The European Union’s Carbon Border Adjustment Mechanism is beginning to alter Western Balkan electricity trade before the region has completed its replacement of coal. The result is an uncomfortable transition in which renewable investment is accelerating, yet exported electricity can still carry the carbon characteristics of the national grid.
North Macedonia provides the clearest example. Local and international developers are advancing projects that could add 2.8 GW of low-carbon capacity, close to the country’s existing installed power capacity of roughly 3 GW. The pipeline includes Alcazar Energy’s 396 MW Štip wind project, a proposed 400 MW solar development by Akuo Energy and a 414 MW wind project associated with WDP.
The ambition is to convert North Macedonia from a long-standing net importer into a net electricity exporter. That strategy has wider economic importance because approximately 77% of the country’s merchandise exports went to the EU in 2024. Affordable low-carbon electricity could support industrial expansion, attract foreign investment and improve the competitiveness of existing exporters.
CBAM complicates that model. Western Balkan cross-border electricity volumes reportedly fell by 19% in the first six months of 2026. North Macedonia earned €36.8 million from electricity exports in the first five months. Annualised mechanically, that would produce approximately €88.3 million, around 44.6% below the €159.3 million recorded in 2025.
The central problem is the treatment of electricity through national grid-emission factors. A renewable plant physically producing low-carbon power may still be associated with the average emissions intensity of a coal-heavy system when electricity is exported. Renewable projects lower the national average, but they can remain commercially penalised by the continued presence of lignite generation.
This creates a bankability problem. A wind or solar project developed partly for EU exports cannot rely only on a conventional power-purchase agreement. It needs credible evidence connecting generation, metering, scheduling, grid delivery and the importing counterparty. The commercial value of electricity increasingly depends on the quality of the emissions and origin data attached to it.
The required architecture is more demanding than annual guarantees of origin. Exporters and industrial buyers need installation-level metering, time-correlated production and consumption data, transparent treatment of losses, validated contractual routes and records demonstrating that the same renewable attribute has not been allocated twice. Without those controls, the low-carbon claim may not survive importer review or third-party verification.
The regional implications extend well beyond North Macedonia. Serbia, Bosnia and Herzegovina and Kosovo retain substantial coal generation. Montenegro has a lower-carbon mix but still faces periods when thermal output and imports influence grid intensity. Albania benefits from hydropower but remains exposed to hydrological variation and imported electricity.
Electricity trading will therefore separate into two products. Conventional wholesale electricity will continue to be priced through market coupling, congestion and hourly supply. Documented low-carbon electricity will carry an additional value based on its verified emissions characteristics and its usefulness to CBAM-exposed industrial buyers.
The most competitive renewable developers will be those that design the evidence chain at the same time as the physical plant. Metering, data governance and contractual allocation are becoming project infrastructure. In Western Balkan electricity trade, a megawatt-hour is no longer fully defined by where and when it was generated; it is also defined by what can be proven about it.