Serbian wind and solar developers seeking access to lower carbon costs in the European Union now face a route-to-market decision that goes beyond simply selling renewable electricity. Under the European Commission’s emerging framework, each qualifying electricity export must be connected to a named EU importer through a traceable physical supply chain, reducing the value of anonymous exchange trading for CBAM compliance.
The new guidance provides accredited verifiers with their first detailed methodology for auditing electricity imported under the EU’s Carbon Border Adjustment Mechanism, or CBAM. It could also accelerate the development of specialised cross-border power purchase agreements between Serbian generators and EU traders, suppliers and industrial consumers.
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The framework points towards a two-tier market for Serbian renewable electricity: plant-specific power supported by physical contracts, hourly nominations and verified emissions on one side, and conventional exchange-traded electricity assessed using EU default emission values on the other.
The distinction is significant because electricity itself is a CBAM good, classified under customs code CN 2716 00 00. It is not simply an input used to reduce the emissions associated with steel, aluminium or other carbon-intensive products.
CBAM entered its definitive phase on 1 January 2026, requiring importers to account for emissions embedded in electricity and other covered goods entering the EU. Electricity is excluded from the general 50-tonne small-importer exemption, meaning that even relatively small commercial electricity flows can fall within the system.
Under the EU framework, electricity imports are normally assigned a default emissions value. An importer may instead use the actual emissions of an identified Serbian wind, solar or hydroelectric installation, but only when several cumulative conditions have been satisfied.
The current rules require a power purchase agreement between the Serbian generator and the authorised CBAM declarant, evidence of an eligible physical transmission route, a generating installation with emissions no higher than 550 grams of fossil CO₂ per kilowatt-hour, firm cross-border capacity nominations and verification by an appropriately accredited organisation.
Generation and nominated electricity imports must correspond within the same measurement period, which cannot exceed one hour. The verifier must also receive interim evidence at least monthly.
For wind and solar projects, the plant-emissions threshold should normally present little difficulty. The greater challenge is proving that the electricity imported by a specific EU company in a specific hour can be reliably linked to the output of the identified Serbian installation.
The Commission’s methodology therefore shifts the centre of CBAM electricity compliance away from the renewable certificate and towards the transaction itself.
A Serbian guarantee of origin can demonstrate the renewable characteristics associated with electricity, but it does not replace the required PPA, transmission capacity, hourly nomination and verification evidence. Ownership of certificates alone will generally not allow an importer to apply the near-zero actual emissions factor of a named Serbian renewable plant.
The strongest commercial structure is consequently a physical PPA under which a Serbian generator sells electricity to an EU trader or supplier that also acts as the importer and authorised CBAM declarant.
That company can secure cross-border capacity, nominate the electricity, complete the import process and subsequently resell the power through an EU exchange or deliver it directly to an industrial customer.
In a potential Serbia-Hungary structure, for example, a Serbian wind farm could contract with an EU trader, match plant output against accepted cross-border nominations and import the electricity before selling the resulting position on HUPX. In that model, the exchange functions as the resale venue after import rather than as the mechanism for establishing the Serbian electricity’s origin.
CBAM liability arises when the electricity enters the EU customs territory. A subsequent exchange transaction does not retrospectively change the emissions attributed to that import, provided the importer has already established and verified the required plant-to-border chain.
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The reverse structure is considerably weaker.
If electricity from a Serbian renewable installation is first placed into an anonymous wholesale market and an EU participant later purchases an equivalent volume, the buyer will generally lack the bilateral producer relationship and plant-specific evidence required to apply actual emissions.
The conservative regulatory assumption in such a case is that the electricity import will be assessed using the applicable default value, even where the buyer separately acquires renewable certificates.
This creates an important distinction between selling verified Serbian electricity on an EU exchange after import and relying on an exchange purchase to establish that imported electricity originated from a particular Serbian generator.
Direct sales to EU industrial consumers may also qualify, but only where the industrial buyer itself acts as the importer and authorised CBAM declarant, or uses an eligible indirect customs representative.
A European factory that signs a financial or virtual PPA with a Serbian solar project while continuing to purchase its physical electricity from a conventional EU supplier would not automatically become an importer of that Serbian electricity. The financial agreement may hedge prices or support renewable development, but it does not establish the required physical CBAM chain.
A more practical structure may involve an EU energy supplier importing the Serbian electricity and subsequently reselling it to the industrial customer. In that arrangement, the supplier assumes the CBAM obligation, applies the verified Serbian emissions value and passes the electricity, renewable attributes and agreed carbon costs through a downstream supply agreement.
The industrial customer would not become the authorised declarant simply because it ultimately consumes the electricity.
Intermediaries introduce another layer of complexity. Under the rules currently in force, electricity purchased through an intermediary must generally be supported by a tightly integrated three-party contractual arrangement involving the generator, intermediary and authorised CBAM declarant.
A sequence of separate contracts—from the Serbian producer to a local trader, then to an EU trader and finally to an industrial customer—does not automatically constitute a qualifying PPA.
The Commission proposed changes in December that could make such structures easier by allowing a verifiable contractual chain involving one or more intermediaries. Its impact assessment referred to several Serbian PPAs under development with combined capacity of approximately 0.3 GW, while noting that formal cross-border PPAs remained relatively uncommon.
The proposed legislation would also remove the current requirement to demonstrate the absence of physical network congestion between the Serbian installation and the EU transmission system.
That change could simplify exports through Serbia’s interconnections with Hungary, Romania, Bulgaria and Croatia, particularly where several transmission system operators are involved.
The proposal would nevertheless introduce a potentially important restriction by clarifying that the firm-nomination criterion is not satisfied where cross-border capacity is allocated implicitly through market coupling.
Implicit allocation combines electricity and transmission capacity within a single exchange auction. Although this improves market efficiency, it can make it more difficult to reserve and trace capacity for electricity originating from a particular generating installation.
The proposed treatment therefore highlights a fundamental tension between European power-market integration and CBAM’s demand for producer-specific physical traceability.
The EU Council adopted its negotiating position in June 2026, while the European Parliament’s first-reading vote is expected in September. Until any amendment is formally adopted and enters into force, exporters and importers must continue to comply with the existing requirements, including the congestion test and the narrower PPA structure.
The new verifier methodology does not alter those legal requirements. Instead, it establishes how compliance with them is expected to be examined.
A verifier handling electricity imports must be accredited for activity group LI, covering electricity entering the EU customs territory. Verification of electricity used to calculate indirect emissions in another CBAM product falls under the separate LII scope.
The LI verifier must conduct a pre-contract review and strategic risk analysis, develop a verification programme, test the operator’s controls and data, perform site activities where required and submit the final opinion for independent internal review.
For Serbian renewable installations, the main risks are likely to arise not from emissions calculations themselves but from inconsistencies between settlement meters, SCADA data, PPAs, trading records, capacity rights, TSO nominations and importer allocations.
The producer’s monitoring plan must define the installation boundary, authoritative meters, auxiliary consumption, net generation, hourly time synchronisation, procedures for data gaps, calibration controls and the allocation of electricity to each importer.
The relevant activity level is the net electricity leaving the installation boundary after internal consumption. For each claimed hour, the eligible CBAM quantity should be limited to the defensible overlap between net production, contracted PPA volume, accepted nomination, cross-border import and declarant allocation.
The Serbian operator must provide monthly evidence enabling the verifier to reconcile those quantities. At year-end, it must prepare a separate addendum for each authorised declarant, identifying the importer through its EORI number and confirming the quantity imported from the installation for which the actual-emissions conditions were satisfied.
The verifier is therefore not simply confirming that a wind or solar plant has negligible operational emissions. It is confirming that a defined quantity imported by a named declarant from that installation satisfies the complete legal chain.
The process will increasingly operate through the EU’s CBAM Registry. Serbian operators can use the third-country installation portal, known as O3CI, to register installations, maintain emissions information, establish collaboration with an accredited verifier and share verified data with authorised declarants.
Verifier registration in the system opens from 1 September 2026, while the first verification reports can be issued through the Registry from January 2027.
The Commission’s approach turns electricity verification into a year-round assurance process rather than an annual documentation exercise. Producers that begin exporting before establishing their monitoring plans, meter hierarchy, contractual structure and nomination controls risk discovering after the reporting year that some or all of their electricity cannot qualify for actual values.
Contracts will also need to allocate the commercial consequences of failed verification. These provisions are likely to address CBAM certificate costs, default-value fallback, carbon-price changes, verification expenses, data rights, renewable attributes and liability for double counting or unsupported volumes.
For Serbian generators, the emerging premium product is therefore not simply “green electricity”. It is electricity whose production, contract, transmission and import can all be demonstrated for the same hour and the same authorised declarant.
For now, the most defensible route remains a physical PPA with the EU importer, traceable cross-border capacity, hourly reconciliation of production and nominations, monthly reporting and verification by an LI-accredited body.
Once that electricity has crossed the border under a verified import structure, it can be sold on an EU exchange or delivered to a final customer. What cannot safely be done is buy anonymous power first and reconstruct a Serbian renewable origin afterwards.
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