Renewable electricity producers in Serbia, Montenegro and neighbouring Western Balkan markets face a commercial barrier under the European Union’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 issue in its Q2 2026 assessment, dated July 2026, warning that producers unable to demonstrate compliance could face higher compliance costs and uncertainty over future electricity revenues.
Under the applicable framework, imports can use actual emissions only when several requirements are met together. Regulation (EU) 2023/956 and Implementing Regulation (EU) 2025/2547 require an eligible power purchase agreement (PPA), and the generating installation must meet the relevant network-connection or absence-of-congestion condition. The installation must emit no more than 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. An accredited verifier must certify that the requirements are met, with interim reporting supporting the certification.
Evidence must follow electricity to the importer
The Secretariat’s assessment says CBAM evidence requirements go beyond conventional renewable electricity certification. A renewable PPA and guarantees of origin can show contractual procurement and renewable attributes, but do not by themselves demonstrate compliance with the complete CBAM methodology for electricity.
That gap can complicate sales through intermediary traders, balancing portfolios or commercial arrangements involving multiple counterparties. Developers increasingly need a traceable chain of evidence from the generating plant to the EU importer, linking electricity attributed to a specific installation with CBAM’s contractual, physical and timing conditions.
Records can include generation metering, SCADA production records, PPA documentation, physical delivery schedules, transmission capacity nominations, balancing records and independent verification. Wind, solar and hydropower installations may have very low direct carbon emissions, but that alone does not establish an emissions value an EU importer can use under CBAM.
The requirements are particularly relevant to Serbian wind and solar projects seeking access to Hungary, Croatia or Romania, and Montenegrin generators targeting Italy. The challenge arises when producers must show that contracted electricity, physical delivery and network nominations all meet the applicable conditions.
Modeled opportunity costs for wind project
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 instead of accessing higher-priced EU markets. The estimate reflects 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 are not enacted requirements while the legislative process continues. The emerging commercial distinction is between low-carbon electricity supported 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.