The value of Serbian exports subject to the European Union’s Carbon Border Adjustment Mechanism (CBAM) could increase to between €4.3 billion and €5.3 billion if the mechanism is extended to selected manufactured products, according to estimates by CBAM.Clarion.Engineer. Based on Serbia’s 2025 export structure, the expansion would raise the share of EU imports from Serbia covered by CBAM reporting and carbon-cost allocation to approximately 20–25%, compared with €2.21 billion of trade covered under the current framework in 2024.
The proposed expansion would significantly broaden Serbia’s exposure beyond the existing CBAM sectors, reflecting the country’s strong export orientation toward manufactured industrial goods integrated into European supply chains.
EU Prepares Downstream Expansion of CBAM
The next phase of the Carbon Border Adjustment Mechanism is intended to extend carbon pricing further along the industrial value chain. In addition to the current coverage of electricity, iron and steel, aluminium, cement, fertilisers and hydrogen, the proposed scope would include selected machinery, electrical equipment, vehicle components, metal furniture, prefabricated buildings and other manufactured products whose value is largely derived from steel or aluminium.
For Serbia, the proposed changes would represent a broader structural challenge than the existing mechanism. Manufactured goods—including electrical equipment, machinery, automotive components and other metal-intensive industrial products—account for a substantially larger share of exports to the European Union than the sectors covered under the initial CBAM framework. These industries are closely integrated into European corporate manufacturing networks, increasing their exposure to future carbon-related reporting and cost-allocation requirements.
Legislative Process Continues
The downstream expansion has not yet been adopted as final European Union legislation. The Council of the European Union adopted its negotiating position on 12 June 2026. The European Parliament’s responsible committee approved its report on 6 July 2026 and submitted it for plenary consideration on 9 July 2026. An indicative first-reading vote is scheduled for 14 September 2026. Under the Council’s negotiating position, the expanded product scope would begin applying from 1 January 2028. The final list of Combined Nomenclature (CN) product codes covered by the mechanism remains subject to negotiations between the European Union institutions.
Elevated by CBAM.Clarion.Engineer
