Montenegro is increasing the effective carbon cost carried by state power utility EPCG to €75 per tonne of CO₂. EPCG board president Milutin Đukanović said the utility will pay the full market price into the Eco-Fund under Montenegro’s emissions-trading framework. The change is estimated to create an annual burden of about €70 million.
Đukanović said EPCG will pay the full €75/t market price into the Eco-Fund, compared with a previous minimum level of around €24/t. The higher charge comes at a time when Pljevlja remains one of Montenegro’s most important domestic generation assets. It is particularly relevant during periods of weak hydrology when hydroelectric production falls.
Impact on coal generation and regional wholesale price spreads
A substantially higher carbon charge raises the marginal cost of coal-fired power at Pljevlja. It also narrows the difference between generating domestically and importing electricity from neighbouring markets. The calculation is becoming more important as Southeast European wholesale prices swing between cheap renewable-heavy periods and expensive scarcity hours.
CBAM implications and EPCG revenue effects
The higher domestic carbon price also affects electricity exports into the European Union under CBAM. Where domestic carbon costs meet relevant EU rules and can be demonstrated, they can reduce residual carbon liability attached to imported electricity. This can improve the position of Montenegrin electricity compared with exports from markets where carbon remains largely unpriced.
EPCG said uncertainty around CBAM already reduced first-quarter revenue by around €12-13 million. The new €75/t level therefore affects both generation costs and how exporters assess EU border-carbon exposure. For EPCG, replacing high-carbon generation increasingly depends on adding enough solar, wind, hydro flexibility and storage to protect supply without shifting costs into imports.
An annual carbon burden of about €70 million makes that transition less of a long-term policy choice and more of an immediate balance-sheet issue.