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 arrangements could discourage renewable investment and create new commercial divisions between EU and non-EU electricity markets.
The EU plans to integrate Western Balkan electricity markets before the countries become full EU members. Through the Energy Community framework, the region is progressively adopting EU electricity rules covering market coupling, transparency, transmission-capacity allocation, balancing arrangements and regulatory alignment. Successful implementation could support electricity price convergence and more efficient use of regional generation and interconnection capacity.
Integration and cross-border trade
The integration process and CBAM compliance operate under separate legal requirements. Connecting markets does not by itself remove CBAM obligations on electricity imported into the EU. Article 2(7) of Regulation (EU) 2023/956 provides for a conditional exemption for electricity imports, subject to requirements including market coupling, regulatory alignment, climate-policy commitments and an assessment by the European Commission.
Market coupling alone does not automatically qualify imported electricity for the exemption. During the transition, Western Balkan power exchanges may align more closely with European trading practices while electricity exports from the region remain subject to carbon-related obligations. The countries therefore face the task of advancing market integration while developing carbon-pricing, emissions-monitoring and verification arrangements for durable access to EU markets.
Transmission corridors connect Western Balkan systems with Hungary, Croatia, Romania, Bulgaria and Italy, supporting electricity supply, commercial trading and regional security of supply. Additional border costs could alter how the connections are used, even when wholesale price differences would otherwise make trade economically attractive. The issue could be especially 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 investors. For Serbia and Montenegro, the outcome could shape electricity export strategies, renewable-project financing and participation in European power markets for the remainder of the decade. A central policy question is whether Western Balkan electricity can access EU market prices on commercially equivalent terms before regulatory uncertainty weakens investment incentives.
CBAM amendments remain under negotiation
The European Commission has proposed amendments to CBAM that include changes to emissions calculations and greater flexibility for demonstrating actual emissions. The Council adopted its negotiating position in June 2026, and the European Parliament voted on amendments in September.
The legislative references include European Commission proposal COM(2025)989 and European Parliament procedure 2025/0419(COD). By early November 2026, the process had not produced a final enacted replacement for the existing framework. The longer-term policy objective is for electricity market integration and decarbonisation to reinforce each other rather than create conflicting investment signals.