Serbian electricity exporters and power traders are facing a regulatory dilemma in late 2026: the EU Carbon Border Adjustment Mechanism (CBAM) is already binding, while proposed reforms that could change how electricity exports from Serbia are handled are still under negotiation. This creates a compliance timing challenge for developers, exporters and investors, who must follow the rules in force without pricing in benefits that have not yet become law.
CBAM moved into its definitive phase on January 1, 2026. On August 14, the European Commission issued guidance for the definitive period covering electricity, iron and steel, aluminium and other sectors included in the mechanism’s scope. The Commission then updated its general questions and answers on October 15.
For Serbian market participants, the key point is that compliance should align with the rules applicable at the time the goods or electricity are imported, rather than with anticipated outcomes from ongoing legislative talks. electricity exporters are therefore expected to plan around the currently applicable framework.
Electricity transactions still fall under current CBAM requirements
The difference between current obligations and potential reform is especially relevant for electricity. The 50-tonne de minimis threshold introduced for cement, iron and steel, aluminium and fertilisers does not cover electricity or hydrogen.
As a result, EU importers of Serbian electricity cannot rely on a volume-based assumption that a shipment falls outside CBAM coverage. At the same time, the European Commission has proposed changes to the electricity methodology through COM(2025) 989.
The proposal would broaden the treatment of power purchase agreements involving intermediaries, remove the existing network condition under Annex IV, point 5(b), and revise the nomination test. It would also encourage decarbonisation in third-country electricity systems by adjusting how embedded emissions are attributed.
Even if adopted, the proposed framework cannot replace the existing rules until the legislative process is completed and the relevant provisions become applicable. Until then, Serbian exporters need to demonstrate eligibility for a specific emissions methodology using the rules that apply to imports under the definitive CBAM framework.
EU legislative progress splits planning into two scenarios
The electricity methodology reform has progressed politically, but it has not yet become final legislation. The Council agreed its position on June 12, 2026, while the European Parliament adopted its first-reading position on September 15 and returned the file for interinstitutional negotiations.
Given this status, Serbian developers, traders and electricity exporters should keep two regulatory tracks in parallel: a current-law operating case based on requirements already applicable, and a reform scenario reflecting consequences once the proposed changes are formally adopted and take effect.
This approach should also be reflected in contractual arrangements. Long-term power purchase agreements can include change-in-law provisions enabling transition to a broader intermediary model after a clearly defined legal trigger tied to the publication and applicability of an adopted rule, rather than a political announcement or preliminary agreement.
Historical records must remain consistent with the legal framework that applied when the electricity was imported. Reconstructing or modifying earlier data solely to match a methodology amended after the fact could create additional audit and compliance risks rather than resolving the original uncertainty.
Project finance should not assume reforms that are not yet enacted
The same timing principle applies to renewable-energy project finance. Investors should not capitalise a higher expected export premium merely because proposed CBAM reforms could make qualification easier in the future.
Banks should first test whether a project remains commercially viable under the current regulatory framework. Any extra revenue connected to a potentially more favourable methodology should be handled as conditional upside until the final legal text, application date and relevant implementing details are available.
This approach is particularly important where debt-service capacity depends on export premiums tied to installation-specific emissions treatment. If a transaction cannot satisfy the current requirements, a future regulatory improvement could present an opportunity, but it should not be treated as guaranteed income in a base-case financial model.
For Serbian developers and trading companies, maintaining flexibility in contracts and operational systems can reduce adaptation costs to regulatory changes without forcing reliance on uncertain future revenue.
CBAM expansion may extend into Serbian industrial supply chains
Electricity methodology is not the only pending issue affecting Serbian exporters. The European Commission has proposed extending CBAM from 2028 to cover 180 downstream products with significant steel or aluminium content.
The Council expanded the proposed list to approximately 200 products, while the European Parliament supported a substantially broader list of 457. The final scope remains subject to negotiations, but the policy direction is described as moving further into industrial supply chains rather than remaining concentrated mainly on basic materials.
For Serbian manufacturers, this could create new compliance considerations even if their finished products are not currently in scope. Companies using steel and aluminium inputs in products destined for the EU should begin identifying relevant materials, suppliers and data requirements rather than waiting for the final list to be confirmed.
Early preparation would support exporters in assessing potential exposure, improving traceability across supply chains and incorporating future compliance costs into pricing and investment decisions.
Serbia’s EU trade links raise the significance of CBAM changes
The potential expansion of CBAM is especially relevant for Serbia because of its strong trade relationship with the European Union. In January–August 2026, Serbian goods exports reached approximately EUR 23.7 billion, up 8.8% year on year, while EU member states accounted for 58.3% of Serbia’s total external trade.
These figures highlight how EU regulatory developments can matter for Serbian businesses. Even companies outside the current CBAM product scope may face indirect exposure through steel and aluminium inputs, European customer requirements, or changes in supply-chain documentation.
Exporters should map where covered materials enter production processes, identify suppliers able to provide required information and assess how potential scope changes could influence margins and contractual responsibilities.
Compliance now and readiness for the reform timeline
For Serbian electricity exporters, traders and industrial manufacturers, the practical response described is not to wait for Brussels to finish the legislative process. Businesses should maintain compliance with current requirements, develop adaptable data systems and include clearly defined regulatory-transition provisions in long-term contracts.
Electricity market participants are expected to preserve the evidence required under the rules currently in force while designing contractual and operational arrangements able to accommodate a revised methodology. Industrial exporters should strengthen supply-chain traceability and assess exposure to the proposed expansion of downstream product coverage.
The distinction between preparation and assumption is described as fundamental. Regulatory flexibility can create commercial value, but pricing an expected benefit before it is enacted can turn legislative uncertainty into a financial liability.
For Serbia, the approach presented is to comply with the present framework while remaining ready to benefit from future reforms once their legal status and practical requirements become clear. Supported by CBAM.Clarion.Engineer