The second quarter of 2026 saw a partial easing of the disruption linked to the start of the definitive phase of the EU Carbon Border Adjustment Mechanism (CBAM). The Western Balkans electricity market did not revert to its earlier trading structure. Price spreads narrowed and correlations with EU benchmarks recovered, while the region returned to its usual seasonal position as a net importer. Commercial electricity trade with the EU remained well below 2025 levels, and flows increasingly used fewer northern and southeastern European corridors.
The Energy Community Secretariat assessed developments for Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia. It also reviewed neighbouring markets in Bulgaria, Croatia, Greece, Hungary, Italy and Romania. The assessment covers electricity generation, day-ahead prices, cross-border price spreads, transmission capacity auction values, power exchange liquidity, and scheduled and physical electricity flows. The Secretariat noted that evidence is preliminary because CBAM began during exceptionally favourable hydrological conditions.
Net import shift and reduced scheduled cross-border volumes
The main change in Q2 was a move away from an exceptional net export position of around 1,247 GWh in Q1 to net imports of approximately 1,048 GWh. This level was close to the normal seasonal balance recorded a year earlier. Imports from the EU fell 14% year on year to 4,271 GWh, while exports declined 16% to 3,223 GWh. Gross scheduled electricity trade across Western Balkan–EU borders decreased from 8,828 GWh to 7,494 GWh, about a 15% drop.
For the first half of 2026, the contraction reached 19%. The Secretariat reported that the decline occurred despite almost complete allocation of transmission capacity offered on main export corridors. This meant the market was not only constrained by limited transmission rights. Traders continued to buy capacity but scheduled less electricity across it.
The Secretariat said this distinction points to uncertainty related to carbon costs and the eligibility of actual emissions values. It also cited power purchase agreement (PPA) structures and possible future regulatory changes as factors affecting scheduling decisions. The assessment therefore treated the pattern as more than a purely physical transmission constraint.
Domestic trading volumes rise while EU transfers weaken
Alongside weaker commercial transfers to the EU, domestic power exchange liquidity improved in Q2. Day-ahead traded volumes across four Western Balkan exchanges increased 19% to 2.70 TWh. ALPEX recorded a 52% increase, MEPX rose 49%, MEMO grew 31%, and SEEPEX increased 7%. The Secretariat described activity as shifting inward rather than disappearing.
Under this shift, more electricity was traded on domestic exchanges while less was transferred commercially across the EU border. The assessment linked this pattern to changes in how market participants schedule cross-border volumes. It also reflected differences in how day-ahead pricing signals were being used alongside carbon-related exposure.
Changing corridor patterns across Serbia and Greece
The geographical pattern also changed during Q2. Scheduled exports from Serbia to Hungary increased 111%. Within the Western Balkans, electricity flows increasingly moved northwards through Serbia. Greece became a stronger exporter to Bulgaria, North Macedonia and Albania as solar and wind generation expanded.
Montenegro’s exports to Italy recovered during the quarter. Several established transit corridors through North Macedonia, Bulgaria and Croatia remained weak in scheduled terms. The Secretariat stated that CBAM did not account for all developments but was increasingly part of route economics affecting commercial viability.
Carbon cost factors and verification requirements
The assessment highlighted how national default emission factors can create a cost disadvantage for carbon-intensive power systems. It also noted that Albania’s zero factor supports competitiveness at narrower price spreads. Traders were described as assessing not only day-ahead price differentials but also carbon certificate exposure tied to delivery arrangements.
The Secretariat further referenced hourly delivery structures and physical PPA traceability as elements relevant to compliance exposure. It also pointed to expectations regarding regulatory changes affecting how contracts are structured for cross-border trade. In parallel with these factors, hydrological conditions at CBAM start were noted as complicating identification of carbon-specific effects versus seasonal drivers.
First-half 2026 segmentation in regional market integration
The first half of 2026 marked what the Secretariat described as the beginning of a more segmented regional electricity market. Domestic exchanges were becoming more liquid while cross-border integration with the EU weakened in scheduled trade terms. Serbia’s role increased as a northern trading and transit hub during this period.
Greece strengthened its position as a regional supply centre according to the assessment’s corridor observations. Renewable power producers were also described as finding that access to EU prices depends on verification and contractual structures as well as physical generation volumes.