At the Berlin Process Summit in Montenegro on 22 October 2026, the Energy Community Secretariat urged closer coordination between Western Balkan electricity market integration and the EU’s Carbon Border Adjustment Mechanism (CBAM). It warned that poorly aligned rules could discourage renewable investment and create commercial divisions between EU and non-EU electricity markets.
The EU plans to integrate Western Balkan electricity markets before countries in the region become full members of the bloc. Through the Energy Community framework, they are progressively adopting EU electricity rules. The work covers market coupling, transparency, transmission-capacity allocation, balancing arrangements and closer regulatory alignment.
Successful implementation could support electricity price convergence and more efficient use of regional generation and interconnection capacity. The integration effort, however, operates under different legal requirements from CBAM compliance, the Secretariat said: connecting markets does not by itself remove carbon-related obligations on electricity imported into the EU.
Electricity imports and CBAM conditions
Article 2(7) of the CBAM Regulation provides for a conditional exemption for electricity imports. The conditions include market coupling, regulatory alignment, climate-policy commitments and an assessment by the European Commission. Market coupling alone does not automatically exempt imported electricity from CBAM.
During the transition, Western Balkan power exchanges may align more closely with European trading practices while exports from the region remain subject to carbon-related obligations. Markets could therefore become more closely integrated in their operation without the integration itself removing the requirements on electricity exports.
Transmission corridors connect Western Balkan systems with Hungary, Croatia, Romania, Bulgaria and Italy. They support electricity supply, commercial trading and regional security of supply. Additional border costs could affect how the connections are used, even when wholesale price differences would otherwise make cross-border trade economically attractive.
The issue could be particularly relevant during periods of strong renewable generation, when low-cost Western Balkan electricity could serve demand in neighbouring EU countries. The rules’ interaction will affect the commercial value of interconnectors, renewable generation and cross-border power purchase agreements. For Serbia and Montenegro, it could shape export strategies, renewable-project financing and participation in European power markets for the remainder of the decade.
Amendments remain under negotiation
Western Balkan governments face the parallel tasks of advancing electricity market integration and developing carbon-pricing, emissions-monitoring and verification arrangements for durable access to EU markets. A central question is whether electricity from the region can access EU market prices on commercially equivalent terms before regulatory uncertainty weakens investment incentives. The longer-term policy objective is for integration and decarbonisation to reinforce each other rather than send conflicting signals to investors.
The European Commission has proposed CBAM amendments covering emissions calculations and more flexibility in demonstrating actual emissions. The Council adopted its negotiating position in June 2026, and the European Parliament voted on amendments in September. By early November 2026, the legislative process had not produced a final enacted replacement for the existing framework.
The relevant references are Regulation (EU) 2023/956, Article 2(7), European Commission proposal COM(2025)989 and European Parliament procedure 2025/0419(COD).