Different default emissions factors are producing increasingly divergent economics for electricity traded within the same interconnected Western Balkan power system.
At the Q3 CBAM certificate price, the indicative carbon cost ranges from €0/MWh in Albania to approximately €94.50/MWh in Bosnia and Herzegovina:
- Albania: €0/MWh
- North Macedonia: about €73.02/MWh
- Montenegro: about €80.59/MWh
- Serbia: about €85.70/MWh
- Bosnia and Herzegovina: about €94.50/MWh
This creates a carbon-cost differential of almost €95/MWh between electricity originating in Albania and Bosnia and Herzegovina.
Carbon Costs Are Reshaping Trade Routes
Such a difference can outweigh conventional wholesale electricity price spreads and make previously viable transmission arbitrage commercially unattractive.
The Energy Community reported that total commercial electricity exchanges between the Western Balkans and the EU fell sharply after CBAM entered into force, while trading patterns shifted towards routes associated with lower or zero default carbon costs.
At the same time, the Energy Community has identified practical difficulties for renewable generators seeking to demonstrate eligibility for actual emissions values, limiting their ability to avoid national default factors even where the underlying generation has substantially lower emissions.
The result is a growing risk that CBAM could fragment regional electricity trading along carbon-cost lines, potentially reshaping commercial flows before planned EU electricity-market coupling has fully integrated the region.
