The European Union’s Carbon Border Adjustment Mechanism (CBAM) is changing electricity trading economics across Southeast Europe, increasing the gap between wholesale power values and the carbon-adjusted cost of imports from the Western Balkans. The effect is set to start from the beginning of 2026, with electricity imports not receiving free-allocation relief comparable to that available for some industrial sectors.
CBAM certificate pricing for the third quarter reached €82.32 per tonne of CO₂, up from €75.28 in the preceding quarter. Using existing national default emissions factors, the indicative gross CBAM exposure is estimated at about €85.70/MWh for Serbia, €80.59/MWh for Montenegro and €94.50/MWh for Bosnia and Herzegovina. North Macedonia is indicated at €73.01/MWh, while Albania’s zero default factor results in no carbon charge under the default calculation.
The figures are described as illustrative amounts based on the third-quarter certificate price rather than final charges for October deliveries. The fourth-quarter certificate price will be set in January 2027, and liabilities may reflect eligible deductions for carbon prices paid in the country of origin. The reported levels are also presented as an example of how CBAM can affect electricity trading margins.
On October 9, Serbia’s SEEPEX day-ahead price rose to €239.96/MWh, nearly 34% higher than the prior session. Hungary’s HUPX reached €269.43/MWh, leaving a daily average spread of €29.47/MWh. The difference was described as substantially below Serbia’s indicative default-based carbon exposure.
The same day, Montenegro’s BELEN price reached €223.39/MWh. Italian wholesale prices in several bidding zones were around €230–235/MWh, producing a narrow indicative differential for electricity delivered through the Montenegro–Italy interconnection. Daily average spreads were noted as not being executable margins, with hourly variations able to create individual opportunities.
Regional flows and CBAM-linked commercial separation
The Energy Community Secretariat has identified changes in regional electricity flows, including a decline in gross commercial exchange between Western Balkan and neighbouring EU markets by about 19% year on year in the first half of 2026. Hydrological conditions, generation availability and changing import requirements were also cited as contributing factors. The market is described as increasingly split into domestic and regional trading segments, where EU CBAM import charges do not directly apply, and exports into EU markets, where carbon-adjusted costs affect transaction profitability.
For Serbian utility EPS, Montenegrin EPCG and power producers in Bosnia and Herzegovina, the new environment increases emphasis on generation technology, electricity origin and proof of actual emissions. This distinction is highlighted as particularly relevant for renewable energy projects exported into EU markets.
Renewables exports depend on evidence for actual emissions
A Serbian wind farm producing low-carbon electricity does not automatically qualify for favourable CBAM treatment when its output is exported to Hungary. Unless an EU declarant meets conditions to use actual embedded emissions, exported electricity can remain subject to Serbia’s national default value under CBAM rules.
The rules require a qualifying physical power purchase agreement, evidence of the generating installation, compliant cross-border capacity nominations, hourly matching between generation and nominated deliveries, and evidence regarding grid connection or absence of congestion. An accredited verifier must assess supporting information, and guarantees of origin alone cannot replace this physical and contractual evidence.
For project developers and lenders, a wind or solar project may generate electricity competitively while still facing uncertainty over additional value from selling directly into the EU. The impact can extend to projected revenues, long-term power purchase agreements, financing assumptions and investment cases for new renewable capacity.
Industrial coverage differs by product type under current CBAM rules
The regulatory distinction also affects industrial manufacturers under current CBAM coverage. Indirect emissions from purchased electricity are included in CBAM liability for cement and fertilisers, but not generally for iron, steel and aluminium where liabilities focus on direct embedded emissions.
Sourcing renewable electricity therefore does not automatically reduce the current CBAM certificate obligation of a Serbian steel or aluminium exporter. It can still lower operating costs, improve corporate emissions performance and support supply relationships with European manufacturers seeking lower-carbon materials.
For cement and fertiliser producers, qualifying lower-emission electricity can influence carbon intensity used in CBAM calculations, subject to applicable methodology and verification requirements. The European Commission has proposed changes to electricity CBAM methodology that could reduce disadvantages faced by renewable generators in countries whose default emission factors reflect carbon-intensive thermal production; adoption status was described as incomplete.
Timing of certificates and compliance deadlines
Banks financing renewable energy projects, electricity-intensive manufacturers or cross-border trading businesses face additional revenue, margin and regulatory risk tied to CBAM requirements. New project assessments are described as needing separation between conventional wholesale electricity revenues and revenues supported by verified CBAM-compliant physical export arrangements. Existing loans may require reassessment if earlier models assumed uninterrupted access to EU wholesale price premiums.
The first CBAM certificates covering 2026 electricity imports will be purchased from February 2027, with annual declarations and certificate surrender due by September 30, 2027. For Southeast Europe, the challenge is that physical interconnection remains while commercial economics increasingly diverge based on carbon classification and transaction evidence.
A megawatt-hour produced in Serbia or Montenegro can still reach a European buyer through interconnected transmission networks. Whether it can be sold profitably will increasingly depend on its carbon classification and supporting evidence rather than only on differences between wholesale prices across the border.