The European Parliament on Sept. 15 adopted its negotiating position on a broader revision of the EU Carbon Border Adjustment Mechanism (CBAM) by 464 votes to 50, with 159 abstentions. The vote opens negotiations with EU member states on the final legislation. For Serbia’s electricity market, the changes focus on the methodology for electricity imported into the EU as a CBAM good.
The proposed framework would remove the current requirement to demonstrate the absence of physical network congestion along the route to the EU. It would also provide more flexibility for physical power purchase agreements that involve traders and other intermediaries. The package would adapt nomination rules for markets using implicit capacity allocation and market coupling, and it would change how country electricity default values are calculated. None of these elements is yet binding law.
Implications for 2026 electricity exports
For electricity exported during 2026, Serbian generators, traders and their EU counterparties are expected to continue building evidence under existing rules while preparing for a potentially simpler framework. The transition creates a compliance challenge because current transactions must be documented against today’s methodology even as EU rules could be negotiated in a way that affects how those same 2026 imports are treated in the first definitive-period CBAM declarations. The evidence requirements therefore remain tied to the current approach during the build-up period.
Under the current electricity methodology, using actual embedded emissions instead of a national default factor requires multiple conditions to be met at the same time. The electricity must be linked to a qualifying physical power purchase agreement, and the generating installation must stay below a required emissions threshold. Production and firm nomination must correspond within an hourly period, and the exporter must satisfy a network condition.
For Serbian renewable projects, the network test has been described as one of the most difficult requirements to operationalise. A wind or solar producer can control generation meters, SCADA records and plant documentation, while a trader or balance responsible party can retain nominations, cross-border capacity and settlement records. An EU importer can document customs entries and its CBAM declarant identity, but proving hour-by-hour that physical network congestion did not prevent the claimed route is harder because relevant information sits with transmission-system operators and market infrastructure.
The proposed EU reform would delete that congestion condition if retained in final legislation. If implemented, it would remove a major verification bottleneck for Serbian electricity moving toward EU markets, while still requiring evidence overall. Verification would shift toward establishing a coherent relationship between the named generator, contract terms, hourly generation, trading route, allocation to the EU buyer and the final CBAM declaration.
Intermediary structures and hourly traceability
The reform is also relevant because Serbian renewable electricity is rarely exported through a single bilateral arrangement involving one generator and one EU importer. Transactions often involve multiple parties across production, trading and cross-border delivery before reaching an authorised CBAM declarant in the EU. In that context, current methodology can make intermediary structures difficult to fit into an actual-emissions framework.
The proposed changes would allow intermediaries within a PPA chain if there is a verifiable contractual relationship linking the electricity producer, the intermediary or intermediaries, and the EU importer or authorised CBAM declarant. For traders, this could be commercially significant because it aligns more closely with how electricity is traded in southeast Europe, where suppliers and trading companies aggregate generation, manage balancing exposure and secure cross-border positions for producers. Greater contractual flexibility would not remove traceability requirements.
A verifier would still need to establish that electricity claimed by a particular EU declarant can be traced back to an identified Serbian generating installation for the relevant period without double counting. The key test becomes whether each claimed quantity can be reconstructed through commercial and operational chains that connect production to delivery under CBAM reporting.
Even under a simplified regime, hourly data is expected to remain central to actual-emissions claims. For Serbian renewable generators, evidence is expected to connect installation details through meter data and production hours to PPA arrangements, trader allocations, cross-border transactions and EU importer or declarant records before reaching verified quantities. Where explicit cross-border capacity is used, nomination evidence remains important.
Where electricity moves through markets using implicit allocation and market coupling, the amended CBAM methodology is expected to recognise that traditional bilateral nomination models do not fully reflect how such markets operate. This could become more significant as Serbian and regional markets deepen integration with EU day-ahead and intraday market coupling. As a result, evidence systems are expected to record whether delivery occurred through explicit capacity allocation or implicit market coupling while retaining producer-specific and declarant-specific evidence needed for verification.
Guarantees of Origin separate from actual emissions
The reform should not be interpreted as making Guarantees of Origin sufficient evidence for CBAM purposes. A GO can demonstrate the renewable attribute associated with electricity, but CBAM actual emissions require an evidence chain linking emissions values to the relevant generating installation and to electricity claimed by an EU declarant. For Serbian renewable producers, this means value depends on having both renewable attributes and verifier-ready documentation tied to installation-level emissions claims.
The verifier-ready package described in the source includes plant identity and meter hierarchy as well as hourly generation data. It also covers PPA chain documentation, trading allocation details and relevant nomination records tied to delivery into the EU by an identified declarant. Emissions information accepted by an accredited verifier is also part of that package.
Data flows toward EU declarants
Responsibility for CBAM declarations remains with an authorised CBAM declarant in the EU. However, much of the information needed to support those declarations originates outside the EU. That means EU importers and traders may increasingly seek contractual rights to obtain data from Serbian generators, suppliers and trading counterparties.
CBAM clauses are therefore likely to migrate into electricity PPAs and trading agreements alongside provisions covering price, delivery, balancing, credit and settlement. The source lists potential data requests that could include installation identification; meter and generation records; Monitoring Plan information; verified emissions data; hourly allocation data; PPA evidence; trading and nomination records; documentation supporting relevant cross-border routes; and cooperation with an accredited EU verifier.
Default factors and verification timelines
The proposed reform would also change how electricity default values are calculated for CBAM reporting. Instead of relying on a factor focused on fossil electricity generation, it would use an average grid emissions factor reflecting the wider electricity mix including renewable generation. For Serbia this could matter even where exporters cannot meet all conditions required for actual emissions claims.
A cleaner national generation mix could lower default CBAM emissions values applied to Serbian electricity over time according to the source material. That could create two commercial pathways: exports using applicable Serbian default factors or exports linked to specific renewable installations supported by sufficient evidence for lower verified actual-emissions values. The difference between those pathways could affect pricing in electricity deals alongside PPA negotiations and trader margins.
The legislative changes are being negotiated as verification arrangements come online in parallel within the EU system described in the source material. Accredited CBAM verifiers are entering the Registry system from September 2026, while installation reviews, Monitoring Plan assessments, evidence testing and site visits are expected ahead of first definitive-period verification reports in 2027. For Serbian exporters, waiting until annual declaration cycles could create risk because meter data, nominations, allocations and contractual evidence are generated continuously.
The source describes a practical approach involving pre-verification during the reporting year by testing whether an evidence chain can withstand an EU verifier’s review before final assurance engagement. It also notes that removing congestion-evidence requirements would eliminate one of the hardest elements under current methodology while recognising intermediary PPA structures better reflects regional trading practices.
At issue throughout remains traceability tied to each MWh claim under CBAM rules: exporters and importers must demonstrate where power was produced when it was produced under which contractual chain it was delivered which EU declarant received allocation and which accredited verifier accepted underlying evidence. Cross-border trading itself remains described as business as usual for Serbia’s renewable sector as attention shifts toward ensuring evidence travels with each MWh into CBAM declarations.
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