EU CBAM Reform Could Ease Compliance for Serbian Renewable Electricity Exports

Serbian renewable electricity exporters could gain a simpler route for demonstrating actual emissions under the EU Carbon Border Adjustment Mechanism (CBAM) if proposed changes to electricity rules become law. The European Parliament adopted its negotiating position on a broader CBAM revision on Sept. 15 by 464 votes to 50, with 159 abstentions, opening negotiations with EU member states on the final legislation.

For Serbia’s electricity sector, the most significant proposals concern the methodology for electricity imported into the EU as a CBAM good. The proposed framework would remove the requirement to demonstrate that physical network congestion was absent along the route to the EU. It would also provide greater flexibility for physical power purchase agreements involving traders and other intermediaries, adapt nomination requirements to markets using implicit capacity allocation and market coupling, and revise the calculation of country electricity default values.

The changes are not yet binding law. For electricity exported during 2026, Serbian generators, traders and their EU counterparties must continue preparing evidence under the existing methodology while adapting systems for a potentially revised framework.

Physical congestion requirement could be removed

Under the current electricity methodology, exporters seeking to use actual embedded emissions rather than a national default factor must meet several conditions simultaneously. Electricity must be connected to a qualifying physical PPA, the generating installation must remain below the applicable emissions threshold, production and firm nomination must correspond within the required hourly period, and the exporter must satisfy the network condition.

For Serbian renewable projects, demonstrating the network condition retrospectively can be particularly difficult. Generators can maintain production meters, SCADA records and plant documentation, while traders and balance-responsible parties can retain nominations, cross-border capacity and settlement records. EU importers can document customs entries and their CBAM declarant information.

However, proving hour by hour that physical congestion did not prevent the claimed route to the EU can depend on information held by transmission-system operators and market infrastructure. The proposed reform would remove that condition if it remains in the final legislation. Verification would instead focus more directly on the connection between the identified generator, contract, hourly production, trading route, EU allocation and final CBAM declaration.

Proposed rules would accommodate intermediary trading structures

Serbian renewable electricity exports can involve several parties rather than a direct bilateral transaction between a generator and an EU importer. A typical structure can include a Serbian renewable producer, supplier or trader, balance-responsible party, cross-border market, EU trader or importer and authorised CBAM declarant. The current methodology can make such intermediary arrangements difficult to accommodate within the actual-emissions framework. Under the proposed changes, intermediaries could participate in the PPA chain if a verifiable contractual relationship connects the producer, intermediary or intermediaries and the EU importer or authorised CBAM declarant.

This would more closely reflect electricity trading structures in Southeast Europe, where suppliers and trading companies aggregate generation, manage balancing exposure and secure cross-border positions for producers. The additional flexibility would not remove traceability requirements. Verifiers would still need to establish that electricity claimed by a particular EU declarant can be traced to the identified Serbian generating installation and relevant period without double counting.

Hourly records remain central to emissions claims

The proposed framework would continue to require a detailed evidence chain for actual-emissions claims. For Serbian renewable generators, the documentation would need to connect the installation, meter, production hour, PPA, trader allocation, cross-border transaction, EU importer or declarant and verified quantity. Nomination records would remain relevant where explicit cross-border capacity is used. For electricity traded through markets operating with implicit allocation and market coupling, the revised methodology is expected to recognise that traditional bilateral nominations do not fully describe how those markets function.

That distinction could become increasingly relevant as Serbian and regional electricity markets deepen integration with EU day-ahead and intraday market coupling. CBAM evidence systems would therefore need to accommodate both explicit capacity allocation and implicit market coupling, while retaining producer-specific and declarant-specific records.

Guarantees of Origin do not replace CBAM evidence

The proposed changes do not make Guarantees of Origin (GOs) sufficient evidence for CBAM purposes. A GO establishes the renewable attribute associated with electricity, whereas an actual-emissions claim requires an evidence chain connecting the emissions value with the generating installation and the electricity allocated to the EU declarant.

For Serbian renewable generators, this makes documentation around each green MWh increasingly important. A verifier-ready package can include plant identification, meter hierarchy, hourly generation, PPA documentation, trading allocation, nomination records, EU declarant information and emissions data ultimately accepted by an accredited verifier.

CBAM requirements could move into power contracts

The statutory responsibility for the CBAM declaration remains with the EU authorised CBAM declarant, although much of the supporting information originates outside the EU. EU importers and traders will therefore need contractual access to information held by Serbian generators, suppliers and trading counterparties.

CBAM provisions could consequently become part of electricity PPAs and trading agreements, alongside existing terms covering price, delivery, balancing, credit and settlement. EU buyers may require Serbian counterparties to provide installation identification, meter and generation records, Monitoring Plan information, verified emissions data, hourly allocation records, PPA evidence, trading and nomination documentation, cross-border route information and cooperation with an accredited EU verifier. The compliance responsibility remains with the authorised declarant, but the supporting data requirements extend upstream through the electricity supply chain.

Revised default factors could affect Serbian electricity

The proposed legislation would also alter the methodology used to calculate electricity default values. Rather than relying on a factor focused on fossil generation, the revised approach would use an average grid emissions factor reflecting the broader electricity mix, including renewable generation.

For Serbia, that could affect electricity for which an exporter cannot satisfy all requirements for using actual emissions. The framework would consequently provide two potential pathways: electricity subject to the applicable Serbian default factor, and electricity associated with a specific renewable installation for which sufficient evidence supports a lower verified actual-emissions value. The difference between those values could become relevant to electricity pricing, PPA negotiations and trader margins.

Verification preparations begin ahead of definitive reporting

The proposed legislative changes are being negotiated as the EU’s CBAM verification framework moves toward operation. Accredited CBAM verifiers are entering the Registry system from September 2026, while installation reviews, Monitoring Plan assessments, evidence testing and site visits are expected ahead of the first definitive-period verification reports in 2027. For Serbian exporters, the evidence required for verification is generated continuously through meter readings, nominations, allocations and contracts. Records that are missing later may be difficult or impossible to reconstruct.

A pre-verification process during the reporting year can therefore test whether the evidence chain is capable of meeting an EU verifier’s requirements before the final assurance engagement. The proposed EU changes could remove the physical-congestion requirement, accommodate intermediary PPA structures and adjust nomination rules for market coupling, but traceability would remain central to actual-emissions treatment. For Serbian renewable electricity, the relevant evidence must continue to establish where and when the power was generated, the contractual chain through which it was delivered, the EU declarant receiving the allocation and the evidence accepted by the accredited verifier.

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