Serbian exporters and electricity traders are facing a regulatory paradox in late 2026: the current EU Carbon Border Adjustment Mechanism (CBAM) rules are already binding, while several proposed changes that could make Serbian electricity exports easier are still being negotiated in Brussels.
CBAM entered its definitive phase on January 1, 2026. The European Commission published guidance for the definitive period covering electricity, iron and steel, aluminium and other sectors on August 14, followed by an update to its general questions and answers on October 15.
For Serbian market participants, the key principle is that compliance must follow the rules applicable at the time of import, rather than the version of the framework that companies expect to emerge from ongoing negotiations.
This distinction is particularly important for electricity. The 50-tonne de minimis threshold introduced for cement, iron and steel, aluminium and fertilisers does not apply to electricity or hydrogen. An EU importer purchasing Serbian electricity therefore cannot assume that a relatively small transaction falls outside CBAM simply because its volume or value is limited.
At the same time, the European Commission has proposed significant changes to the electricity methodology under COM(2025) 989. The proposal would, among other measures, broaden the treatment of PPAs involving intermediaries, remove the current network condition in Annex IV point 5(b), and revise the nomination test.
The proposed changes also aim to encourage decarbonisation in third-country electricity systems by modifying the methodology used to attribute embedded emissions.
However, the proposal is politically advanced but not yet final law. 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.
For Serbian developers and traders, this means that two separate scenarios should be modelled: a current-law operating case and a reform case showing the potential impact once, and if, the amended rules become applicable.
Contracts should reflect the same distinction. A change-in-law clause could allow a PPA to transition to a broader intermediary structure following a clearly defined legal trigger. That trigger, however, should be based on the publication and application of an adopted rule rather than a political announcement.
Historical evidence should remain linked to the legislation applicable when the electricity was imported. Reconstructing or rewriting historical data under a later methodology could create additional audit risks rather than resolving the underlying compliance issue.
The same principle applies to project finance. Investors should not capitalise a higher expected export premium solely on the assumption that the Commission’s proposal will eventually make qualification easier.
Banks are likely to focus on whether a project remains financially viable under the rules currently in force, while treating potential regulatory reform as optional upside until the final legal text, application date and implementing requirements are established.
For Serbian industry, another important issue is the potential expansion of CBAM further down industrial supply chains. The European Commission has proposed adding 180 steel- and aluminium-intensive downstream products from 2028. The Council’s position expanded the proposed list to around 200 products, while the European Parliament supported a significantly broader list of 457 products.
Although the final scope remains under negotiation, the direction of policy is clear: CBAM is moving deeper into industrial supply chains, rather than remaining focused primarily on basic materials.
This is particularly relevant for Serbia because of its strong trade links with the European Union. In January-August 2026, Serbian goods exports reached approximately EUR 23.7 billion, an increase of 8.8% year on year, while EU member states accounted for 58.3% of Serbia’s total external trade.
As a result, even companies whose products are not currently covered by CBAM should begin mapping where steel and aluminium inputs enter products ultimately sold into the EU market.
The practical strategy for Serbian exporters is therefore not to wait for the final outcome of negotiations in Brussels. Companies should maintain compliance with current rules, build flexible data systems that can accommodate changes to the electricity methodology, and include appropriate conversion mechanisms in long-term contracts.
Regulatory flexibility can create commercial value, but assuming a future benefit before it becomes legally effective represents a financial risk.
Supported by CBAM.Clarion.Engineer