CBAM is adding revenue and financing risk to renewable electricity projects in Serbia, Montenegro and the wider Western Balkans, where access to European Union market revenues may depend on emissions evidence and the allocation of related costs. The Energy Community Secretariat’s Q2 2026 CBAM assessment identifies difficulties with verification, power purchase agreement eligibility and access to favourable EU prices.
Cross-border electricity sales have helped make merchant revenues and long-term power purchase agreements attractive to regional renewable generators. Higher wholesale prices in neighbouring European markets can offer additional revenue beyond domestic sales, but the assessment finds that a project’s ability to generate and deliver electricity does not by itself establish eligibility for actual-emissions treatment under the applicable EU methodology.
If a project cannot meet that methodology’s requirements, default emissions treatment may add costs to electricity imported into the EU and change the export price a generator can achieve. The resulting exposure applies both to operational projects and assets under development, and carbon compliance can affect bankability even when a project’s generating technology has very low direct emissions.
A long-term export PPA may provide a relatively predictable electricity price, but the share of CBAM-related costs borne by the generator, trader or EU importer can affect the revenue ultimately available to the project company. Export arrangements that satisfy actual-emissions requirements may preserve a stronger commercial relationship with EU buyers, while default treatment can weigh on cross-border sales.
Revenue assumptions and contract allocation
Financing assessments may need to compare three cases: domestic sales without export-related CBAM obligations, cross-border sales under default emissions treatment, and exports structured to meet actual-emissions requirements. The different cases can alter assumed electricity prices, operating cash flow, debt-service capacity and project valuation, making CBAM readiness part of project bankability rather than a matter deferred until exports begin.
Export-oriented PPAs increasingly need to set out who provides emissions evidence and handles verification, as well as how the parties respond to changes in CBAM legislation. The assessment also identifies transmission capacity, balancing electricity and liability if required evidence is unavailable as issues for contractual allocation.
Without clear terms, disagreements could arise among generators, electricity traders and EU importers after electricity has been commercially delivered. A project’s financing case therefore depends not only on its expected generation and sale price, but also on whether its contractual structure assigns these responsibilities.
Banks and investment funds need to assess whether an export route is commercially realistic, whether nominated electricity can be linked to eligible generating assets, and whether counterparties can provide the required regulatory evidence. Their review also needs to consider accredited verification services and whether project metering and scheduling systems have the technical capabilities needed to support that evidence.
Interconnections shape export options
Montenegro’s connection with Italy and Serbia’s interconnections with Hungary, Romania and Croatia are particularly relevant to projects seeking access to European wholesale electricity prices. Those routes may form part of an export strategy, but the assessment’s findings make clear that access to a cross-border route does not alone resolve the emissions-evidence and revenue questions.
Developers that address CBAM requirements during project preparation may be better positioned to negotiate export agreements and demonstrate revenue resilience to lenders. By contrast, projects whose financing assumes unrestricted EU market access without verification may face higher financing risk or more conservative lender revenue forecasts.
The emerging investment standard is a project with a sales structure, documentary controls and contractual allocation of risk that support its intended market revenues, rather than one assessed only on its ability to generate electricity at competitive cost. The assessment says the exposure can be relevant to both projects already operating and those still being developed.
