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. A plant can be operational, connected to the grid and able to deliver electricity while still having difficulty meeting the EU methodology’s requirements for actual-emissions treatment.
The Energy Community Secretariat’s Q2 2026 assessment identified difficulties involving verification, power purchase agreement eligibility and access to favourable EU prices. Its findings indicate that carbon compliance can affect project bankability even when a generating technology has very low direct emissions.
Cross-border electricity sales have historically helped make merchant revenues and long-term power purchase agreements attractive to renewable developers in the region. Higher wholesale prices in neighbouring European markets can offer generators revenue beyond domestic sales, but default emissions treatment may change the economics of importing their electricity into the EU.
Export treatment shapes 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 actual-emissions requirements. Domestic sales do not give rise to export-related CBAM obligations, while cross-border sales under default treatment carry cost exposure that may affect the achievable export price.
An export structure meeting actual-emissions requirements may preserve a stronger commercial relationship with EU buyers. Differences among the cases can alter electricity-price assumptions, operating cash flow, debt-service capacity and project valuation. The exposure applies to operational projects and assets under development, making it relevant to financing decisions before as well as after exports begin.
A long-term export power purchase agreement may provide a relatively predictable electricity price, but the allocation of CBAM costs among the generator, trader and EU importer can determine how much revenue reaches the project company. The contractual allocation can therefore affect the project’s returns beyond the agreed electricity price.
Banks and investment funds need to test whether an assumed export route is commercially realistic, whether nominated electricity can be linked to eligible generating assets, and whether counterparties can provide required regulatory evidence. The availability of accredited verification services, as well as the technical capability of metering and scheduling systems, is also relevant to financing assessments.
Contracts and evidence underpin exports
Export-oriented power purchase agreements increasingly need clear provisions covering 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. The contractual arrangements need to clarify which party is responsible for supporting the export’s emissions treatment and providing evidence.
Regional interconnections are relevant to projects seeking access to European wholesale prices. Montenegro’s connection with Italy and Serbia’s interconnections with Hungary, Romania and Croatia are among the routes relevant to renewable generators, but the connections alone do not establish eligibility for actual-emissions treatment.
CBAM readiness enters lender assessments
Developers addressing CBAM requirements during project preparation may be better positioned to negotiate export agreements and demonstrate revenue resilience to lenders. Projects based 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 one able only 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, together with implementing rules for actual-emissions evidence, are cited as research references. The applicable methodology and evidence requirements remain central to how exports are treated.