The EU’s Carbon Border Adjustment Mechanism (CBAM) started on January 1, creating a carbon liability for electricity imported from non-EU markets. The mechanism applies to imported electricity and introduces compliance costs tied to carbon factors.
For countries relying on national default factors, the commercial impact is described as severe. At a second-quarter certificate price of €75.28/tCO₂, indicative costs were reported at €86.42/MWh for Bosnia and Herzegovina, €78.37/MWh for Serbia, and €73.70/MWh for Montenegro.
Albania, where the default factor is zero, faced no corresponding charge. The result was described as a two-tier market where electricity with similar physical characteristics could carry different CBAM costs depending on declared origin.
Trading volumes shift after CBAM takes effect
First-half trading data indicate that market participants adjusted their behaviour. Gross commercial exchange between Western Balkan markets and neighbouring EU markets fell by approximately 19% year on year, while trading on regional power exchanges increased.
In the first quarter, strong hydro output widened price gaps between the Western Balkans and the EU. The cheaper power was not fully exported, and CBAM default costs were reported to often exceed available arbitrage margins.
In the second quarter, EU prices declined and the Western Balkans returned to net imports. Price correlations recovered, but trade did not fully revert to the earlier pattern.
New cross-border routes and schedule-flow divergence
Instead of a full return to prior trading patterns, new routes were reported to strengthen. Scheduled exports from Serbia to Hungary rose by 111%, while Romania-to-Hungary trade increased by 156%, partly linked to Ukrainian import demand.
Greece was described as maintaining its role as a southern supply centre. More electricity was reported to be sent towards Bulgaria, North Macedonia and Albania.
The source also highlights growing divergence between commercial schedules and physical flows. The difference was particularly visible on the south-to-north axis through Albania, Montenegro, Bosnia, Serbia and the EU border.
Commission guidance on evidence for renewable claims
The Commission’s August electricity guidance is presented as an attempt to address the gap between declared commercial origin and physical dispatch. It requires an evidence chain for renewable actual-emissions claims.
The guidance requires a physical PPA, hourly production data, firmly nominated interconnection capacity, documentation across transit countries and an accredited verification conclusion. These elements are described as necessary for renewable actual-emissions claims under the evidence approach.
A guarantee of origin (GoO) is described as not being able to replace those elements. A separate Commission proposal for mutual recognition between the EU and the Energy Community is referenced as potentially enabling renewable certificates issued in Serbia, Montenegro and other qualifying markets to be commercially usable inside the EU.
Proposed CBAM amendments affecting default factors
The certificate reform is described as potentially affecting corporate-PPA economics and providing additional revenue for renewable projects. Separately, proposed CBAM amendments are described as targeting national default factors.
The amendments are reported to reduce national default factors by reflecting the entire electricity mix. They are also described as removing a requirement intended to demonstrate an absence of network congestion.
Taken together, the reforms are described as creating a workable route into the EU market for Southeast European renewable producers. The commercial structure is described as needing three distinct components: electricity itself, its renewable certificate and verified evidence supporting its CBAM emissions claim.
Different compliance roles for utilities and independent traders
The source describes different starting positions for utilities and independent traders in assembling compliant packages. Large state utilities including EPS, EPCG, ERS and EPBiH are described as controlling broad generation portfolios and established trading routes.
Those utilities are described as needing to prevent renewable electricity from being mixed or double allocated. They also must avoid inconsistent attribution across customers when arranging deliveries tied to CBAM claims.
Independent suppliers are described as potentially more agile in building installation-specific packages for EU declarants or Serbian industrial exporters. Their challenge is described as securing long-term access to named plants, interconnector capacity and operational data required by verifiers.
Two pathways for renewable producers’ market access
The source describes a strategic choice for renewable producers between exporting electricity directly into the EU or supplying Serbian and Montenegrin factories seeking low-carbon electricity for goods exported to Europe. Direct export is described as carrying full scheduling requirements and CBAM evidence burdens.
The alternative pathway is described as serving a different emissions claim structure. Electricity used in a Serbian factory is described as becoming part of manufacturer CBAM or corporate emissions evidence rather than being treated as electricity imported into the EU “as a good.”
The emerging market is described as rewarding parties that keep these claims separate and controlled. It also notes that Southeast Europe retains renewable resources, interconnections and price differentials needed to support trade with the EU.
The change highlighted is the burden of proof starting in 2026. From then on, the most valuable megawatt-hour is described as being the one whose commercial and carbon identity can be independently demonstrated from generating installation through to the final declarant.