The European Union’s Carbon Border Adjustment Mechanism (CBAM) is beginning to affect electricity trade in the Western Balkans before the region completes its shift away from coal. The change comes as renewable investment expands, while exported power can still reflect the carbon characteristics of national grids.
North Macedonia is cited as the clearest example of the transition. Developers are advancing projects that could add 2.8 GW of low-carbon capacity, close to the country’s existing installed power capacity of roughly 3 GW. The pipeline includes Alcazar Energy’s 396 MW Štip wind project, a proposed 400 MW solar development by Akuo Energy, and a 414 MW wind project linked to WDP.
The stated objective is to move North Macedonia from a long-standing net importer to a net electricity exporter. The economic rationale is tied to export markets, with about 77% of merchandise exports going to the EU in 2024. Low-carbon electricity is described as a potential input for industrial expansion, foreign investment attraction, and improved competitiveness for existing exporters.
Cross-border volumes and export earnings under CBAM pressure
CBAM is described as complicating the export-oriented model. Western Balkan cross-border electricity volumes reportedly fell by 19% in the first six months of 2026. North Macedonia earned €36.8 million from electricity exports in the first five months of 2026.
If annualised mechanically, the first-five-month figure would correspond to approximately €88.3 million. That level would be around 44.6% below the €159.3 million recorded in 2025.
Grid emission factors and data requirements for low-carbon claims
The central issue is how electricity is treated through national grid emission factors. Even where a renewable plant produces low-carbon power physically, exported electricity may still be associated with the average emissions intensity of a coal-heavy system. Renewable generation can reduce national averages, but lignite generation can continue to influence commercial outcomes.
This is described as creating a bankability challenge for projects targeting EU-bound sales. A wind or solar project developed partly for exports cannot rely only on a conventional power-purchase agreement. It needs credible evidence linking generation, metering, scheduling, grid delivery, and the importing counterparty.
The commercial value of electricity is presented as increasingly dependent on emissions and origin data quality. The architecture required is described as more demanding than annual guarantees of origin. Exporters and industrial buyers need installation-level metering, time-correlated production and consumption data, transparent loss treatment, validated contractual routes, and records showing that the same renewable attribute has not been allocated twice.
The absence of those controls is described as risking rejection at importer review or during third-party verification. In this context, low-carbon claims depend on whether documentation can be supported through verification processes tied to emissions characteristics and origin.
Regional coal mix shapes how exported power is valued
The implications extend beyond North Macedonia across the Western Balkans. Serbia, Bosnia and Herzegovina, and Kosovo are described as retaining substantial coal generation. Montenegro has a lower-carbon mix but still faces periods when thermal output and imports affect grid intensity.
Albania is described as benefiting from hydropower while remaining exposed to hydrological variation and imported electricity. Across these systems, exported volumes can be influenced by how grid intensity changes over time and how emissions attributes are documented for cross-border transactions.
A split between conventional wholesale power and documented low-carbon electricity
The article describes an expected separation in electricity trading into two products. Conventional wholesale electricity would continue to be priced through market coupling, congestion, and hourly supply conditions.
Documented low-carbon electricity, by contrast, would carry additional value based on verified emissions characteristics and its relevance for CBAM-exposed industrial buyers. The approach places emphasis on evidence that can be reviewed by importers and verified by third parties.
The most competitive renewable developers are described as those that build the evidence chain alongside physical assets. Metering arrangements, data governance practices, and contractual allocation are characterised as becoming part of project infrastructure rather than being handled after commissioning.
The definition of a megawatt-hour in Western Balkan trade is described as extending beyond where and when generation occurs. It is also defined by what can be proven about it through emissions-related documentation tied to trading arrangements.