The European Parliament backed changes to the EU’s Carbon Border Adjustment Mechanism (CBAM) that affect electricity flows between the bloc and the Western Balkans. The move comes as evidence is cited that the levy is reducing commercial exchanges and fragmenting the regional power market. Lawmakers adopted their negotiating position on 15 September 2026 by 464 votes to 50, with 159 abstentions. The vote clears the way for negotiations with EU member states on the final legislation.
While much of the package covers steel, aluminium and manufactured goods, several electricity provisions are described as having direct consequences for utilities, traders and renewable-energy developers. The countries listed include Serbia, Montenegro, Bosnia and Herzegovina, North Macedonia, Albania and Kosovo. The Parliament’s position therefore sets out specific rules that could influence cross-border contracting and compliance planning in the region.
Proposed CBAM exemption for stability-related cross-border flows
The Parliament added a proposed exemption for electricity entering the EU when transmission system operators use cross-border flows to maintain network stability. The provision is intended to prevent emergency balancing, redispatch and other security-related exchanges from attracting CBAM liabilities when their purpose is operational rather than commercial. It remains subject to negotiations with the Council and does not cover ordinary electricity trading.
The Parliament’s text also frames the exemption as recognition that applying a border carbon charge mechanically to interconnected power systems can interfere with grid operations. Negotiations with the Council are still required before the approach becomes part of final legislation. The exemption’s scope is therefore not yet fixed for routine cross-border market activity.
Revisions to embedded emissions defaults for electricity imports
A second set of changes focuses on how embedded emissions are calculated under CBAM for electricity. Under the existing methodology, electricity imports can be assigned a national default value based heavily on the exporting country’s fossil generation. The stated concern is that this can disconnect the carbon charge from the actual electricity delivered, particularly when exports come from hydropower, wind or solar plants.
The proposed revision would calculate default values using each country’s entire electricity generation mix, including non-fossil production. It also allows a non-EU country to seek a lower value where reliable data show that its average system emissions or emissions from its price-setting generators are below the EU default. These changes are presented as potentially significant for how border charges map onto different generation portfolios.
Indicative border costs under Q2 2026 CBAM certificate prices
The source material provides indicative border cost figures using existing default values and a Q2 2026 CBAM certificate price of €75.28 per tonne of CO₂. It estimates approximately €86.42/MWh for Bosnia and Herzegovina, €78.37/MWh for Serbia, €74.08/MWh for Kosovo, €73.70/MWh for Montenegro and €66.77/MWh for North Macedonia. Albania is described as having a zero default factor due to its predominantly hydropower-based system.
The figures are linked to commercial viability concerns in cross-border trading. During the second quarter, Italian electricity averaged around €27/MWh above Montenegro, while Hungarian pricing was approximately €13/MWh above Serbia. The material states that a default CBAM charge of more than €70/MWh can remove value from an export that would otherwise be profitable.
Regional trade volumes and day-ahead activity during early CBAM period
The first six months of the definitive CBAM period are described as already affecting regional behaviour. Gross scheduled electricity exchanges between the Western Balkans and neighbouring EU markets fell around 15% year on year in Q2 2026 and about 19% across the first half of the year. At the same time, trading on four observed Western Balkan day-ahead exchanges increased by 19% to 2.70 TWh in Q2.
The contrasting movements are described as indicating that trading activity has not disappeared but is increasingly staying within regional markets rather than crossing into the EU. The Western Balkans returned to a seasonal net-import position of around 1,048 GWh in Q2 after exceptional net exports of about 1,247 GWh in Q1. The shift is attributed in part to lower hydro generation, declining EU benchmark prices and changing fuel economics.
Evolving routing patterns toward Serbia and compliance documentation requirements
The material says the market has not returned to its 2025 structure even as governments aim to deepen integration and connect Western Balkan power exchanges with the EU’s single day-ahead market. It reports that electricity is increasingly being routed north through Serbia while traditional corridors into Croatia, Bulgaria, Greece and Italy remain commercially weaker. This is described as resulting in a more segmented market.
Electricity exports and trading can continue largely as business as usual, but EU-bound transactions must increasingly be supported by a CBAM evidence package identifying the electricity source and its embedded emissions, according to analysts at Virtu.Energy . The evidence must be sufficiently complete and traceable to permit examination by an EU-accredited verification body.
The authorised CBAM declarant or EU importer retains formal responsibility for compliance, but much of the required information must originate with exporters and electricity producers. This includes generation details, metering data, contractual terms and delivery information passed down through commercial arrangements. Virtu.Energy analysts say early integration of a pre-verification process is recommended so producers, traders and importers can establish an evidence chain before annual CBAM declarations and certificate-surrender deadlines . Records not collected at generation or delivery may be difficult or impossible to reconstruct later.
Status of negotiations and potential retroactive application from January 2026
The legislative revision could ease market pressure by reducing default values and making actual plant-level emissions easier to demonstrate. Parliament and the Council still have to agree on final text elements including treatment of emergency electricity flows and safeguards during severe market disruption . A final agreement is targeted before end-2026.
The material adds that some electricity amendments could apply retroactively from 1 January 2026. Until negotiations are completed, traders are said to need to continue pricing electricity against existing default liabilities while building evidence needed to support actual emissions . Carbon exposure is described as remaining capable of overwhelming underlying value tied to cross-border capacity until those rules are settled.
