The European Union’s Carbon Border Adjustment Mechanism (CBAM) is affecting electricity trading economics across Southeast Europe. The mechanism is creating a wider separation between wholesale power values and the carbon-adjusted cost of electricity imported from the Western Balkans. The additional cost exposure applies to electricity exports into EU markets from the start of 2026.
Compared with steel and aluminium, the electricity impact is described as potentially more immediate. Transitional arrangements linked to the gradual withdrawal of free EU carbon allowances benefit those industries, while electricity imports do not receive equivalent free-allocation relief. As a result, carbon-intensive power exports face additional costs from 2026.
CBAM certificate prices and indicative carbon exposure for electricity
The latest published CBAM certificate price reached €82.32 per tonne of CO₂ for the third quarter. This compares with €75.28 in the preceding quarter. The higher certificate price increases the indicative carbon cost for exports from countries with high default emissions factors.
Using existing national default factors, the third-quarter price implies gross CBAM exposure of approximately €85.70/MWh for Serbian electricity, €80.59/MWh for Montenegro, and €94.50/MWh for Bosnia and Herzegovina. North Macedonia faces an indicative €73.01/MWh, while Albania’s zero default factor produces no carbon charge under the default calculation.
The amounts are described as illustrative based on the third-quarter certificate price rather than final charges for October deliveries. The fourth-quarter certificate price will be established in January 2027. Actual liabilities may also reflect eligible deductions for carbon prices paid in the country of origin.
Electricity spreads versus carbon-adjusted costs
The figures are presented as showing how CBAM can outweigh conventional wholesale trading margins. On October 9, Serbia’s SEEPEX day-ahead electricity price rose to €239.96/MWh, up almost 34% from the prior session. Hungary’s HUPX reached €269.43/MWh.
The difference between those daily averages was €29.47/MWh, which is described as substantially below Serbia’s indicative default-based carbon exposure. A trader importing Serbian electricity into Hungary would therefore face difficulty covering the carbon cost using that daily average spread alone. The calculation is noted as excluding cross-border transmission capacity constraints, losses, balancing and other trading expenses.
On 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 averages are also noted as not being executable margins because hourly variations can create individual opportunities.
Regional market segmentation and compliance evidence requirements
The Energy Community Secretariat has identified changes in regional electricity flows tied to shifts in commercial activity. Gross commercial exchange between Western Balkan and neighbouring EU markets declined by approximately 19% year on year in the first half of 2026, alongside factors including hydrological conditions, generation availability and changing import requirements.
The regional market is increasingly described as splitting into two commercial segments: domestic and regional trading where EU CBAM import charges do not directly apply, and exports into EU markets where carbon-adjusted costs influence whether scheduled transactions remain profitable. For Serbian utility EPS, Montenegrin EPCG and power producers across Bosnia and Herzegovina, emphasis is placed on generation technology, electricity origin and demonstrating actual emissions.
This distinction is highlighted as particularly relevant for renewable energy projects exported into EU markets. A Serbian wind farm producing low-carbon electricity does not automatically qualify for favourable CBAM treatment when exported into Hungary unless an EU declarant meets conditions for using actual embedded emissions. In that case, the exported electricity can remain subject to Serbia’s national default value.
The rules cited 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, while guarantees of origin alone cannot replace physical and contractual evidence.
Implications for renewables financing and industrial CBAM liabilities
For project developers and lenders, a wind or solar project may generate competitively but still face uncertainty over additional value from selling power directly into the EU. This affects projected revenues, long-term power purchase agreements, financing assumptions and investment cases for new renewable capacity.
The impact also extends to industrial manufacturers through differences in how emissions are treated under CBAM. Under the current regime, 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.
Cement methodology changes proposed; 2026 certificate timeline
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.
The reforms are described as not yet fully adopted despite potential effects on hydropower, wind and solar export economics from Serbia, Montenegro and Bosnia and Herzegovina. For banks financing renewable energy projects, electricity-intensive manufacturers or cross-border trading businesses, CBAM is described as adding revenue opportunities alongside margin and regulatory risk considerations tied to compliance requirements.
The first CBAM certificates covering 2026 electricity imports will be purchased from February 2027. Annual declarations and certificate surrender are due by September 30, 2027.
Physical interconnection versus carbon classification of traded power
For Southeast Europe, the challenge is described as arising from physical interconnection combined with differentiated commercial economics driven by carbon treatment under CBAM rules. A megawatt-hour produced in Serbia or Montenegro can still reach a European buyer through interconnected transmission networks.
Whether that electricity can be sold profitably increasingly depends on its carbon classification and transaction evidence rather than only on wholesale price differences across borders.