A Serbian energy-sector report estimates that the EU Carbon Border Adjustment Mechanism (CBAM) has reduced the amount of electricity offered by the state utility EPS to the regional market by around 600 MW. The figure is presented as an industry assessment rather than official EPS operating or trading data. The report links the change to emerging commercial effects of carbon costs on Serbia’s lignite-heavy power system.
The estimate appears in the Elektroenergetika Republike Srbije 2025 report prepared by the Association of Energy Engineers of Serbia. The report states that EPS generated around 30.5 TWh of electricity in 2025, with roughly 70% coming from lignite-fired generation. It says this generation mix leaves Serbia exposed to EU carbon costs when electricity is exported into the bloc.
CBAM timeline and embedded emissions for EU buyers
The report notes that CBAM entered its definitive phase on Jan. 1, 2026. It says that, for EU buyers and authorised CBAM declarants, the embedded emissions of imported electricity are increasingly important. For Serbian lignite generation, it adds that the mechanism can materially increase the effective cost of selling electricity into the EU.
The 600 MW estimate is described as significant because it indicates carbon-cost effects beyond compliance calculations and into commercial behaviour. The report says electricity that may have been economically attractive to offer for export could fail to clear once associated carbon liability is included. It also states that this does not necessarily mean 600 MW of physical generation has been shut down.
What changes in export economics under CBAM
The report frames the issue as a shift in which parts of EPS’s available output remain economically competitive in export-facing trading due to their emissions profile. It says CBAM does not physically prevent Serbian electricity from reaching EU markets, but it changes relative economics for different supply. It describes low-carbon generation as able to retain more market value compared with lignite-heavy supply facing additional carbon-related costs at the EU border.
The report describes this as creating a two-tier pattern in Serbia’s power market. It says hydro, wind, solar and other verifiably low-carbon electricity should become more valuable for export-facing transactions where emissions evidence can be traced to a specific generating installation. It also says lignite generation remains important for domestic adequacy but may become increasingly disadvantaged in EU-linked trading.
Domestic carbon charge versus EU carbon exposure
The report states that Serbia’s existing domestic carbon charge is around €4/tCO₂, which it says remains far below EU carbon prices. It argues that this gap can cause domestic generation economics to diverge from carbon-adjusted economics faced by an EU importer. For EPS, it says the commercial question is no longer only the wholesale spread between SEEPEX and neighbouring EU markets.
Instead, it says the relevant export margin increasingly becomes the power-price spread after carbon exposure is included. The report adds that a nominally attractive Hungarian or Croatian electricity price may no longer support exports if CBAM costs exceed the trading margin. It also notes that transmission congestion and local supply-demand conditions remain important, while carbon-adjusted export economics becomes another variable affecting offers.
Hydro, renewables and evidence requirements
The report says CBAM increases the strategic value of EPS’s hydro portfolio. It states that hydropower supported by an adequate evidence chain should carry materially lower embedded emissions than lignite generation. It adds that this can make reservoir water more valuable not only during high-price hours but also in export transactions where carbon intensity determines effective netback.
It also applies similar logic to Serbia’s expanding wind and solar fleet. For renewable developers, the report says the market is not only about selling megawatt-hours but about providing verifiable low-carbon electricity with a complete evidence chain. It says this may increasingly determine whether output can command a premium from industrial buyers or export counterparties exposed to CBAM.
The report distinguishes between ordinary guarantees of origin or contractual green claims and evidence capable of supporting an actual-emissions claim under EU rules, attributing this point to CBAM.Clarion.Engineer. It links these evidentiary requirements to how different generation types compete in export-facing transactions under CBAM exposure.
Potential operational and investment responses for EPS
For EPS, the report outlines potential responses involving several parallel measures. It says EPS could accelerate lower-carbon generation, improve traceability of electricity from individual installations, strengthen metering and scheduling evidence, and reconsider how different generation sources are allocated between domestic supply and export markets.
The report also says EPS could optimise lignite generation around domestic adequacy rather than assuming surplus thermal output will always find an economic export market. It describes the broader investment challenge as substantial, estimating Serbia will require around €15–20 billion of energy-sector investment by 2030. It adds that much of this would need to address structural weaknesses including high lignite dependence, ageing generation, insufficient flexibility, transmission constraints and limited volumes of verifiable low-carbon electricity.
The report reiterates that the estimated 600 MW reduction in exchange offers is not an official measure of CBAM’s market impact. It says that if the assessment is broadly correct, CBAM is beginning to affect Serbia not only through future costs of exporting carbon-intensive electricity but through which megawatts are economically worth offering to the regional market.