Since January 1, 2026, EU imports of electricity from Serbia have been subject to the definitive phase of the Carbon Border Adjustment Mechanism (CBAM). Serbian exporters and electricity traders are required to operate under the rules already in force while changes that could affect electricity treatment remain under negotiation in Brussels. Compliance is determined by the framework applicable at the time of import, rather than by an anticipated future version.
De minimis limits do not apply to electricity or hydrogen
The 50-tonne de minimis threshold introduced for cement, iron and steel, aluminium and fertilisers does not cover electricity or hydrogen. An EU importer purchasing Serbian electricity cannot treat a transaction as outside CBAM solely because its volume or value is limited. The distinction is relevant while electricity methodology changes are being negotiated.
The European Commission issued guidance for the definitive period on August 14, 2026, covering electricity, iron and steel, aluminium and other sectors. It also updated its general questions and answers on October 15, 2026. These materials sit alongside the rules currently applicable to imports.
Commission proposal on electricity methodology remains under negotiation
Under COM(2025) 989, the European Commission proposed changes to how embedded emissions are attributed to electricity. The measures would broaden the treatment of PPAs involving intermediaries, remove the current network condition in Annex IV point 5(b), and revise the nomination test. They are also intended to encourage decarbonisation in third-country electricity systems.
The proposal is politically advanced but not yet final law. The Council of the EU agreed its position on June 12, 2026, while the European Parliament adopted its first-reading position on September 15, 2026 and returned the file for interinstitutional negotiations. Serbian developers and traders are therefore expected to plan for both current-law operations and a reform scenario if amended rules take effect.
A change-in-law clause could allow a PPA to shift toward a broader intermediary structure after a clearly defined legal trigger. That trigger should be linked to the publication and application of an adopted rule rather than a political announcement. The approach is aimed at aligning contract mechanisms with when legal requirements become effective.
CBAM expansion proposals for steel- and aluminium-intensive products
The European Commission has also proposed bringing 180 steel- and aluminium-intensive downstream products into CBAM from 2028. The Council’s position increased the proposed list to around 200 products. The European Parliament supported a substantially broader list of 457.
The final scope remains under negotiation, with the proposed expansion extending beyond basic materials into industrial supply chains. Serbia’s trade links with the EU make the potential scope relevant for its industry. Serbian goods exports totalled approximately EUR 23.7 billion in January–August 2026, up 8.8% year on year.
EU member states accounted for 58.3% of Serbia’s total external trade. For companies whose products are not currently covered by CBAM, mapping is needed for where steel and aluminium inputs enter goods ultimately sold in the EU. This applies in anticipation of possible downstream coverage changes.
Recordkeeping, contract terms and project finance under current rules
Historical evidence should remain tied to the legislation applicable when the electricity was imported. Reconstructing or rewriting past data using a later methodology could create additional audit risks instead of resolving an original compliance issue. Data systems are expected to stay flexible enough to accommodate methodology changes while still supporting compliance with current rules.
The same distinction applies to project finance decisions. Investors should not capitalise a higher expected export premium solely on the assumption that qualification will become easier under the Commission’s proposal. Banks are likely to assess whether projects remain financially viable under rules now in force, treating possible reform as optional upside until final legal text, application timing and implementing requirements are established.
For Serbian exporters, maintaining current compliance and including appropriate conversion mechanisms in long-term contracts is presented as a practical approach rather than waiting for Brussels negotiations to conclude. Regulatory flexibility can create commercial value, but assuming a future benefit before it takes legal effect introduces financial risk.