Renewable electricity producers in Serbia, Montenegro and other Western Balkan markets face a commercial barrier to EU exports: low-carbon generation alone does not qualify electricity for actual-emissions treatment under the Carbon Border Adjustment Mechanism (CBAM). The Energy Community Secretariat identified the verification difficulties in its Q2 2026 assessment, issued in July 2026, and warned that failure to demonstrate actual emissions could increase compliance costs and create uncertainty over future electricity revenues.
Requirements for actual-emissions treatment
Under the applicable EU framework, including Regulation (EU) 2023/956 and Implementing Regulation (EU) 2025/2547, eligibility depends on cumulative contractual, physical, emissions, timing and verification conditions. Electricity must be covered by an eligible power purchase agreement (PPA), while the generating installation must meet the relevant network-connection or absence-of-congestion requirement. The installation must not exceed 550 grams of fossil-origin CO₂ per kWh.
Generation and the relevant interconnector capacity nominations must correspond within the same period, which cannot exceed one hour. An accredited verifier must certify compliance, supported by interim reporting. The framework therefore requires evidence not only about the electricity’s emissions but also about how it was contracted and delivered.
A conventional renewable PPA and guarantees of origin may demonstrate contractual procurement and renewable attributes, but do not by themselves establish compliance with the complete CBAM electricity methodology. Wind, solar and hydropower can have very low direct carbon emissions, yet that characteristic alone does not establish the emissions value an EU importer can use for CBAM purposes.
These conditions can be difficult to demonstrate when renewable generators sell through intermediary traders, balancing portfolios or commercial arrangements involving multiple counterparties. Developers increasingly need a traceable evidence chain from the power plant to the EU importer, showing that electricity attributed to a specific installation meets the contractual, physical and timing requirements.
Commercial exposure and project records
The evidence chain can include generation metering, SCADA production records, PPA documentation, physical delivery schedules, transmission capacity nominations, balancing records and independent verification. The requirements are particularly relevant to Serbian wind and solar projects seeking access to Hungary, Croatia or Romania, and to Montenegrin generators targeting Italy.
In an illustrative scenario, the Secretariat estimated €8.9 million in opportunity costs over six months for a 130 MW onshore wind project if its output had to be sold locally rather than accessing higher-priced EU markets under the assumptions considered. The estimate is a modelled risk scenario, not a reported loss at a specific generating facility.
Proposed EU amendments could make some aspects of actual-emissions reporting more flexible, but they should not be treated as enacted requirements while the legislative process continues. The emerging competitive distinction is between low-carbon electricity with a compliant, verifiable delivery structure and low-carbon electricity that cannot establish the required regulatory evidence. For Western Balkan renewable developers, emissions verification is becoming part of electricity commercialisation alongside grid connection, forecasting, balancing and power sales.
