The Carbon Border Adjustment Mechanism (CBAM) is adding revenue and financing risk for renewable-electricity projects in Serbia, Montenegro and the wider Western Balkans, where access to EU markets and the prices available may depend on evidence of actual emissions. The Energy Community Secretariat’s Q2 2026 assessment identified difficulties involving verification, power purchase agreement eligibility and access to favourable EU market prices.
A project can be connected to the grid, operational and able to deliver electricity while still having difficulty demonstrating that its output qualifies for actual-emissions treatment under the applicable EU methodology. If it cannot meet those requirements, default emissions treatment may materially change the economics of importing its electricity into the EU. The assessment indicates that carbon compliance can affect project bankability even when the generating technology has very low direct emissions.
Cross-border electricity sales have historically helped make merchant revenues and long-term power purchase agreements attractive for renewable projects in the region. Higher wholesale prices in neighbouring European markets can provide generators with revenue beyond domestic sales. The exposure applies both to operational projects and assets under development, making the treatment relevant to financing before as well as after exports begin.
Export treatment affects project returns
Financing assessments may need to compare three revenue cases: domestic electricity sales, cross-border sales under default emissions treatment, and exports that meet the requirements for actual-emissions treatment. Domestic sales do not give rise to export-related CBAM obligations. Cross-border sales under default treatment carry associated cost exposure and may affect the export price a generator can achieve.
An export structure that meets actual-emissions requirements may preserve a stronger commercial relationship with EU buyers. Differences among the three revenue cases can affect electricity-price assumptions, operating cash flow, debt-service capacity and project valuation. A long-term export power purchase agreement may provide a relatively predictable electricity price, but how CBAM costs are allocated among the generator, trader and EU importer can substantially affect revenue ultimately available to the project company.
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 financing assessments.
Contracts and evidence underpin export plans
Export-oriented renewable power purchase agreements increasingly need clear provisions for 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 has taken place.
Regional links are relevant for projects seeking access to European wholesale electricity prices. These include Montenegro’s connection with Italy and Serbia’s interconnections with Hungary, Romania and Croatia. Developers addressing CBAM requirements during project preparation may be better positioned to negotiate export agreements and demonstrate revenue resilience to lenders; projects relying on unverified assumptions of unrestricted EU market access may face higher financing risk or more conservative lender revenue forecasts.
The emerging investment standard is a renewable project with a sales structure, documentary controls and contractual risk allocation capable of supporting its intended market revenues, rather than merely the ability to generate electricity at a competitive cost. CBAM readiness is becoming part of project bankability, not a compliance matter to defer until exports begin. The European Commission’s electricity CBAM methodology and certificate pricing, as well as implementing rules for actual-emissions evidence, are cited as research references for the issue.