Renewable-electricity projects in Serbia, Montenegro and the wider Western Balkans face new export-revenue and financing risk as the Carbon Border Adjustment Mechanism (CBAM) changes the terms for selling power into the European Union. The Energy Community Secretariat’s Q2 2026 assessment identified difficulties with verification, power purchase agreement eligibility and access to favourable EU market prices.
Cross-border sales have helped make merchant revenues and long-term power purchase agreements attractive to renewable developers in the region. Higher wholesale prices in neighbouring European markets can give generators revenue beyond domestic sales, but a project’s ability to deliver electricity does not by itself establish that its output qualifies for actual-emissions treatment under the applicable EU methodology.
If a project cannot meet the requirements for actual-emissions treatment, default emissions treatment may materially change the economics of importing its electricity into the EU. The exposure concerns both operational renewable projects and assets still under development, including wind, solar and hydropower.
Export assumptions shape project returns
Financing assessments may need to compare three revenue cases: domestic electricity sales, cross-border sales subject to default emissions treatment, and exports that meet the requirements for actual-emissions treatment. Carbon compliance can affect bankability even where a generating technology has very low direct emissions.
Domestic electricity sales do not create export-related CBAM obligations. Cross-border sales under default treatment carry associated cost exposure that may affect the achievable export price, while an export structure meeting actual-emissions requirements may preserve a stronger commercial relationship with EU buyers. The differences can affect electricity-price assumptions, operating cash flow, debt-service capacity and project valuation.
A long-term export power purchase agreement can provide a relatively predictable electricity price, but the allocation of CBAM costs among the generator, trader and EU importer can substantially affect the revenue ultimately available to the project company. The contract’s treatment of those costs therefore influences how much of the agreed export value reaches the project.
Banks and investment funds need to assess whether an assumed export route is commercially realistic, whether nominated electricity can be linked to eligible generating assets, and whether counterparties can provide the required regulatory evidence. The availability of accredited verification services and the technical capability of project metering and scheduling systems are also relevant to lending and investment assessments.
Contracts and evidence underpin export plans
Export-oriented power purchase agreements increasingly need clear provisions covering emissions evidence, verification responsibilities, changes in CBAM legislation, transmission capacity and balancing electricity. They also need to allocate liability if required evidence cannot be provided. Inadequate allocation could lead to disputes among generators, electricity traders and EU importers after commercial delivery.
Regional connections are relevant to projects seeking access to European wholesale prices: Montenegro is connected with Italy, while Serbia has interconnections with Hungary, Romania and Croatia. These routes do not, by themselves, establish that exported electricity meets the requirements for actual-emissions treatment.
Developers that address CBAM requirements during project preparation may be better positioned to negotiate export agreements and demonstrate revenue resilience to lenders. Projects built on unverified assumptions of unrestricted access to EU markets may face higher financing risk or more conservative lender revenue forecasts. The emerging investment standard is a project with a sales structure, documentary controls and contractual risk allocation that support its intended market revenues, not merely one able to generate electricity at a competitive cost.
CBAM readiness is becoming part of renewable-project bankability, rather than a compliance matter to defer until exports begin. The European Commission’s electricity CBAM methodology and certificate pricing, alongside implementing rules for actual-emissions evidence, are cited as research references for the issue.