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 electricity exporters and traders must apply the rules already in force for imports. Proposed amendments that could affect electricity treatment are being negotiated in Brussels. Compliance is determined by the framework applicable at the time of import.
CBAM coverage for electricity and the de minimis limit
The 50-tonne de minimis threshold introduced for cement, iron and steel, aluminium and fertilisers does not extend to electricity or hydrogen. An EU importer purchasing Serbian electricity cannot exclude a transaction from CBAM solely because its volume or value is limited. The distinction remains relevant while changes to the electricity methodology are under discussion. The applicable approach depends on how electricity imports are treated under the CBAM rules in force.
The European Commission issued guidance for the definitive period on August 14, 2026, covering electricity, iron and steel, aluminium and other sectors. It later updated its general questions and answers on October 15, 2026. These materials sit alongside the rules currently applicable to imports. They form part of the reference set for implementation during the definitive phase.
Commission proposal COM(2025) 989 on electricity methodology
Under COM(2025) 989, the European Commission proposed changes to how embedded emissions are attributed to electricity. The measures would broaden how PPAs involving intermediaries are treated. They would also remove the current network condition referenced in Annex IV point 5(b). The proposal includes revisions to the nomination test.
The Commission’s proposal is intended to encourage decarbonisation in third-country electricity systems. It is politically advanced but not yet final law. The Council of the EU agreed its position on June 12, 2026. The European Parliament adopted its first-reading position on September 15, 2026, then returned the file for interinstitutional negotiations.
Scenario planning and contract triggers for PPA structures
Serbian developers and traders are advised to model two scenarios: an operating case under current law and a reform case reflecting potential effects if amended rules apply. A change-in-law clause could allow a PPA to shift into a broader intermediary structure after a clearly defined legal trigger. The trigger should be linked to publication and application of an adopted rule. It should not rely on a political announcement.
This approach is tied to how compliance depends on rules applicable when goods are imported. It also reflects that methodology changes are not yet final at the time of negotiation in Brussels. Data handling and contract design therefore need to account for both current requirements and potential amendments. The focus remains on ensuring that import-time obligations are met under whichever framework applies.
Downstream CBAM expansion affecting steel and aluminium supply chains
The European Commission has proposed expanding CBAM coverage by adding 180 steel- and aluminium-intensive downstream products from 2028. The Council’s position increased the proposed list to around 200 products. The European Parliament supported a substantially broader list of 457. Final scope remains under negotiation.
The proposed expansion would extend beyond basic materials into industrial supply chains. Serbia’s trade links with the EU make the potential scope relevant for its industry planning. Serbian goods exports were 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.
Records, historical data, and project finance under current rules
Historical evidence should remain tied to the legislation applicable when electricity was imported. Reconstructing or rewriting past data using a later methodology could increase audit risks rather than resolve an original compliance issue. Data systems should remain flexible enough to accommodate changes in electricity methodology while still supporting compliance with current rules. This separation between import-time rules and later updates is central to recordkeeping.
The same distinction applies to project finance decisions. Investors should not capitalise a higher expected export premium solely based on an assumption that qualification will become easier under the Commission’s proposal. Banks are expected to assess whether a project remains financially viable under rules now in force. Possible reform is treated as optional upside until final legal text, application date and implementing requirements are established.
For Serbian exporters, maintaining current compliance is presented as a practical approach alongside contractual mechanisms that can adjust over time. Long-term contracts can include appropriate conversion mechanisms rather than waiting for Brussels negotiations to conclude. Regulatory flexibility can create commercial value, but assuming a future benefit before it takes legal effect creates financial risk. This reflects how timing of legal application affects compliance outcomes.