Serbian exporters and electricity traders face a split regulatory position in late 2026: EU Carbon Border Adjustment Mechanism (CBAM rules) are binding, while changes that could ease Serbian electricity exports remain under negotiation in Brussels. Companies must comply with the rules in force when imports take place, not those they expect negotiations to produce.
Current CBAM obligations and proposed electricity changes
CBAM entered its definitive phase on January 1, 2026. On August 14, the European Commission published guidance for that phase covering electricity, iron and steel, aluminium and other sectors, then updated its general questions and answers on October 15. The 50-tonne de minimis threshold for cement, iron and steel, aluminium and fertilisers does not apply to electricity or hydrogen, so EU importers cannot assume a small Serbian electricity transaction is exempt based on its volume or value.
The European Commission’s proposal, COM(2025) 989, would make several changes to the electricity methodology. Among other measures, it would broaden the treatment of PPAs involving intermediaries, remove the existing network condition in Annex IV point 5(b), and revise the nomination test. It also proposes changing the methodology for attributing embedded emissions to encourage decarbonisation in third-country electricity systems.
The proposal has advanced politically but is not final law. The Council agreed its position on June 12, 2026, and the European Parliament adopted its first-reading position on September 15 before returning the file for interinstitutional negotiations. Serbian developers and traders should therefore model two scenarios: operations under current law and a reform case showing the potential effect if amended rules become applicable.
Contracts, historical data and financing
Contracts should distinguish between current requirements and possible future changes. A change-in-law clause could allow a PPA to move to a broader intermediary structure after a clearly defined legal trigger, but that trigger should be the publication and application of an adopted rule, not a political announcement. Historical evidence should remain tied to the legislation that applied when the electricity was imported.
Reconstructing or rewriting historical data under a later methodology could add audit risks rather than resolve the underlying compliance issue. The same caution applies to project finance: investors should not capitalise a higher expected export premium solely on the assumption that the Commission’s proposal will make qualification easier. Banks are likely to assess whether projects remain viable under rules currently in force, treating reform as optional upside until the final legal text, application date and implementing requirements are established.
Proposed expansion into downstream products
The European Commission has also proposed extending CBAM further down industrial supply chains, adding 180 steel- and aluminium-intensive downstream products from 2028. The Council’s position expanded the proposed list to around 200 products, while the European Parliament supported a substantially broader list of 457 products. The final scope remains under negotiation, with the proposed expansion taking CBAM deeper into industrial supply chains beyond its focus on basic materials.
This issue is relevant to Serbia given its strong trade links with the European Union. Serbian goods exports reached approximately EUR 23.7 billion in January-August 2026, up 8.8% year on year, while EU member states accounted for 58.3% of Serbia’s total external trade. Companies whose products are not currently covered by CBAM should begin mapping where steel and aluminium inputs enter goods ultimately sold into the EU market.
Preparing for current and future requirements
Serbian exporters should not wait for the outcome of negotiations in Brussels. Companies should maintain compliance with current rules, build flexible data systems able to accommodate changes to the electricity methodology, and include appropriate conversion mechanisms in long-term contracts. Regulatory flexibility can create commercial value, but assuming a future benefit before it becomes legally effective carries financial risk.
Supported by CBAM.Clarion.Engineer