On Sept. 7, the European Commission proposed mutual recognition of renewable Guarantees of Origin, or GOs, between EU member states and Energy Community Contracting Parties. The initiative is aimed at expanding the certificate market for renewable generators in Serbia and other Western Balkan countries. The proposal would not change the evidence requirements for electricity imported into the EU under the Carbon Border Adjustment Mechanism.
If adopted and implemented for Serbia, the framework could raise the commercial value of Serbian renewable electricity by enabling eligible certificates to be recognised more broadly across EU markets. However, it would not automatically make the underlying electricity eligible for the CBAM actual-emissions methodology. The Commission’s proposal therefore separates the treatment of certificate attributes from the separate CBAM process tied to imported electricity.
Mutual recognition framework for Guarantees of Origin
Serbia already runs an electronic guarantees-of-origin system that allows renewable generators to issue certificates linked to eligible electricity production. Under the Commission proposal, certificates from compliant Energy Community countries could eventually be recognised across EU markets. Recognition would require a formal assessment rather than immediate eligibility.
Serbia would need to show full implementation of adapted EU renewable-energy and electricity-market legislation. It would also have to maintain a compliant GO registry and control system, meet monitoring and enforcement requirements, and complete technical transfer testing with EU issuing bodies. After that, the Commission would assess whether Serbia could be admitted to the mutual-recognition framework.
The proposed approach therefore creates a potential market opportunity for Serbian wind and solar producers rather than automatic access to EU recognition. If Serbia qualifies, generators could reach a broader pool of corporate and utility buyers seeking renewable attributes. The measure could support GO prices and influence corporate power purchase agreement structures for buyers with renewable procurement targets.
GO transfers differ from CBAM actual-emissions claims
The Commission proposal also reflects a regulatory principle that guarantees of origin can be transferred independently of physical electricity flows. That separation is described as fundamentally different from CBAM requirements. For CBAM, electricity imported into the EU is subject to stricter testing when an authorised declarant seeks to use actual emissions instead of a default approach.
In that context, renewable origin alone is not sufficient for CBAM actual-emissions claims. The existing framework requires, among other elements, an appropriate physical PPA, qualifying transmission arrangements, accepted cross-border nominations, and matching between nominated electricity and generation within periods of no more than one hour. Those claims must be supported through CBAM verification.
A Serbian wind farm could sell electricity to an EU customer and transfer an EU-recognised GO while still failing the CBAM actual-emissions test. Conversely, an EU buyer could claim the renewable attribute associated with Serbian production but still need to apply Serbia’s national CBAM electricity default factor to physical imports into the EU.
Two evidence chains for certificates and CBAM
The emerging structure increases the importance of data architecture because it involves two overlapping but legally separate systems for valuing low-carbon electricity. Renewable generators are expected to maintain a controlled GO ledger covering certificate issuance, transfer, cancellation, and customer allocation. Separately, generators pursuing CBAM actual emissions need an electricity evidence chain that incorporates settlement meters, SCADA data, hourly production, PPAs, nomination records, transmission evidence, and EU-declarant allocation.
A valid GO does not demonstrate that an equivalent electricity volume was nominated across an EU border for a specific authorised CBAM declarant. Similarly, successful physical delivery does not by itself show that the renewable attribute was not separately sold or claimed elsewhere. For pre-verification purposes, producers are expected to reconcile these systems while preserving their distinction.
A robust structure would link installation data through meter and SCADA information to an hourly generation ledger, PPA allocation, nominations, EU declarant allocation, and then CBAM evidence. In parallel, it would cover installation through eligible renewable generation to GO issuance, transfer, cancellation, and final beneficiary allocation. Controls against double counting are described as important in both chains.
Implications for power purchase agreements and industrial exporters
The development is also expected to affect how PPAs are drafted because many existing contracts specify how guarantees of origin are allocated between generator and buyer. Future contracts may need additional provisions on ownership, transfer, cancellation, and restrictions on resale if Serbian certificates gain wider recognition in the EU. Where contracts are intended to support CBAM actual emissions as well as GO value, they may require access to hourly generation data and rights to retrieve nomination and transmission records.
CBAM-compatible arrangements may also require cooperation with accredited verifiers and procedures if actual-emissions verification fails. They may include allocation rules for qualifying electricity to specific authorised declarants based on nomination and transmission evidence. As a result, a single renewable PPA may support two distinct commercial products: a renewable certificate component and potentially a CBAM-verifiable electricity component.
The separation can become important when one party buys physical electricity while another acquires GOs or when output is pooled across multiple plants. Industrial buyers exporting CBAM-covered goods also have reason to follow developments because broader recognition of Serbian GOs could support corporate renewable procurement and sustainability reporting such as Scope 2 disclosures.
However, purchasing recognised renewable certificates would not automatically allow exporters to use lower actual electricity emissions in their CBAM embedded-emissions calculations. Where plant-specific renewable electricity is sought for CBAM purposes, physical-delivery arrangements plus contractual terms and verification requirements remain separate from GO recognition. This makes PPA design particularly relevant for steel, aluminium and other electricity-intensive producers.
Serbian tax credit for decarbonisation investment
A separate Serbian legislative change adopted at the end of August provides certain electricity producers with a tax credit linked to qualifying decarbonisation investment. Eligible producers that derive at least 80% of revenue from electricity generation may claim a credit corresponding to 20% of qualifying investment subject to a ceiling tied to their greenhouse-gas tax liability.
The measure does not materially change the position of wind and solar plants because they have negligible direct operating emissions. It could encourage decarbonisation investment among Serbia’s emitting generators by linking support to qualifying investment levels. Over time, lower power-sector carbon intensity could influence broader economics related to CBAM electricity exports.
The change does not immediately alter Serbia’s existing CBAM electricity default factor or the methodology governing actual emissions under CBAM verification rules.
Market distinction between certificate value and CBAM-ready traceability
The Commission’s GO proposal is described as potentially increasing the value and liquidity of Serbian renewable certificates if mutual recognition is implemented. At the same time, CBAM verification rules can create a separate premium for electricity traced from a named renewable installation through hourly metering, contractual allocation and cross-border nominations to an authorised EU declarant.
These premiums will not necessarily accrue to the same transaction because certificate eligibility depends on GO systems while CBAM actual-emissions claims depend on physical traceability requirements. A project with strong certificate eligibility but weak physical-traceability systems could benefit from GO market value while remaining exposed to Serbia’s national CBAM default when exporting electricity.
A project combining both stronger certificate eligibility and stronger physical-traceability could be positioned differently in terms of project valuation effects on PPA negotiations and financing. Investors may increasingly distinguish between ordinary electricity, electricity with recognised renewable certificates, and electricity carrying a complete verifier-ready CBAM evidence package. For Serbian wind and solar producers specifically, the Commission’s latest proposal is presented as not simplifying CBAM while adding complexity to how low-carbon value streams can be monetised.
Elevated by CBAM.Clarion.Engineer