Electricity trading between the Western Balkans and neighbouring European Union markets stayed well below the level recorded in the first half of 2025 during 2026. Energy Community analysis points to a gross commercial exchange across the Western Balkan–EU border that was about 19% lower year on year. The data cover the period after the introduction of CBAM.
Cross-border volumes fell by roughly 23% in the first quarter of 2026 compared with the same quarter of 2025. The decline coincided with strong hydropower production, which pushed Western Balkan prices below EU benchmarks. In the second quarter, trade remained around 15% lower even after the hydro surplus ended and the region returned to its usual net-import position.
The figures do not separate CBAM effects from hydrology, fuel costs, plant availability and demand conditions. Continued weakness in cross-border activity is therefore not attributed solely to an unusually wet first quarter. A neutral comparison against last year’s pattern is reflected in the quarter-by-quarter changes.
Domestic day-ahead trading rises while border flows weaken
Liquidity on domestic power exchanges moved in the opposite direction to cross-border trade. Combined day-ahead trading on observed Western Balkan exchanges increased by about 19% to 2.70 TWh in the second quarter. The increase included a recovery at Serbia’s SEEPEX.
This shift is associated with a more segmented market structure, with more electricity being traded within the Western Balkans and less crossing into EU markets. Physical flows remain linked through the interconnected network, while commercial scheduling can change across borders. The divergence is reflected in the gap between domestic trading volumes and gross border exchange levels.
CBAM default factors shape indicative import costs
National CBAM default factors are described as a major input into the calculation of indicative import costs. At the second-quarter certificate price, the indicative cost was €86.42/MWh for Bosnia and Herzegovina, €78.37/MWh for Serbia and €73.70/MWh for Montenegro. Albania’s default cost was set at zero.
The differences can affect where traders schedule electricity commercially, even when physical delivery follows network constraints. Electricity may be routed through lower-carbon jurisdictions or kept within the Western Balkans when an EU price premium cannot offset the CBAM charge. The analysis links these scheduling choices to changes in gross cross-border activity.
Market efficiency and price signals diverge from 2025
The resulting market outcome is described as less efficient, with cross-border capacity potentially remaining underused despite large price differences. Supply and demand are also reported to no longer converge in the same way as before 2026. This is tied to weaker gross cross-border trade alongside higher domestic liquidity.
Price correlations improved in the second quarter once the Western Balkans became a net importer again and followed EU benchmark pricing. Even so, gross cross-border trade did not return to its 2025 configuration. If this pattern continues, CBAM-related calculations are expected to influence capacity values, trading hubs and commercial directions for power movements across Southeast Europe.