The Energy Community Secretariat called for Western Balkan electricity market integration to be better aligned with the Carbon Border Adjustment Mechanism (CBAM), warning that poor coordination could deter renewable investment and deepen commercial divisions between EU and non-EU markets. The appeal came at the Berlin Process Summit in Montenegro on 22 October 2026, as the EU pursues closer regional electricity links before Western Balkan countries achieve full membership.
Countries in the region are progressively adopting EU electricity rules through the Energy Community framework. Integration covers market coupling, electricity market transparency, transmission capacity allocation, balancing arrangements and closer regulatory alignment. It could support price convergence and more efficient use of regional generation and interconnection capacity, the Secretariat said.
Market links do not remove CBAM obligations
Electricity market integration and CBAM compliance are governed by different legal requirements. Imports of electricity into the EU remain subject to the applicable CBAM framework unless a specific legal exemption applies. Article 2(7) of Regulation (EU) 2023/956 provides for a conditional exemption, with requirements including market coupling, regulatory alignment, climate-policy commitments and assessment by the European Commission.
Market coupling alone does not automatically exempt imported electricity. Western Balkan power exchanges could align more closely with European trading practices while electricity exports from the region continue to face carbon-related obligations.
The European Commission has proposed amendments to the treatment of imported electricity under CBAM, including changes to emissions calculations and greater flexibility for demonstrating actual emissions. The proposal is COM(2025)989. The Council adopted its negotiating position in June 2026, and the European Parliament voted on amendments in September 2026 under procedure 2025/0419(COD). By early November 2026, the legislative process had not produced a final enacted replacement for the existing rules.
Border costs and investment decisions
The transition affects Serbia, Montenegro and neighbouring countries seeking access to European wholesale electricity markets, cross-border balancing arrangements and longer-term investment opportunities. Transmission corridors link Western Balkan electricity systems with EU markets in Hungary, Croatia, Romania, Bulgaria and Italy, supporting electricity supply, commercial trading and regional security of supply.
Additional border costs can alter how those connections are used, even when wholesale price differences would otherwise make trade economically attractive. The effect could be especially relevant during periods of strong renewable generation, when low-cost Western Balkan electricity could serve demand in neighbouring EU countries.
Western Balkan governments face the parallel tasks of advancing electricity market integration and developing carbon-pricing, emissions-monitoring and verification arrangements needed for durable access to the EU market. Investors’ assessment of the commercial value of interconnectors, renewable generation and cross-border power purchase agreements will be affected by the outcome.
For Serbia and Montenegro, the rules could shape electricity export strategies, renewable project financing and participation in European power markets for the remainder of the decade. The longer-term objective is for market integration and decarbonisation to reinforce each other rather than create conflicting investment signals. A central policy question is whether Western Balkan electricity can access EU market prices on commercially equivalent terms before regulatory uncertainty weakens investment incentives.