Electricity trade between the Western Balkans and the European Union recovered from the second quarter but remained below its level a year earlier, as price convergence weakened. A report on regional power trade found that spreads above €20/MWh occurred in more than half of all hours on borders with EU markets.
Such spreads were more frequent than in Q2 2026 and more than twice as common as in Q3 2025. The report found that physical capacity, carbon costs and market arrangements prevented prices from converging fully, even when trading incentives existed.
CBAM has become part of electricity dispatch and trading calculations. On every assessed border with a non-zero default emission value, the indicative CBAM cost per MWh was higher than the average price advantage of the Western Balkan market over its EU neighbour. Albania was the exception because its default emission value was zero.
For exporters other than Albania, carbon costs can erase some or all of the apparent wholesale price advantage. Montenegro’s exports to Italy were around 80% higher year on year in Q3, showing that trade continued where the underlying market opportunity remained.
The submarine cable gives Montenegro access to Italy’s higher-value market and provides a route where verified low-carbon generation can remain commercially attractive after carbon-border adjustments. The report said generators increasingly need verifiable emissions data, clear contractual allocation, reliable metering, scheduling evidence and documentation supporting the use of actual emissions where allowed.
Electricity trade is increasingly a combined energy, transmission and compliance product. Exchange liquidity may deepen through winter, while export margins will continue to depend on transmission capacity and the applicable carbon cost. Contracts and evidence supporting actual emissions, where permitted, can become decisive to the economics of individual trades.
