The Carbon Border Adjustment Mechanism (CBAM) is adding export-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 project may be able to generate and deliver electricity but still struggle to qualify for actual-emissions treatment under the applicable EU methodology.
The Energy Community Secretariat identified difficulties with verification, power purchase agreement eligibility and access to favourable EU prices in its Q2 2026 assessment. The assessment indicates that carbon compliance can affect bankability even for projects using technologies with very low direct emissions.
Cross-border electricity sales have 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 provide generators with revenue beyond domestic sales, but default emissions treatment may change the economics of importing their power into the EU.
Export treatment affects project returns
Financing assessments may need to compare three revenue cases: domestic electricity sales, cross-border sales under default emissions treatment, and exports meeting the requirements for actual-emissions treatment. Domestic sales do not give rise to export-related CBAM obligations.
Cross-border sales under default treatment carry associated cost exposure that may affect the export price a generator can achieve. An export structure that meets actual-emissions requirements may preserve a stronger commercial relationship with EU buyers.
The differences between these cases can affect electricity-price assumptions, operating cash flow, debt-service capacity and project valuation. The exposure applies to operational projects and assets under development, so it is relevant to financing decisions before as well as after a plant begins exporting.
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 ultimately reaches the project company. Contract terms therefore influence the revenue available to the project, not just the agreed electricity price.
Banks and investment funds need to assess whether an assumed export route is commercially realistic, whether nominated electricity can be linked to eligible generating assets, and whether counterparties can provide the required regulatory evidence. The availability of accredited verification services and the technical capability of metering and scheduling systems also matter to financing assessments.
Contracts and evidence underpin export plans
Export-oriented power purchase agreements increasingly need clear provisions on 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.
Without clear allocation of those responsibilities, generators, electricity traders and EU importers could dispute costs after commercial delivery has taken place. The issue concerns the arrangements among all three parties, including who is responsible for supporting the export’s emissions treatment.
Access to European wholesale prices is relevant to renewable projects using regional cross-border links. Montenegro’s connection with Italy and Serbia’s interconnections with Hungary, Romania and Croatia are relevant routes for projects seeking those prices, but the connections alone do not establish eligibility for actual-emissions treatment.
CBAM readiness enters lender assessments
Developers that address CBAM requirements during project preparation may be better positioned to negotiate export agreements and demonstrate revenue resilience to lenders. Projects relying 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, as well as implementing rules for actual-emissions evidence, are cited as research references for the issue. The applicable methodology and evidence requirements therefore remain central to the treatment of export revenues.
