From 1 January 2026, Serbia’s lignite-based electricity system has faced an external carbon price as the EU Carbon Border Adjustment Mechanism (CBAM) began covering imports of electricity, iron and steel, aluminium, cement, fertilisers and hydrogen. Importers are required to account for embedded emissions in goods arriving from outside the bloc. The financial settlement is described as delayed, while the commercial signal is immediate.
European buyers are seeking verified emissions data, and procurement teams can compare lower-carbon suppliers. For power exporters, CBAM creates a need to address differences between Serbia’s generation mix and the EU market. Carbon is therefore moving from a policy scenario into contract negotiations.
CBAM default emissions factor and indicative exposure
The Energy Community calculated a Serbian default electricity-emissions factor of 1.041 tonnes of carbon dioxide per megawatt hour for the second quarter of 2026. Using the quarter’s reference certificate price of €75.28 a tonne, the indicative exposure is about €78 per MWh before adjustments. The calculation is described as not a bill to every generator.
The figure is presented as an illustration of how quickly margins on cross-border sales can change when carbon costs are reflected in trade terms. It also links the speed of market signals to the availability of emissions data used in CBAM-related processes.
Elektroprivreda Srbije exports and coal-linked exposure
Elektroprivreda Srbije (EPS) remains the dominant generator and a central corporate actor in the transition. In the second quarter of 2026, coal and lignite supplied 6.54 TWh, down 12% year on year but still ahead of neighbouring western Balkan systems. Serbia-to-Hungary electricity flows more than doubled year on year during the quarter.
The reported increase in cross-border flows is not attributed solely to CBAM because weather, prices and network conditions are cited as influencing factors. EPS’s 2025 financial statements are used to show how exposure could be translated into export-related cost considerations.
EPS’s EU trading subsidiary exported 146,449 MWh in 2025. Using illustrative carbon assumptions referenced in those statements, a comparable volume could imply roughly €11 million of CBAM cost. The calculation is described as hypothetical rather than an incurred 2025 liability.
The export business described as previously monetising cheap coal is therefore framed as needing to monetise low emissions or verified data for European counterparties. CBAM is also described as changing which plant, power contract and emissions record can support a European margin rather than stopping production at borders.
Sectors covered by CBAM reporting requirements
The coverage extends beyond electricity into sectors tied to covered goods. HBIS Serbia operates blast furnaces and flat-steel production at Smederevo, within a sector covered by CBAM. Fertiliser, cement and aluminium producers are identified as facing related reporting and cost pressure.
The first phase does not directly cover automotive and appliance exporters, but their European customers are said to increasingly request product-level carbon information and cleaner power during supplier qualification. This indicates that emissions data expectations can affect supply chains even where products are not directly included in initial CBAM coverage.
Renewable auctions and contracted solar-plus-storage projects
Serbia has begun responding through renewable procurement rounds. The second round of renewable auctions in March 2025 awarded support for 300 MW of wind and 124.8 MW of solar. Supported capacity from the first two rounds totals about 770 MW.
A contract involving Hyundai Engineering and UGT Renewables envisages at least 1 GW of alternating-current solar capacity. It also includes battery storage of up to 200 MW / 400 MWh, with transfer to EPS on completion.
The renewable pipeline is described as creating a market for turbine and panel suppliers, battery integrators, grid engineers and corporate-power traders. Industrial users are noted as able to use renewable power-purchase agreements and guarantees of origin to protect export margins, while banks can finance contracted cash flows and software companies can measure production and emissions.
Grid integration, market access and EPS restructuring constraints
The bottleneck for renewable deployment is described as extending beyond generation capacity into grid connections, balancing, permitting and state-company governance. Serbia transposed elements of an EU electricity-integration package, and trading on the SEEPEX day-ahead market increased in 2024. Gas-market access and storage unbundling remain weaker.
EPS restructuring, distribution losses, payment discipline and tariff adequacy are cited as factors affecting investment conditions. These elements determine how quickly new capacity becomes usable within the system.
NIS ownership sanctions waiver affecting transition planning
The transition is also influenced by ownership issues linked to sanctions affecting energy assets. The oil company NIS, whose Russian ownership triggered US sanctions, is described as having a US waiver through 28 August 2026. A proposed purchase of the Russian stake by Hungary’s MOL was awaiting approval at the time referenced.
Serbia owns 29.9%, according to the figures provided. The transaction was not complete at the reporting cut-off mentioned, and the sanctions are described as American rather than an EU-accession measure.
Evolving roles for incumbents and new entrants under decarbonisation pressure
The source describes incumbents as holding assets that newcomers cannot replicate quickly: mines, power stations, the grid, a refinery and established industrial sites. It also notes legacy emissions, labour obligations and political pricing carried by existing operators. Entrants are described as bringing capital and cleaner technology but relying on permits, connection queues and credible offtakers.
The state role is presented as needing to make incumbents and entrants complementary rather than allowing legacy companies to delay market developments that would ultimately protect them. The interaction between ownership structures, policy requirements and investment timing is therefore highlighted through these operational constraints.
Differentiating industrial competitiveness through emissions measurement
The shift described relates to how carbon costs become visible for exporters under EU rules at the border. Coal previously lowered visible production costs in Serbia’s system, while CBAM makes hidden costs part of trade calculations for covered goods. Companies that measure emissions first, contract around those costs and invest to reduce them are identified as preserving Serbia’s manufacturing proposition.
The deadline dynamic is described as being controlled by buyers rather than candidate-country policy timing when CBAM-related requirements apply to cross-border sales.