The second quarter of 2026 brought a partial easing of the disruption that followed the start of the definitive phase of the EU Carbon Border Adjustment Mechanism (CBAM), but the Western Balkan electricity market did not return to its previous trading structure. Price spreads narrowed, correlations with EU benchmarks recovered, and the region returned to its usual seasonal position as a net importer. However, commercial electricity trade with the EU remained significantly below 2025 levels, while power increasingly flowed through a smaller number of northern and southeastern European corridors.
The Energy Community Secretariat’s Q2 assessment covers Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia, as well as neighbouring markets in Bulgaria, Croatia, Greece, Hungary, Italy and Romania. It examines electricity generation, day-ahead prices, cross-border price spreads, transmission capacity auction values, power exchange liquidity, and scheduled and physical electricity flows. The Secretariat cautions that the evidence remains preliminary, as CBAM began alongside exceptionally favourable hydrological conditions, making it difficult to distinguish carbon-related effects from seasonal market factors.
The main shift in Q2 was a return from the region’s exceptional net export position of around 1,247 GWh in Q1 to net imports of approximately 1,048 GWh. This was close to the normal seasonal balance recorded a year earlier. Imports from the EU nevertheless fell 14% year on year to 4,271 GWh, while exports declined 16% to 3,223 GWh. Gross scheduled electricity trade across Western Balkan–EU borders dropped from 8,828 GWh to 7,494 GWh, representing a decline of around 15%. For the first half of the year, the contraction reached 19%.
The decline occurred despite almost complete allocation of the transmission capacity offered on the main export corridors. The market was therefore not simply facing a shortage of available transmission rights. Traders continued to purchase capacity, but scheduled less electricity across it. This distinction is important because it points to uncertainty surrounding carbon costs, eligibility of actual emissions values, power purchase agreement (PPA) structures and future regulatory changes, rather than a purely physical transmission constraint.
At the same time, domestic power exchange liquidity improved. Day-ahead traded volumes across the four Western Balkan power exchanges increased 19% to 2.70 TWh. ALPEX recorded a 52% increase, MEPX rose 49%, MEMO grew 31%, while SEEPEX increased 7%. Regional market activity was therefore not disappearing. Instead, it was shifting inward, with more electricity being traded on domestic exchanges and less being transferred commercially across the EU border.
The geographical pattern also changed. Scheduled exports from Serbia to Hungary increased 111%, while electricity within the Western Balkans increasingly moved northwards through Serbia. Greece became a stronger exporter to Bulgaria, North Macedonia and Albania, supported by growing solar and wind generation. Montenegro’s exports to Italy recovered, while several established transit corridors through North Macedonia, Bulgaria and Croatia remained weak.
CBAM did not cause all of these developments, but it is increasingly becoming part of the economics determining which routes remain commercially viable. National default emission factors create a significant cost disadvantage for carbon-intensive power systems, while Albania’s zero factor preserves competitiveness at much narrower price spreads. Traders are increasingly assessing not only the visible day-ahead price differential but also carbon certificate exposure, hourly delivery structures, physical PPA traceability and the prospect of regulatory changes.
The first half of 2026 therefore marks the beginning of a more segmented regional electricity market. Domestic power exchanges are becoming more liquid, while cross-border integration with the EU is weakening. Serbia is gaining importance as a northern trading and transit hub, Greece is strengthening its position as a regional supply centre, and renewable power producers are discovering that access to EU prices depends as much on verification and contractual structures as it does on physical generation.