Renewable electricity producers in Serbia, Montenegro and other Western Balkan markets face a commercial barrier under the EU’s Carbon Border Adjustment Mechanism (CBAM): low-carbon generation alone does not qualify exported power for actual-emissions treatment. The Energy Community Secretariat identified the challenge in its Q2 2026 assessment, dated July 2026, warning that producers unable to demonstrate compliance could face higher costs and uncertainty over future electricity revenues.
Under the EU framework, electricity imports can use actual emissions only when several conditions are met together. Regulations (EU) 2023/956 and Implementing Regulation (EU) 2025/2547 require an eligible power purchase agreement (PPA) and that the generating installation meets the relevant network-connection or absence-of-congestion requirement.
The installation must not exceed 550 grams of fossil-origin CO₂ per kWh. Generation and relevant interconnector capacity nominations must correspond within the same period, which cannot exceed one hour; compliance must also be certified by an accredited verifier and supported by interim reporting.
Evidence must follow power to the importer
The assessment says these requirements go beyond conventional renewable electricity certification. A renewable PPA and guarantees of origin may demonstrate contractual procurement and renewable attributes, but do not by themselves establish that electricity meets the full CBAM methodology.
That distinction can complicate sales through intermediary traders, balancing portfolios or commercial arrangements involving multiple counterparties. Developers increasingly need a traceable evidence chain from the power plant to the EU importer to show that electricity attributed to a particular installation meets contractual, physical and timing conditions.
Supporting records can include generation metering, SCADA production records, PPA documentation, physical delivery schedules, transmission capacity nominations, balancing records and independent verification. Together, these records need to connect the installation’s output with the relevant delivery and capacity nominations.
The verification challenge is particularly relevant to Serbian wind and solar projects seeking access to Hungary, Croatia or Romania, and Montenegrin generators targeting Italy. Wind, solar and hydropower can produce electricity with very low direct carbon emissions, but that alone does not establish an emissions value an EU importer can use for CBAM.
Modelled costs for restricted market access
In an illustrative scenario, the Secretariat estimated that a 130 MW onshore wind project could face €8.9 million in opportunity costs over six months if it had to sell output locally rather than access higher-priced EU markets. The estimate is a modelled risk under the assumptions considered, not a reported loss at a specific generating facility.
Proposed EU amendments could make some aspects of actual-emissions reporting more flexible, but they should not be treated as enacted requirements while the legislative process continues. The commercial distinction is emerging between low-carbon electricity backed by a compliant, verifiable delivery structure and electricity for which the required evidence cannot be established.
For Western Balkan renewable developers, emissions verification is becoming part of electricity commercialisation alongside grid connection, forecasting, balancing and power sales. The rules make the contractual and operational records behind an export relevant to whether it can receive actual-emissions treatment.
