The European Union’s Carbon Border Adjustment Mechanism (CBAM) is changing electricity trading economics across Southeast Europe. It is creating a wider gap between wholesale power values and the carbon-adjusted cost of electricity imported from the Western Balkans. The effect applies to exports into EU markets, where carbon treatment influences whether scheduled transactions remain profitable.
Electricity imports face no equivalent free-allocation relief to that available to some sectors during the transition away from free EU carbon allowances. This exposes carbon-intensive power exports to additional costs from the beginning of 2026. The impact is described as potentially more immediate than in steel and aluminium.
CBAM certificate prices and indicative carbon charges for regional exporters
The latest published CBAM certificate price reached €82.32 per tonne of CO₂ for the third quarter, up from €75.28 in the preceding quarter. Using existing national default factors, the third-quarter price implies gross CBAM exposure of about €85.70/MWh for Serbia, €80.59/MWh for Montenegro, and €94.50/MWh for Bosnia and Herzegovina. North Macedonia is indicated at €73.01/MWh, while Albania’s zero default factor produces no carbon charge under the default calculation.
The amounts are illustrative based on the third-quarter certificate price rather than final charges for October deliveries. The fourth-quarter certificate price will be set in January 2027, and actual liabilities may reflect eligible deductions for carbon prices paid in the country of origin. The figures are presented as showing how CBAM can exceed conventional wholesale trading margins.
Day-ahead spreads show limited room versus indicative default-based exposure
On October 9, Serbia’s SEEPEX day-ahead electricity price rose to €239.96/MWh, up almost 34% from the prior session. Hungary’s HUPX reached €269.43/MWh. The difference between the two was €29.47/MWh, which remained substantially below Serbia’s indicative default-based carbon exposure.
A trader importing Serbian electricity into Hungary would therefore face difficulty covering the carbon cost using that daily average wholesale spread alone. This would be before considering cross-border transmission capacity, losses, balancing and other trading expenses . Montenegro’s BELEN price reached €223.39/MWh, while Italian wholesale prices in several bidding zones were around €230–235/MWh.
The Montenegro–Italy interconnection therefore also showed a narrow indicative price differential on that day. Daily average spreads are not executable trading margins, and hourly variations can create specific opportunities . The structural effect described is that a low wholesale price outside the EU no longer guarantees competitive electricity inside EU markets.
Regional flow changes and separation between domestic trade and EU exports
The Energy Community Secretariat has identified changes in regional electricity flows linked to these developments. Gross commercial exchange between Western Balkan markets and neighbouring EU markets declined by approximately 19% year on year in the first half of 2026, alongside hydrological conditions, generation availability and changing import requirements.
The regional market is increasingly split into two commercial segments: domestic and regional trading where EU CBAM import charges do not directly apply, and exports into EU markets where carbon-adjusted costs affect whether transactions remain profitable . For Serbia’s EPS, Montenegrin EPCG and power producers across Bosnia and Herzegovina, greater emphasis is placed on generation technology, electricity origin and evidence of actual emissions.
Renewables exports depend on physical evidence beyond guarantees of origin
This distinction is especially relevant for renewable energy projects. A Serbian wind farm producing low-carbon electricity does not automatically receive favourable CBAM treatment when its output is exported into Hungary unless the EU declarant meets conditions for using actual embedded emissions . In that case, exported electricity can remain subject to Serbia’s national default value.
The rules require a qualifying physical power purchase agreement, evidence of the generating installation, compliant cross-border capacity nominations, hourly matching between generation and nominated deliveries, and evidence about grid connection or lack of congestion. An accredited verifier must assess supporting information . Guarantees of Origin alone cannot replace this physical and contractual evidence.
Implications for project finance and industrial CBAM liabilities
For project developers and lenders, a wind or solar project may generate competitively but still face uncertainty over additional value from selling directly into the EU . This affects projected revenues, long-term power purchase agreements, financing assumptions and investment cases for new renewable capacity.
The impact extends to industrial manufacturers with an important regulatory distinction under current CBAM rules. Indirect emissions from purchased electricity are included in CBAM liability for cement and fertilisers, but not generally for iron, steel and aluminium, where liabilities focus on direct embedded emissions . As a result, sourcing renewable electricity does not automatically reduce CBAM certificate obligations for Serbian steel or aluminium exporters.
Cement and fertiliser producers may see qualifying lower-emission electricity influence the carbon intensity used in CBAM calculations, subject to applicable methodology and verification requirements . The European Commission has proposed changes to electricity CBAM methodology that could reduce disadvantages faced by renewable generators in countries whose default emission factors reflect carbon-intensive thermal production; such reforms have not yet been fully adopted .
Timing of declarations and certificate purchases for 2026 imports
Banks financing renewable energy projects, electricity-intensive manufacturers or cross-border trading businesses face additional revenue margin and regulatory risk from CBAM . New project assessments increasingly need to separate conventional wholesale electricity revenues from revenues supported by verified, CBAM-compliant physical export arrangements . Existing loans may also require reassessment where earlier financial models assumed uninterrupted access to EU wholesale price premiums.
The first CBAM certificates covering 2026 electricity imports will be purchased from February 2027. Annual declarations and certificate surrender are due by September 30, 2027 . For Southeast Europe, the challenge is that electricity markets remain physically interconnected while commercial economics diverge due to carbon treatment.
A megawatt-hour produced in Serbia or Montenegro can still reach a European buyer through interconnected transmission networks. Whether it can be sold profitably will depend increasingly on its carbon classification and transaction evidence rather than only on differences between wholesale prices across the border .
