May 21, 2026
by in News

Electricity Production and Exports Rise Sharply in Albania in Q1 2026

Electricity production and exports increased significantly in the first quarter of 2026, while imports fell by more than half, according to data published by INSTAT on the country’s electricity balance.

Net domestic electricity production reached 3,647 GWh in the first three months of the year, compared with 2,234 GWh in the same period a year earlier, marking an increase of 63.2%. The growth was driven mainly by public hydropower plants, as well as private and concessionary hydropower producers, which together accounted for more than 93% of domestic production. Other producers, mainly photovoltaic plants, represented around 7% of total generation.

Gross electricity exports, including exchanges, rose to 1,503 GWh, up from 732 GWh in the first quarter of 2025, representing a year-on-year increase of 105.4%. At the same time, gross imports fell to 327 GWh, from 767 GWh, reflecting a decline of 57.4%.

As a result, the electricity exchange balance was positive at 1,177 GWh, while domestic production covered most of the country’s demand.

Public hydropower plants generated 1,667 GWh during the period, up 63% compared with the same quarter of the previous year. Production from private and concessionary hydropower plants reached 1,726 GWh, an annual increase of 66.8%. Meanwhile, other electricity producers, including photovoltaic plants, generated 254 GWh in the first quarter, compared with 176 GWh a year earlier, recording growth of 44%.

Electricity available for consumption increased by 8.9% compared with the first quarter of 2025, while final consumption reached 1,954 GWh, up 9.1% year-on-year.

Household electricity consumption increased by 8.8%, while consumption by businesses and other non-household consumers expanded by 9.5%. INSTAT also reported that network losses reached 516 GWh, or 8% higher than a year earlier. However, the share of losses in relation to electricity available for consumption declined slightly to 20.9%, from 21.1% in the first quarter of 2025.

Transmission losses increased by 31.9%, while distribution losses rose by 5.1%, according to official data.

TAB. 1 Electricity Energy Balance
MWh
Indicators Q1 2025 Q1 2026
A Available energy (A=1+2-3) 2.269.259 2.470.192
1 Domestic net production (1=1.1+1.2+1.3) 2.233.905 3.646.805
1.1 Thermal power plants 0 0
1.2 Hydropower plants (1.2=a+b) 2.057.523 3.392.739
a Public (a=a.1-a.2) 1.022.784 1.666.663
a.1 Gross production of public hydropower plants 1.032.261 1.679.355
a.2 Losses and own consumption 9.477 12.693
b Independent private and concessionary producers 1.034.740 1.726.076
1.3 Other producers — other renewable energy sources 176.381 254.066
2 Gross imports — energy received 767.187 326.815
3 Gross exports — energy delivered 731.833 1.503.429
B Electricity consumption (B=1+2) 2.269.259 2.470.192
1 Network losses (1.1+1.2) 477.816 515.817
1.1 Losses and own consumption in transmission 51.088 67.361
1.2 Distribution losses (1.2=a+b)1 426.728 448.456
a Technical losses in distribution 312.071 336.635
b Non-technical losses in distribution2 114.657 111.821
2 Use by consumers (2=2.1+2.2) 1.791.443 1.954.375
2.1 Household consumers 1.064.956 1.158.522
2.2 Non-household consumers 726.487 795.853
1 The breakdown of technical and non-technical losses consists of estimates carried out by operators active in the electricity sector.
2 Non-technical losses also include statistical differences arising from non-declarations of production and changes resulting from the timing of production measurement, which is shifted in relation to sales or consumption data.
⚡ Albania Electricity Balance · Q1 2026

Electricity Production and Exports Surge in Q1 2026

Official INSTAT data show that Albania’s electricity available for consumption increased by 8.9% year-on-year, supported by a strong rise in domestic generation and a sharp increase in exports.

⚡
Energy available 2,470 GWh ▲ +8.9% vs Q1 2025
🏭
Net domestic production 3,647 GWh ▲ +63.2% vs Q1 2025
🔌
Gross exports 1,503 GWh ▲ +105.4% vs Q1 2025
⬇️
Gross imports 327 GWh ▼ -57.4% vs Q1 2025

Q1 2025 vs Q1 2026: Electricity Balance

Indicator Q1 2025 Q1 2026 Change
April 30, 2026
by in News

Albania’s Hydropower Surge Strengthens Its Position in Regional and EU Energy Markets

The first three months of 2026 marked a substantial increase in electricity generation in Albania, driven primarily by a sharp rise in hydropower output. Production from hydropower plants was 70% higher in January–March 2026 compared to the same period a year earlier.

According to data published in the report of the Energy Community on the Carbon Border Adjustment Mechanism (CBAM), Albania gained a clear advantage over other regional countries in exporting electricity generated from renewable sources.

Specifically, the first quarterly report on CBAM implementation highlights that Albania’s hydropower generation increased significantly, positioning the country as a far more aggressive net exporter of electricity to both the regional market and the European Union.

“Hydropower production in Albania increased by 1.34 TWh (+70%) in the first quarter of 2026 compared to the same period in 2025, rising from 1.93 TWh to 3.27 TWh,” the report states. This growth was concentrated in January and February, with increases of +72% and +84% respectively, reflecting exceptionally favorable hydrological conditions.

This surplus translated directly into higher exports. Albania increased scheduled electricity exports by approximately 4,100 MWh per day to Greece, 3,700 MWh per day to Kosovo, and 2,000 MWh per day to Montenegro.

The report estimates that “these shifts in trade flows represent a net movement of approximately 1.2 TWh of Albanian electricity exported in the first quarter of 2026,” a volume that closely matches the incremental increase in hydropower generation.

The economic impact is further amplified by how CBAM treats Albanian electricity. Unlike Serbia, Bosnia and Herzegovina, or Montenegro, Albania benefits from a zero emissions factor. This means its electricity exports to the European Union are not subject to additional carbon costs.

“Electricity imported into the European Union from Albania was not financially affected by CBAM,” the report notes, adding that this “created a commercial incentive to import Albanian electricity into EU markets.”

Such dynamics position Albania as a preferential energy corridor դեպի the European market, particularly through Greece and onward to Italy. The report observes that exports from Albania to Greece intensified, with Albanian electricity—combined with strong Greek domestic production—subsequently redirected toward Bulgaria and Italy.

The Energy Community further warns that hydropower-dominated systems like Albania’s “appear to be in a structurally more competitive position,” suggesting that CBAM is already creating long-term winners and losers in the region. In contrast, countries with higher coal-based generation face substantial financial penalties.

For example, Montenegro pays approximately €73.8 per MWh of electricity exported to the European Union, while Albania pays zero. “The contrast between Albania and Montenegro illustrates how country-level emission factors shape cross-border electricity trade,” the report concludes, placing Albania firmly on the side of Europe’s evolving energy transition.

March 27, 2026
by in News

Fuel Importers Warn of Supply Disruptions as Government Price Caps Fall Below Cost in Albania

Following yesterday’s decision by the Transparency Board, which set retail fuel prices in the country at 203 lek per liter for diesel and 175 lek per liter for gasoline, down from 214 and 199 lek respectively, and wholesale prices at 191 and 163 lek per liter, major fuel importers have responded.

They have warned the Ministry of Finance and Economy and the Ministry of Infrastructure and Energy that, in order to avoid selling below cost and suffering very large losses, they are forced to take temporary measures, specifically:

  • Suspending and limiting wholesale sales of diesel and gasoline;
  • Slowing down and restricting the customs clearance process for fuel in Porto Romano until further notice.

Monitor is in possession of at least two letters that the importing companies sent today to the Ministry of Finance and Economy and the Ministry of Infrastructure and Energy.

The importers justify this decision by arguing that the retail prices set by the Transparency Board are below cost.

In the letter, they explain that following the latest publication of prices by the Transparency Board on March 26, 2026, which set the ceiling wholesale price for diesel at 191 lek/liter and for gasoline at a maximum of 163 lek/liter, they wish to inform the authorities of the significant issues related to the method used to calculate these prices.

According to the importers, the calculation is based on the formula used in 2022, which does not reflect current market conditions and, in particular, the contracts currently in force with our suppliers. As a result, the prices set do not reflect the actual costs that currently determine the price of one liter of diesel and gasoline for wholesale trade.

Market close on March 26, 2026:

Diesel = $1,402.5/ton, up by $134.75/ton
Gasoline = $1,037.25/ton, up by $49.25/ton

Based on the current premiums we have:

Diesel = CIF + $55/ton
Gasoline = CIF + $75/ton

Today’s costs are:

Diesel = 206.2 lek/liter
Gasoline = 169.7 lek/liter

With a gross margin of 3 lek/liter, today’s wholesale selling prices should be:

Diesel = 209.2 lek/liter
Gasoline = 172.7 lek/liter

Therefore, there is a very large gap between the prices that should apply today and the selling prices set by the Transparency Board. Specifically, diesel is 18.2 lek/liter higher, while gasoline is 9.7 lek/liter higher, the importers state in the letter obtained by Monitor.

In their letters, the importers have requested that the “Transparency Board for the temporary limitation of wholesale/retail prices of petroleum subproducts and gas” be convened as soon as possible to approve new selling prices for gasoil and gasoline.

They also call for a revision of the calculation methodology, so that the price is applied under CIF Med conditions, with the premium for gasoil calculated at +$50/ton and for gasoline at +$75/ton.

2- Gross margins should be calculated as follows: for gasoil, +3.5/liter wholesale and +15/liter retail; for gasoline, +4.5/liter wholesale and +16/liter retail.

Retail prices were reduced today

Earlier today, following the Transparency Board’s decision, retail diesel prices at fuel stations fell by 11 lek per liter. From 214 lek per liter, diesel is now being sold at 203 lek per liter. A price drop was also recorded for gasoline: from 199 lek per liter previously, the price today has fallen to 175 lek per liter.

Earlier, importers had warned that if prices were reduced to cost, they would suspend supply, since the government cannot pass on all the costs of the war to them. “Cost cannot be what is determined by a board, but what is actual, proven by contract, supplier invoice, and therefore by the value of the transaction, and this value is used as a reference by customs for VAT purposes. No board or entity has the legitimacy to order a business to sell below cost,” said Luigj Aliaj of the Association of Hydrocarbon Companies.

In Albania, fuel prices are 30–40% higher than in neighboring countries, but according to importers this is explained by the heavy tax burden applied to fuel prices. In total, an Albanian currently pays 1.16 euros in taxes per liter of diesel, or 53% of the final price; a Macedonian citizen pays 0.58 euros per liter, or 36% of the final price; a Montenegrin pays 0.55 euros, or 35%; and a citizen of Kosovo pays 0.67 euros, or 38.5% of the final price. Importers also say that the 20% excise tax reduction, which was expected to lower diesel prices by 8–10 lek per liter, has not yet entered into force.

This has led many vehicle users to refuel in neighboring countries, spending up to 1 million euros per day.

March 11, 2026
by in News

Albania Ranks Highest in Europe for Fuel Costs Relative to Purchasing Power, Doubling Regional Averages

Albania currently has the most expensive automotive fuel in Europe when adjusted for purchasing power and citizen income, imposing a disproportionate economic burden on consumers and businesses alike.

An analysis conducted utilizing 2026 per capita income data from the International Monetary Fund’s (IMF) Global Economic Outlook and current spot prices from Global Petrol Price, reveals a stark disparity between Albanian fuel costs and domestic earning power.

According to the IMF, Albania’s average per capita income for 2026 is projected at $12,000 annually, equating to roughly $33 per day. With domestic retail diesel prices currently hovering around 200 Albanian Lek (ALL) per liter approximately $2.40 at the current exchange rate an average Albanian citizen must allocate a staggering 7.2% of their daily income to purchase a single liter of diesel.

A Stark Regional and European Divide

Data indicates that this 7.2% threshold is the highest financial burden for fuel among all analyzed European nations. When compared to neighboring Balkan states, the economic strain on Albanian consumers is at least twice as high.

For context, purchasing one liter of fuel requires:

  • 3.7% of daily income in Serbia

  • 3.6% in Montenegro

  • 2.8% in Romania

  • 2.5% in Greece (which, despite having one of Europe’s most expensive nominal fuel markets, presents a much lower relative burden due to higher median incomes).

In absolute nominal terms, regional neighbors boast fuel prices averaging 15% to 30% lower than Albania, particularly in Kosovo and North Macedonia.

The contrast is even more pronounced when benchmarked against advanced European economies. In nations like Italy, France, Germany, and Belgium, a liter of fuel typically consumes less than 2% of daily income. Notably, the Netherlands which holds the highest absolute nominal fuel price in Europe requires its citizens to spend only 1.1% of their daily income per liter. This means the relative burden on a Dutch consumer is nearly seven times lower than that of an Albanian.

Even stripping away purchasing power parity, Albania ranks fifth outright in Europe for the highest nominal fuel prices, trailing only the Netherlands, Denmark, Norway, and Switzerland countries where fuel is marginally more expensive by just 10 to 30 cents per liter.

Heavy Taxation and “Rocket and Feather” Pricing Dynamics

Because fuel is a foundational component of transport and logistics, this skewed cost-to-income ratio actively drives up broader commodity prices and exacerbates household expenses. Industry analysts point to two primary domestic drivers for this inflated market: aggressive taxation and asymmetrical price transmission by market operators.

1. The Tax Burden: State levies account for an estimated 60% of the final retail price at the pump. The taxation structure per liter includes:

  • Excise Tax: 37–38 ALL

  • Circulation (Turnover) Tax: 27 ALL

  • Carbon Tax: 3 ALL

  • Value Added Tax (VAT): 20% applied to the final cumulative price.

2. Asymmetrical Market Responses: The Albanian downstream market consistently exhibits the “rocket and feather” effect. Retail prices react rapidly to upward shocks in global crude and refined product benchmarks, yet reductions are passed on to consumers at a noticeably sluggish pace during global downturns.

During periods of falling international prices in 2019 and 2024, fuel importers and distributors capitalized on the lag in price reflection, expanding their profit margins by 0.5 to 1 percentage point. Market operators routinely exploit the delayed localized response to global price drops, structurally padding profit margins at the expense of end-users.

March 5, 2026
by in News

Slovenian Energy Market 2025: Household and Industrial Electricity Prices Record Annual Declines

The Slovenian Ministry of the Environment, Climate and Energy has released its final statistical report for 2025, revealing a general cooling of retail electricity prices across the country. According to the data, which covers the fourth quarter and the full calendar year, households and non-household consumers both benefited from lower year-on-year costs, driven largely by significant adjustments in grid fees and government exemptions.

Household Sector: Grid Fee Relief Offsets Rising Energy Costs

For the average Slovenian household, the retail electricity price in 2025 settled at €95 per MWh, representing a 4% decrease compared to 2024. This downward trend continued into the final months of the year, with Q4 prices dipping an additional 2%.

While the overall retail price fell, the underlying “electricity component”—the cost of the energy itself—actually rose by 7% to an average of €111 per MWh (excluding VAT). The net reduction for consumers was primarily achieved through aggressive cuts to regulated charges:

  • Grid Fees: Averaged €42.1 per MWh (excluding VAT), a substantial 30% reduction from the previous year.

  • Policy Support: Households enjoyed a total exemption from renewable energy (RES) and high-efficiency cogeneration (CHP) fees during the first half of 2025, with partial exemptions remaining in place for the second half. These surcharges averaged just €5.2 per MWh.

  • Excise Duty: Stood at €1.53 per MWh.

By the end of 2025, the cost structure for a typical household invoice consisted of the energy component (56.9%), grid fees (21.6%), VAT (18%), energy taxes (2.7%), and excise duties (0.8%).

Non-Household Sector: Significant Annual Savings Despite Q4 Spike

The broader consumer category, dominated by the business and industrial sectors, saw an even sharper annual decline. The average price for non-household consumers in 2025 was €181 per MWh, a 13% drop over 2024.

However, the sector faced a volatile end to the year; while annual figures were down, prices in the fourth quarter alone actually climbed by 6%.

The ministry highlighted a across-the-board reduction in core cost drivers for businesses:

  • Energy Component: Decreased by 13% to €116.7 per MWh.

  • Regulated Grid Fees: Also fell by 13%, averaging €20.7 per MWh.

  • Fiscal Charges: Energy taxes dropped 14% to €9.5 per MWh, though excise duties saw a marginal increase of 2% to €1.3 per MWh.

For these consumers, the energy component represents the vast majority of the total cost at 78.7%, followed by grid fees at 14%, energy taxes at 6.4%, and excise duties at 0.9% (all figures excluding VAT).

January 9, 2026
by in News

EU’s amendments to CBAM: possibility of relief, but January 1 brought market uncertainty

Long-awaited implementing acts and amendments to the CBAM Regulation brought only a minor relief for the Western Balkans, investors in renewables, and electricity traders. Balkan Green Energy News has analyzed the documents that the European Commission published in December 2025, and the impact of the proposed measures on Energy Community contracting parties – Albania, BiH, Kosovo*, Montenegro, North Macedonia and Serbia.

From January 1, European firms importing aluminum, cement, electricity, iron and steel, hydrogen and fertilizers are obliged to pay a carbon price within the European Union’s Carbon Border Adjustment Mechanism (CBAM).

Last year, the CBAM Regulation was criticized by experts from the Western Balkans (Ljubo Maćić, Zoran Gjorgjievski), European think-tanks (Bruegel), and organizations (Energy Traders Europe). Even the European Network of Transmission System Operators for Electricity (ENTSO-E) requested that the transitional period be prolonged.

They said charging the tax, which started on January 1 as scheduled, would harm countries outside the EU, but also EU member states, market coupling of Western Balkan countries, and electricity trade.

Uncertainty surrounding electricity transit and trade remains high

The analysis showed that the European Commission is proposing changes to the CBAM regulation that would introduce a more favorable method for calculating the national emissions factor and actual emissions values. This benefits non-EU countries that export electricity to the EU, owners of operational renewable energy power plants in these countries, and future green energy investments.

The proposal foresees amendments to the procedure for market coupling, but it is unclear whether these will bring any concrete changes. The commission didn’t propose changes regarding transit, and consequently, electricity trading.

Provided that the proposal is accepted as proposed, it will bring the said positive changes in calculating the national emissions factor and actual emissions values only by the end of the year, meaning that uncertainty in the market will persist until then.

Uncertainty surrounding electricity transit and trade remains high. The impact on the Western Balkans, as well as on the EU member states Bulgaria, Croatia, Greece, Hungary, Romania, and Slovenia, will become clear in the coming weeks and months.

There are two legislative streams

There are two relevant streams currently ongoing in EU legislation for CBAM for electricity. The first are the so-called implementing acts, which are similar to secondary legislation in national law. They further define the technical details of the CBAM regulation.

The other part is the commission’s proposal to amend the CBAM Regulation itself. It will become part of the law when the other co-legislators in the EU – the Council of the EU, which includes the member states, and the European Parliament – together agree on it.

Nobody can say exactly when that process will be finished, but most likely not before the autumn.

National emissions factors, actual emission values: improvement

eu western balkans cbam electricity market coupling amendments
Photo: iStock

There is a proposal to change the way the national emission factors are calculated in the main CBAM Regulation. Currently it only includes the part of the electricity mix based on fossil fuels, regardless of their share in the country’s power generation mix.

For example, for Serbia, a contracting party of the Energy Community, this factor is 1.04. If the national power mix is taken into account, it would go down to 0.7, making the cost of CBAM about 40% lower.

The commission proposed to replace the electricity mix based on fossil fuels, in its accounting system, with one encompassing all energy sources.

The commission also intends to change the requirements for switching to actual emission values

The commission also intends to change the requirements for switching to actual emission values. These are relevant for the producers of renewable energy in non-EU countries. Current conditions are very strict and, to some stakeholders, not achievable.

For example, if a wind farm in the Western Balkans, owned by a domestic or foreign investor, cannot meet these conditions the CBAM payments for the electricity from the facility exported to the neighboring Croatia would be calculated based on the national emissions factor.

The commission suggested that an importer shouldn’t need to have a power purchase agreement (PPA) with a producer directly, which is one of the conditions, but that it could be done through intermediaries. It also proposed the removal of the requirements related to congestion.

These proposals could remove negative impacts on renewable electricity exports and development in non-EU countries, including contracting parties.

Transit: nothing new

The issue of transit hasn’t been addressed in the acts and amendments.

Under the CBAM Regulation, it is unclear how electricity transit costs would be calculated. For example, from Bulgaria to Hungary via Serbia, and who would be required to cover them.

The commission clarified several times that transit isn’t subject to CBAM. However, the physical, practical implementation is the problem.

For example, a trader buys electricity from Greece, transits it through North Macedonia, and puts it on the Serbian SEEPEX power exchange. Somebody else buys it and sells it in Hungary.

It would be very difficult or impossible to say that electricity from Greece was sold into Hungary.

This is why stakeholders take a conservative approach and say that they cannot prove. So, most likely they wouldn’t opt for these countries – non-EU countries, like contracting parties – for transit.

Retroactivity: possibility for improvement

eu western balkans electricity market cbam amendments
Photo: iStock

One of the provisions in the commission’s proposal to amend the CBAM Regulation is that the changes in the electricity sector could apply retroactively, starting from January 2026.

Just as a reminder, EU firms are obliged since the start of this month to pay a CBAM fee for importing designated goods and raw materials and electricity via purchasing so-called CBAM certificates.

Obviously, an importer will try to pass on this cost partly or fully to its counterparts in the third countries. But, importantly, EU firms won’t be able to purchase CBAM certificates yet this year, but only from February 1, 2027.

If the amendment on national emissions factor is adopted, for example in October, this could mean lower CBAM costs for EU importers of electricity from non-EU countries.

Without details on the path forward, market participants lack certainty about the level of CBAM costs

The commission intended to remedy some of the negative impacts on the electricity markets with amendments with retroactive effect. But without details on the path forward, market participants lack certainty about the level of CBAM costs to be paid for 2026.

Based on the current rules, CBAM costs for countries which have lignite in their generation mix could be EUR 70 per MWh to EUR 80 per MWh if the EU ETS price is around 80 EUR per ton of CO2. In some cases, the fee is almost 100% above the electricity price itself.

It is clear that it would rarely make sense to import electricity to the EU from third countries. The price difference, let’s say between Hungary and Serbia, would need to be more than EUR 70 per MWh to EUR 80 per MWh to make the business case.

Market coupling: nothing new or possibility for improvement

eu cbam western balkans electricity market amendments
Photo: Sergio Cerrato – Italia from Pixabay

There are several references to market coupling in the proposal. Energy Community contracting parties are in different phases of market coupling with EU countries.

The commission has proposed signing memoranda of understanding with third countries. It would set out the timeline and conditions for an exemption from CBAM on electricity.

This could be done after the commission approves the so-called verification process of a contracting party’s transposition of the Electricity Integration Package (EIP). It would be a green light for the next stage, which entails the technical tests, leading up to the completion of market coupling.

The current wording in the proposal leaves room for various interpretations

The current wording in the proposal leaves room for various interpretations, one being that the MoU may open the door for an exemption already when the “point of no return” is reached. It is when the contracting party has done all its homework and only the technical tests remain.

However, the commission didn’t propose the other conditions for CBAM exemption to be changed, such as the development of a roadmap on the introduction of a CO2 price that would be equivalent to the level in the EU’s Emissions Trading System (EU ETS).

The question is what the MoU would exactly be about, and if “equivalent” could be defined more precisely.

Why is this important?

No contracting party has yet met the conditions to receive a CBAM exemption in the electricity sector. A critical requirement is to agree to charge an emissions price from 2030 equivalent to the EU ETS.

The CBAM regulation says that the tax cannot technically be implemented on a market which is coupled with the EU internal energy market

If equivalent means the same price, here is the outcome for Serbia, for example: The current CO2 price in the EU is EUR 80 per ton of CO2 equivalent, but is expected to rise to above EUR 100 by 2030, or even reach EUR 150. It would raise prices to consumers by about EUR 75 per MWh and EUR 110, respectively.

The CBAM regulation says that the tax cannot technically be implemented on a market which is coupled with the EU internal energy market. This is why there is a possibility for an exemption for electricity for imports from those countries which are coupled until a technical solution is found how to implement CBAM.

Starting from January 1, any country that is ready to be coupled would in parallel also need to qualify for and receive an exemption from CBAM for electricity. If you fulfil the conditions, you get coupled and get an exemption and CBAM will disappear.

What next?

It could be said that CBAM implementation as of January 1 will certainly affect market integration in the sense that people, businesses would react to market uncertainty.

Trade will be impacted; imports from contracting parties to the EU will be expected to disappear. Of course, contracting parties will continue to import electricity from the EU member states.

The weeks and months ahead will show to what extent the prices and liquidity would be affected in the contracting parties and neighboring EU member states Bulgaria, Croatia, Greece, Hungary, Romania, Slovenia.

For example, Greece would have only the Bulgaria-Romania route to export electricity, and it is already congested. Greece could face curtailments in renewable electricity.

We will also see what the effect on the renewables deployment in contracting parties will be. Are investors going to postpone investments until they see if the changes proposed by the commission are adopted, or are they going to leave for other markets?

Pozsgai: Amendments point in the right direction

Péter Pozsgai, Lead of the EU Carbon Border Adjustment Mechanism Readiness Task Force in the Energy Community Secretariat:

“The European Commission’s proposed amendments point in the right direction, reflecting a consideration of the progress of contracting parties in electricity market coupling, and better outlining the operational details of an exemption via an MoU. The refinement of the rules on national emission factors and the conditions for using actual emission values also demonstrate the intention to minimize the unintended impacts of CBAM on renewable development in contracting parties”.

 

Post Views:115
January 9, 2026
by in News

EU’s amendments to CBAM: possibility of relief, but January 1 brought market uncertainty

Long-awaited implementing acts and amendments to the CBAM Regulation brought only a minor relief for the Western Balkans, investors in renewables, and electricity traders. The documents has been analyzed that the European Commission published in December 2025, and the impact of the proposed measures on Energy Community contracting parties – Albania, BiH, Kosovo*, Montenegro, North Macedonia and Serbia.

From January 1, European firms importing aluminum, cement, electricity, iron and steel, hydrogen and fertilizers are obliged to pay a carbon price within the European Union’s Carbon Border Adjustment Mechanism (CBAM).

Last year, the CBAM Regulation was criticized by experts from the Western Balkans (Ljubo Maćić, Zoran Gjorgjievski), European think-tanks (Bruegel), and organizations (Energy Traders Europe). Even the European Network of Transmission System Operators for Electricity (ENTSO-E) requested that the transitional period be prolonged.

They said charging the tax, which started on January 1 as scheduled, would harm countries outside the EU, but also EU member states, market coupling of Western Balkan countries, and electricity trade.

Uncertainty surrounding electricity transit and trade remains high

The analysis showed that the European Commission is proposing changes to the CBAM regulation that would introduce a more favorable method for calculating the national emissions factor and actual emissions values. This benefits non-EU countries that export electricity to the EU, owners of operational renewable energy power plants in these countries, and future green energy investments.

The proposal foresees amendments to the procedure for market coupling, but it is unclear whether these will bring any concrete changes. The commission didn’t propose changes regarding transit, and consequently, electricity trading.

Provided that the proposal is accepted as proposed, it will bring the said positive changes in calculating the national emissions factor and actual emissions values only by the end of the year, meaning that uncertainty in the market will persist until then.

Uncertainty surrounding electricity transit and trade remains high. The impact on the Western Balkans, as well as on the EU member states Bulgaria, Croatia, Greece, Hungary, Romania, and Slovenia, will become clear in the coming weeks and months.

There are two legislative streams

There are two relevant streams currently ongoing in EU legislation for CBAM for electricity. The first are the so-called implementing acts, which are similar to secondary legislation in national law. They further define the technical details of the CBAM regulation.

The other part is the commission’s proposal to amend the CBAM Regulation itself. It will become part of the law when the other co-legislators in the EU – the Council of the EU, which includes the member states, and the European Parliament – together agree on it.

Nobody can say exactly when that process will be finished, but most likely not before the autumn.

National emissions factors, actual emission values: improvement

eu western balkans cbam electricity market coupling amendments
Photo: iStock

There is a proposal to change the way the national emission factors are calculated in the main CBAM Regulation. Currently it only includes the part of the electricity mix based on fossil fuels, regardless of their share in the country’s power generation mix.

For example, for Serbia, a contracting party of the Energy Community, this factor is 1.04. If the national power mix is taken into account, it would go down to 0.7, making the cost of CBAM about 40% lower.

The commission proposed to replace the electricity mix based on fossil fuels, in its accounting system, with one encompassing all energy sources.

The commission also intends to change the requirements for switching to actual emission values

The commission also intends to change the requirements for switching to actual emission values. These are relevant for the producers of renewable energy in non-EU countries. Current conditions are very strict and, to some stakeholders, not achievable.

For example, if a wind farm in the Western Balkans, owned by a domestic or foreign investor, cannot meet these conditions the CBAM payments for the electricity from the facility exported to the neighboring Croatia would be calculated based on the national emissions factor.

The commission suggested that an importer shouldn’t need to have a power purchase agreement (PPA) with a producer directly, which is one of the conditions, but that it could be done through intermediaries. It also proposed the removal of the requirements related to congestion.

These proposals could remove negative impacts on renewable electricity exports and development in non-EU countries, including contracting parties.

Transit: nothing new

The issue of transit hasn’t been addressed in the acts and amendments.

Under the CBAM Regulation, it is unclear how electricity transit costs would be calculated. For example, from Bulgaria to Hungary via Serbia, and who would be required to cover them.

The commission clarified several times that transit isn’t subject to CBAM. However, the physical, practical implementation is the problem.

For example, a trader buys electricity from Greece, transits it through North Macedonia, and puts it on the Serbian SEEPEX power exchange. Somebody else buys it and sells it in Hungary.

It would be very difficult or impossible to say that electricity from Greece was sold into Hungary.

This is why stakeholders take a conservative approach and say that they cannot prove. So, most likely they wouldn’t opt for these countries – non-EU countries, like contracting parties – for transit.

Retroactivity: possibility for improvement

eu western balkans electricity market cbam amendments
Photo: iStock

One of the provisions in the commission’s proposal to amend the CBAM Regulation is that the changes in the electricity sector could apply retroactively, starting from January 2026.

Just as a reminder, EU firms are obliged since the start of this month to pay a CBAM fee for importing designated goods and raw materials and electricity via purchasing so-called CBAM certificates.

Obviously, an importer will try to pass on this cost partly or fully to its counterparts in the third countries. But, importantly, EU firms won’t be able to purchase CBAM certificates yet this year, but only from February 1, 2027.

If the amendment on national emissions factor is adopted, for example in October, this could mean lower CBAM costs for EU importers of electricity from non-EU countries.

Without details on the path forward, market participants lack certainty about the level of CBAM costs

The commission intended to remedy some of the negative impacts on the electricity markets with amendments with retroactive effect. But without details on the path forward, market participants lack certainty about the level of CBAM costs to be paid for 2026.

Based on the current rules, CBAM costs for countries which have lignite in their generation mix could be EUR 70 per MWh to EUR 80 per MWh if the EU ETS price is around 80 EUR per ton of CO2. In some cases, the fee is almost 100% above the electricity price itself.

It is clear that it would rarely make sense to import electricity to the EU from third countries. The price difference, let’s say between Hungary and Serbia, would need to be more than EUR 70 per MWh to EUR 80 per MWh to make the business case.

Market coupling: nothing new or possibility for improvement

eu cbam western balkans electricity market amendments
Photo: Sergio Cerrato – Italia from Pixabay

There are several references to market coupling in the proposal. Energy Community contracting parties are in different phases of market coupling with EU countries.

The commission has proposed signing memoranda of understanding with third countries. It would set out the timeline and conditions for an exemption from CBAM on electricity.

This could be done after the commission approves the so-called verification process of a contracting party’s transposition of the Electricity Integration Package (EIP). It would be a green light for the next stage, which entails the technical tests, leading up to the completion of market coupling.

The current wording in the proposal leaves room for various interpretations

The current wording in the proposal leaves room for various interpretations, one being that the MoU may open the door for an exemption already when the “point of no return” is reached. It is when the contracting party has done all its homework and only the technical tests remain.

However, the commission didn’t propose the other conditions for CBAM exemption to be changed, such as the development of a roadmap on the introduction of a CO2 price that would be equivalent to the level in the EU’s Emissions Trading System (EU ETS).

The question is what the MoU would exactly be about, and if “equivalent” could be defined more precisely.

Why is this important?

No contracting party has yet met the conditions to receive a CBAM exemption in the electricity sector. A critical requirement is to agree to charge an emissions price from 2030 equivalent to the EU ETS.

The CBAM regulation says that the tax cannot technically be implemented on a market which is coupled with the EU internal energy market

If equivalent means the same price, here is the outcome for Serbia, for example: The current CO2 price in the EU is EUR 80 per ton of CO2 equivalent, but is expected to rise to above EUR 100 by 2030, or even reach EUR 150. It would raise prices to consumers by about EUR 75 per MWh and EUR 110, respectively.

The CBAM regulation says that the tax cannot technically be implemented on a market which is coupled with the EU internal energy market. This is why there is a possibility for an exemption for electricity for imports from those countries which are coupled until a technical solution is found how to implement CBAM.

Starting from January 1, any country that is ready to be coupled would in parallel also need to qualify for and receive an exemption from CBAM for electricity. If you fulfil the conditions, you get coupled and get an exemption and CBAM will disappear.

What next?

It could be said that CBAM implementation as of January 1 will certainly affect market integration in the sense that people, businesses would react to market uncertainty.

Trade will be impacted; imports from contracting parties to the EU will be expected to disappear. Of course, contracting parties will continue to import electricity from the EU member states.

The weeks and months ahead will show to what extent the prices and liquidity would be affected in the contracting parties and neighboring EU member states Bulgaria, Croatia, Greece, Hungary, Romania, Slovenia.

For example, Greece would have only the Bulgaria-Romania route to export electricity, and it is already congested. Greece could face curtailments in renewable electricity.

We will also see what the effect on the renewables deployment in contracting parties will be. Are investors going to postpone investments until they see if the changes proposed by the commission are adopted, or are they going to leave for other markets?

Pozsgai: Amendments point in the right direction

Péter Pozsgai, Lead of the EU Carbon Border Adjustment Mechanism Readiness Task Force in the Energy Community Secretariat:

“The European Commission’s proposed amendments point in the right direction, reflecting a consideration of the progress of contracting parties in electricity market coupling, and better outlining the operational details of an exemption via an MoU. The refinement of the rules on national emission factors and the conditions for using actual emission values also demonstrate the intention to minimize the unintended impacts of CBAM on renewable development in contracting parties”.

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November 8, 2025
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RE-Source Platform: Number of PPAs in Europe drops by 60%

The number of power purchase agreements in Europe decreased by 60% compared to the same period last year, while contracted capacity has dropped by 40%, according to RE-Source Platform.

Europe’s power purchase agreement (PPA) market is facing headwinds in grid development, permitting and electrification and from negative electricity prices, RE-Source Platform warned.

RE-Source Platform facilitates corporate renewable energy sourcing in Europe. It was founded by WindEurope, SolarPower Europe, Climate Group RE100, and World Business Council for Sustainable Development, and steered by a group of corporate buyers and developers.

There are four main problems

“This slowdown is very paradoxical. Europe has no path to energy security and competitiveness unless it electrifies its economy – shielding itself from energy shocks and leveraging large scale deployment of wind and solar energy. But the market is facing headwinds,” the update reads.

The platform identified four main problems.

Europe is not expanding its grid infrastructure quickly enough. The main bottleneck is grid permitting with hundreds of gigawatts of projects awaiting grid connection.

The permitting process for renewables remains too slow. The Renewable Energy Directive has set permitting rules for acceleration, but EU member states have not implemented them.

The Clean Industrial Deal rightly names PPAs as a key solution

Direct electrification is the cheapest and most efficient way to decarbonize. It could also improve competitiveness and energy security, however Europe’s electrification rates are stagnating.

The increase of the negative price hours is making PPA negotiations harder. The way out are energy storage solutions.

The platform stressed the importance of PPAs.

“The Clean Industrial Deal rightly names PPAs as a key solution. Without them, we risk losing industrial competitiveness – and missing our climate targets. PPAs are a cornerstone of Europe’s industrial decarbonization,” the platform added.

They also give companies price certainty, help new wind and solar projects get financed and cut buyers’ exposure to volatile energy markets, according to the update.

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September 15, 2025
by in News

Von der Leyen: EU needs more homegrown renewables with nuclear as baseload

European Commission President Ursula von der Leyen delivered her 2025 State of the Union address at the European Parliament in Strasbourg. She said the single energy market would be completed and pointed out that clean homegrown energy is a tool to lower energy prices.

Ursula von der Leyen said the European Union’s greatest asset is the single market, but that it remains incomplete. The IMF, she noted, has estimated that the internal barriers within the single market are equivalent to a 45% tariff on goods, and 110% on services.

Most gaps are in three domains: finance, energy, and telecommunications.

“We need clear political deadlines. This is why we will present a single market roadmap to 2028. On capital, services, energy, telecoms,” she stated.

Energy bills are still a real source of anxiety for millions of Europeans

The EU’s top official said the commission would put forward a series of packages on affordability and the cost of living. One would be for energy.

Von der Leyen recalled that the EU managed to stabilize prices and secure supply during the energy crisis, and insisted that the 27-member bloc is now on the path to energy independence.

But, she told EU lawmakers, energy bills are still a real source of anxiety for millions of Europeans.

Von der Leyen unveiled an initiative called Energy Highways

“We know what drove prices up: dependency on Russian fossil fuels. So it is time to get rid of dirty Russian fossil fuels. And we know what brings prices down: clean homegrown energy. We need to generate more homegrown renewables – with nuclear as a baseload,” Von der Leyen stressed.

She reiterated that the commission would propose a grids package to strengthen infrastructure and speed up permitting.

Von der Leyen unveiled an initiative called Energy Highways. “We have identified eight critical bottlenecks in our energy infrastructure. From the Øresund Strait to the Sicilian Canal. We will now work to remove these bottlenecks one by one,” the European Commission president asserted.

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May 20, 2025
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Alarming rise in unpaid bills from electricity consumers in Greece

A steep rise in arrears was recorded last year in the Greek electricity supply market.

According to the latest report from the Regulatory Authority for Energy, Waste and Water (RAAEY or RAEWW), total debt for electricity rose by EUR 1 billion to EUR 3.4 billion in 2024.

It occurred despite a 10% reduction in retail electricity prices last year in the country.

Out of the total sum, existing customers owe EUR 1.74 billion to their suppliers. Another EUR 1.65 billion is debt by customers that have switched suppliers, leaving unpaid bills behind.

As for the EUR 1 billion of new debt, consumers in the mid-voltage account for EUR 400 million. They are large businesses and small industries. Another EUR 440 million is owed by various water utilities.

In December 2024, the Ministry of Environment and Energy passed a regulation subsidizing water utilities for EUR 200 million of their total debt. It means actual arrears in the segment were smaller, at EUR 240 million, but still sizeable.

Measures to reduce power theft

On top of increasing debt, the Greek market is also faced with a rise in electricity theft. In recent years, the phenomenon has worsened and is estimated to cost law-abiding consumers EUR 400 million per year.

The government and the regulator recently enacted strict fines to reduce theft. Offenders pay more than 100% over the normal power price for stolen quantities. The gradual installation of smart meters starting this year is also expected to help.

Suppliers warn of consequences

Power utilities must handle all the said liabilities. The Greek Energy Suppliers Association (ESPEN) has said that the issues indirectly increase power prices, as companies need to balance their budget through additional hedging and careful positioning.

ESPEN: Suffocating pressure as a result of high arrears

“The accumulation of large arrears causes suffocating pressure to the supply sector, raising prices and leading to negative effects for consumers,” it said.

Furthermore, suppliers asked the Hellenic Electricity Distribution Network Operator (HEDNO or DEDDIE) to waste no time in disconnecting consumers who owe money, in line with guidelines from the network code.

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