accounting systems incorporate the approved value for the close of the 2025 financial year and for any review or claim of settlements.

Who is affected?

This resolution directly affects:

• Electricity generating companies operating generation units in the Canary Islands, Balearic Islands, Ceuta or Melilla, especially those with thermal production using fossil fuels.
• Electricity distributing companies in these four territories, whose tariffs and budgets are conditioned by the recognised generation costs.
• CFOs and financial directors of these companies, who must incorporate the parameter into the accounting and regulatory close of the 2025 financial year.
• Regulatory advisors and energy consultants who manage settlements or claims before the regulator on behalf of operators in these systems.

It does not affect companies in the peninsular electrical system or industrial or commercial consumers directly.

Practical example

A generating company operating several diesel units in the Canary Islands for the 2025 financial year must calculate the recognised cost of its CO2 emissions associated with that production. To do so, it applies the emission rights price approved in this resolution to the volume of emissions corresponding to its generation for the year.

If that price differs from what the company had estimated in its financial planning (for example, because it used the European ETS market price as a reference without regulatory adjustment), the result of the final settlement may differ from the budgeted figure. This can generate a positive or negative deviation in the recognised revenues for the financial year.

For this reason, the critical step for any affected generator is to verify that the price approved in this resolution matches the one used in its internal 2025 settlement calculations, and to correct any deviation before the final settlement process closes.

What should companies do now?

1. Locate and read the full resolution: access the complete text in the BOE (reference BOE-A-2026-7628) to identify the exact value of the CO2 emission rights price approved for 2025.
2. Compare with the price used in internal settlements: verify whether the approved value matches the one the company has applied in its 2025 financial year settlement calculations. Identify any deviation.
3. Update regulatory calculation models: if a deviation exists, correct the generation cost and settlement calculation models with the officially approved value.
4. Review the impact on budgets and accounting closes: the CFO or financial officer must assess whether the difference between the estimated and approved price generates a relevant adjustment in the recognised revenues or costs for the 2025 financial year.
5. Coordinate with the regulatory team: ensure that the regulatory team or external advisor incorporates this parameter into any pending claim, submission or communication with the regulator regarding 2025 settlements.

Official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, please consult a qualified professional. Source: https://www.boe.es/diario_boe/txt.php?id=BOE-A-2026-7628