Electricity exports from the Western Balkans to the European Union fell 17% year on year in the third quarter of 2026, as trade economics increasingly reflected carbon-border costs alongside wholesale prices and transmission constraints. The Energy Community Secretariat issued its third quarterly Carbon Border Adjustment Mechanism (CBAM) electricity monitoring report on 4 November, covering exchanges between the six Western Balkan contracting parties and neighbouring EU markets.
The report recorded a 14.3% annual decline in gross scheduled electricity exchanges between the region and the EU, although exchanges rose 8.6% from the second quarter of 2026. Gross exchanges during the first nine months of 2026 were 17.8% below the same period of 2025, and the Western Balkans remained a net electricity importer.
Flows differed by route: Montenegro’s electricity exports to Italy increased by approximately 80%, while Serbia’s exports to Hungary fell 21.6%. The report noted that Serbian shipments declined despite wholesale price differences that might otherwise have encouraged additional sales. National generation availability, electricity demand, interconnector conditions and the effective carbon cost of exports contributed to the divergent movements.
Price spreads and carbon exposure
Electricity price differentials across monitored Western Balkan–EU borders exceeded €20/MWh in 53.9% of third-quarter 2026 hours, compared with 21.7% a year earlier. The report cautioned that gross spreads are not achievable trading margins: transmission charges, congestion, losses, balancing exposure and CBAM costs can materially change delivery economics.
CBAM is particularly relevant to electricity produced from emissions-intensive generation. If eligibility based on actual emissions cannot be demonstrated, the applicable regulatory emissions factor can materially increase the effective cost of electricity imported into the EU.
The reduction in scheduled exports cannot be attributed entirely to CBAM, since changes in generation, energy demand, transmission availability and market conditions also affected cross-border transactions. For Serbian electricity producers and traders, the figures underline the need to calculate margins after carbon-border exposure rather than rely on wholesale exchange spreads alone.
Montenegro’s increased deliveries to Italy show that export opportunities remain available during the regulatory transition, subject to the characteristics of individual transactions. Banks financing electricity exports and renewable generators should distinguish theoretical price spreads from revenues supported by physically deliverable, contractually documented electricity. Emissions evidence and regulatory eligibility are becoming increasingly important to the commercial competitiveness of cross-border electricity trade.