Europe’s industrial landscape is undergoing a fundamental transformation: decarbonisation is no longer a voluntary exercise, and renewable electricity sourcing has become a procurement prerequisite. Serbia, as a major nearshoring destination, must align with this shift. As serbia-business.eu and serbia-energy.eu both highlight, European manufacturers increasingly require their suppliers to prove renewable electricity usage through long-term PPAs (Power Purchase Agreements) or verifiable green tariffs.
The question is no longer whether Serbian exporters will need PPAs. The question is when PPAs become mandatory for maintaining access to the European market.
PPAs serve three strategic functions:
• price stability in a volatile energy region;
• carbon compliance for entering European tenders;
• long-term competitiveness against regional rivals with stronger RES integration.
Electricity volatility in the SEE region is structural. Hydrology shocks, gas-price swings, seasonal renewable fluctuations and cross-border congestion all contribute to unstable day-ahead pricing. Serbian exporters operating under fixed-price contracts cannot absorb this volatility indefinitely. PPAs provide a hedge by locking in predictable electricity costs for 5–15 years.
But stability is only the first layer. The second—and more decisive—layer is carbon compliance. European buyers now expect suppliers to deliver low-carbon goods. Steel fabricators, machinery manufacturers, electronics producers and EV-component suppliers must demonstrate that their production relies on renewable energy. Firms that cannot provide such documentation risk losing tender points or being excluded altogether from certain procurement processes.
For sectors like fabrication and machinery, PPAs are especially critical. FAT cycles for HVAC systems, refrigeration modules, and industrial machinery consume large amounts of electricity. Without renewable sourcing, the carbon footprint of these processes inflates rapidly. CBAM may expand to cover manufactured components in the coming decade, making renewable PPAs not just advantageous but essential.
Electronics and power-systems manufacturers face the same trend. EU buyers increasingly view low-carbon production as a requirement for switchgear, inverters, control cabinets and transformer subcomponents. Renewable PPAs also provide marketing differentiation in a highly competitive sector.
The automotive EV supply chain is even more demanding. OEMs require Tier-2 and Tier-3 suppliers to submit carbon-transparency reports. Without renewables, Serbian EV suppliers risk being graded as high-carbon producers, limiting their access to long-term contracts.
Given these dynamics, Serbia’s exporters will likely need PPAs before 2030. The only question is how quickly the market and regulatory environment will allow broad adoption.
To meet this requirement, Serbia must scale renewable generation at a pace far exceeding current installations. Wind and solar developers need clear regulatory certainty to offer long-term bilateral PPAs. Grid modernisation is also necessary to accommodate fluctuating RES output.
If Serbia enables a mature PPA market by 2027–2028, its exporters will be well positioned for the next decade. If not, Serbia risks falling behind regional competitors like Romania and Greece, which are accelerating RES integration and offer more PPA options.
PPAs are more than an energy contract—they are the new industrial passport to Europe. By 2030, they may become the default requirement for Serbian exporters seeking to remain competitive in green European supply chains.
Elevated by clarion.energy
