Proposed changes to the European Union’s carbon border rules could substantially reduce default emissions assigned to electricity from Serbia, Montenegro and Bosnia and Herzegovina and make verified renewable exports easier to execute.
Under the existing methodology, national default factors are calculated largely from fossil-fuel generation. That produces values of 1.148 tCO₂/MWh for Bosnia, 1.041 tCO₂/MWh for Serbia and 0.979 tCO₂/MWh for Montenegro.
At the second-quarter CBAM certificate price of €75.28 per tonne, those factors imply import costs of approximately €86.42/MWh, €78.37/MWh and €73.70/MWh, respectively.
The European Commission has proposed calculating default factors using the country’s entire electricity mix rather than concentrating on fossil production. That would allow hydro, wind and solar generation to reduce the national average.
The impact could be material in systems such as Montenegro, where large hydropower output coexists with the Pljevlja lignite plant. The current default factor can leave Montenegrin electricity carrying a CBAM cost that exceeds the average commercial spread across the undersea interconnector to Italy.
The reform would also remove the requirement for exporters seeking actual-emissions treatment to prove that no physical congestion existed between the generating installation and the EU at the hour of export.
Renewable producers have little control over congestion across multiple transmission systems. Removing the condition would eliminate one of the most difficult elements of the present evidence chain.
The remaining requirements would still be demanding. Producers and declarants would need to demonstrate a qualifying PPA, hourly production, firm nominations across each relevant border, imported quantities and accredited verification.
The Council adopted its negotiating position in June, and the European Parliament’s environment committee approved its report in July. A political decision is expected towards the end of 2026.
If adopted in its current form, the electricity changes could apply retroactively from January 1, 2026. That possibility is already influencing market expectations, particularly on corridors where present default values make exports uneconomic.
The proposal would not remove CBAM from Balkan electricity. But it could shift the system away from default penalties that bear little resemblance to the carbon content of a specific renewable delivery.
For developers seeking to finance wind, solar and hydro projects on the strength of EU exports, that distinction could determine whether the European market represents a bankable revenue stream or only a theoretical one.