A regional electricity trade report found that Western Balkan power trade with the European Union recovered from the second quarter but remained below year-earlier levels. Wider price spreads and carbon-border costs are complicating cross-border sales as price convergence weakens.
Spreads above €20/MWh occurred in more than half of all hours on borders with EU markets. The report found they occurred more often than in Q2 2026 and more than twice as often as in Q3 2025.
An economic incentive to trade often remained, but physical capacity, carbon costs and market arrangements prevented full price convergence. CBAM has become part of electricity dispatch and trading calculations.
On every assessed border with a non-zero default emission value, the indicative CBAM cost per MWh was higher than the average price advantage of the Western Balkan market over its EU neighbour. Albania was the exception because its default emission value was zero. For other exporters, carbon costs can erase some or all of the apparent wholesale price advantage.
Montenegro’s exports to Italy were around 80% higher year on year in Q3. The submarine cable provides access to Italy’s higher-value market and a route where verified low-carbon generation can remain commercially attractive after carbon-border adjustments.
Generators increasingly need more than competitive production costs to sell across borders. They need verifiable emissions data, clear contractual allocation, reliable metering, scheduling evidence and documentation supporting the use of actual emissions where permitted. Electricity trade is increasingly a combined energy, transmission and compliance product.
Exchange liquidity may deepen through winter, while export margins will continue to depend on transmission capacity and the applicable carbon cost. Contracts and evidence supporting actual emissions, where permitted, can become decisive to the economics of individual trades.
