CBAM is set to change how electricity is traded between the EU and the Western Balkans from 2026. From that point, EU-bound power from the Western Balkans is expected to be assessed not only by €/MWh, border capacity and hourly scarcity. The assessment will also incorporate embedded CO2, national carbon pricing, generation mix and proof of low-carbon origin.
Energy Community’s Q1 2026 CBAM monitoring indicates early market effects. Commercial electricity flows between the EU and WB6 contracted by roughly 25% year on year. The monitoring also reported that traders appeared to prefer routes with less exposure to CBAM friction.
This shift is already affecting operational decisions across borders. CBAM is influencing route selection, interconnector utilisation and cross-border optimisation for traders active in the region. The change is reflected in how commercial flows are being allocated between available corridors.
Coal-heavy exports face carbon discount alongside negative price environment
For SEE market participants, one structural change concerns coal-heavy baseload exports. Serbian, Bosnian, Montenegrin and North Macedonian thermal generation can still trade regionally, but EU-bound exports face a carbon discount. The carbon adjustment is described as weakening the previous approach of exporting surplus lignite output into higher-priced EU hours.
Serbia’s export economics are highlighted as particularly exposed under the combined policy and market changes. CBAM arrived at the same time as SEEPEX introduced negative prices starting 5 May 2026. The day-ahead market allowed prices down to -€500/MWh, while intraday prices were allowed down to -€9,999/MWh.
Low-carbon generation gains value in CBAM-exposed trading
A second trend relates to how hydro, wind and solar are valued in trading. Low-carbon MWh are described as carrying a compliance premium when linked to industrial offtake, CBAM-sensitive exporters or EU buyers seeking cleaner supply chains. This affects how volumes are marketed for delivery into EU-connected demand.
The source links this shift to observed corridor relevance in early 2026. Albania’s and Greece’s hydro-linked flows reportedly became more relevant in Q1 2026. At the same time, alternative corridors outside CBAM friction were described as becoming more attractive for commercial routing.
Power purchase agreements used for documented carbon-risk hedging
A third structural development concerns electricity PPAs in CBAM-exposed markets. For industrial exporters in sectors including steel, aluminium, fertilizers, cement and processing, a PPA is described as more than a hedge against wholesale price movements. The documentable element is tied to metering, physical delivery logic, hourly matching and reliable emissions accounting.
The source associates this with improved bankability for specific project types across the region. Bankability is described as strengthened for wind, solar, BESS and hybrid projects in Serbia, Montenegro, Bosnia and North Macedonia when they can support the required emissions documentation.
Domestic carbon costs and flexibility economics interact with CBAM
A fourth trend involves domestic carbon pricing becoming part of trading decisions. Montenegro is used as an example of concentrated exposure where electricity represents a very large share of exports. EPCG has warned that CBAM costs could reach about €191 million annually.
The source also cites reported timing and magnitude of impact. It states that reports linked CBAM pressure to around €13 million in Q1 2026. It further notes that TE Pljevlja remains central to generation in Montenegro.
A fifth trend combines negative prices with CBAM effects on emissions-intensive deliveries. Negative prices are described as punishing inflexible generation during oversupply hours, while CBAM is described as punishing high-carbon exports during EU-bound hours. Together, they increase the value of battery storage, hydro flexibility, demand response, intraday optimisation and balancing services.
The source describes a shift in where trading opportunities arise under these conditions. It states that traders will increasingly make money from hourly positioning, congestion management, imbalance management and carbon-aware routing rather than simple baseload exports. This aligns with the earlier observation that commercial flows are already responding to CBAM friction.
Two-price framework for SEE power from 2026
The overall market result described is a move toward a two-price framework for SEE power trading from 2026. One component is the visible wholesale price. The second component is the embedded carbon value or penalty attached to each MWh.
The source states that traders, utilities and banks that ignore the second price risk misreading spreads. It also says this could lead to overvaluing coal-backed exports while underestimating the bankability premium of clean, traceable electricity for deliveries into EU-connected markets.
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