CBAM

Western Balkan electricity trade with the European Union recovered from the second quarter but remained below year-earlier levels. Wider price spreads, weaker convergence and CBAM costs are complicating cross-border sales.

Low-carbon electricity from Western Balkan renewable projects will not automatically qualify for actual-emissions treatment under the EU’s CBAM. The Energy Community Secretariat modelled €8.9 million in opportunity costs for a 130 MW wind project over six months if it had to sell locally instead of accessing higher-priced EU markets.

Scheduled electricity exchanges between the Western Balkans Six and neighbouring EU markets fell 17.8% in January–September 2026, while regional day-ahead trading volumes rose 26.7% year on year in the third quarter. The Energy Community Secretariat’s assessment links the diverging trends to a market in which CBAM costs and conditions increasingly shape cross-border trade.

EU electricity importers must declare embedded emissions and surrender CBAM certificates for power imported in 2026 by 30 September 2027. Certificate purchases begin in February 2027, making emissions evidence and the allocation of costs relevant to electricity contracts.

The Energy Community Secretariat called for closer coordination between Western Balkan electricity market integration and the EU’s carbon border rules. It warned that poorly aligned arrangements could discourage renewable investment and divide EU and non-EU electricity markets.

EU carbon-border rules could affect the prices and revenues available to renewable projects in Serbia, Montenegro and the wider Western Balkans. Lenders may need to distinguish between domestic sales, exports under default emissions treatment and exports meeting actual-emissions evidence requirements.