May 18, 2026
by in News

Greece, Serbia, North Macedonia and Bulgaria Advance Vertical Gas Corridor Expansion

Energy ministers and senior officials from Serbia, Greece, North Macedonia and Bulgaria met today in Athens to discuss the development of regional natural gas supply routes and cross-border interconnections. During the meeting, Greek Minister of Environment and Energy Stavros Papastavrou announced that the Vertical Corridor initiative would be extended to include North Macedonia and Serbia.

Greece, Bulgaria and Romania have already achieved significant progress in developing the Vertical Corridor, a strategic gas route designed to facilitate supplies toward Ukraine and Moldova. Key milestones include infrastructure upgrades, the construction of new pipelines such as the Interconnector Greece–Bulgaria (IGB), as well as commercial agreements and dedicated capacity auctions. The same approach is now being applied to the western Balkans through the creation of an additional branch of the corridor.

The Athens meeting focused primarily on two major gas interconnection projects: Greece–North Macedonia and North Macedonia–Serbia. The Greece–North Macedonia pipeline is currently under construction and is expected to be completed this year. Once operational, it will allow natural gas to flow northward from Greek LNG terminals at Revithoussa and Alexandroupolis, as well as from pipeline gas sources, including Azerbaijan.

Serbia Plans EUR 1.2 Billion in Gas Infrastructure Investments

The next segment of the regional gas chain, linking North Macedonia with Serbia, is expected to be completed by the end of 2027, according to Serbian Minister of Mining and Energy Dubravka Đedović Handanović. The project is currently in the spatial planning phase and is designed to connect with the southern Serbian city of Vranje. Its planned annual transport capacity is 1.5 billion cubic meters of natural gas.

Minister Đedović Handanović also stated that Serbia intends to invest approximately EUR 1.2 billion in gas infrastructure, including the modernization and expansion of existing pipeline networks.

North Macedonian Minister of Energy, Mining and Mineral Resources Sanja Božinovska emphasized that the regional interconnection would soon become operational.

“By the end of next year, we will be ready and the interconnection between Greece, North Macedonia and Serbia will be operational,” she said.

She also confirmed that the tender procedure for the pipeline connecting North Macedonia and Serbia was launched yesterday.

Greek Minister Papastavrou highlighted the broader strategic importance of the initiative, stressing Greece’s role in shaping the region’s emerging energy architecture.

“Greece plays a leading role in the new European architecture through projects of strategic importance. Infrastructure, interconnections, market coupling and the Vertical Corridor are initiatives that strengthen security of supply, reinforce geopolitical stability and create new development opportunities across the region. Today, we agreed on the expansion of the Vertical Corridor to North Macedonia and Serbia, as well as on institutionalizing cooperation among the four countries,” he stated.

Bulgaria was represented at the meeting by Deputy Minister of Energy Kiril Temelkov.

Further Regional Meetings Planned

The four officials agreed to continue their cooperation through a series of follow-up meetings. The next session is scheduled for September in Belgrade, with subsequent meetings planned in Skopje and Sofia.

The Athens discussions were also attended by representatives of gas and electricity transmission system operators from all four countries, underscoring the technical and strategic importance of the planned regional energy integration.

April 20, 2026
by in News

Serbia needs EUR 27 billion to reach decarbonization goals

Serbia faces a substantial financial and structural challenge in its transition toward a low-carbon energy system. According to recent statements from senior management at the state-owned utility EPS, the country will need approximately EUR 27 billion in investment to meet its decarbonization objectives by 2050.

This estimate underscores both the scale of transformation required and the limits of the current energy model, which remains heavily reliant on fossil fuels—particularly coal—while moving toward alignment with European climate and energy policies.

Financing the Transition: Beyond Public Balance Sheets

A central conclusion emerging from the discussion is that Serbia’s decarbonization pathway cannot be financed through internal resources alone. EPS leadership emphasized that achieving a sustainable transition will require a diversified financing structure involving the state, international financial institutions, commercial banks, and capital markets.

In practical terms, this reflects a broader shift in energy policy: decarbonization is no longer only a technical or environmental issue, but fundamentally a question of financial architecture. Access to long-term, low-cost capital—combined with appropriate risk-sharing mechanisms—will be critical to mobilizing the required investment scale.

To that end, EPS is preparing to enter both domestic and international capital markets. A key milestone in this process is the expected acquisition of a credit rating, which would enable the company to issue green bonds and attract institutional investors.
Such instruments are increasingly central to energy transition financing across Europe, particularly in markets where public funding capacity is constrained.

Structural Transformation of the Power Sector

Beyond financing, the transition implies a deep restructuring of Serbia’s generation portfolio. The gradual decommissioning of aging thermal power plants is seen as inevitable, reflecting both environmental requirements and declining economic viability.

At the same time, the development of renewable energy capacity—primarily wind and solar—is expected to accelerate. EPS has indicated a willingness to engage more actively with private investors through joint ventures, power purchase agreements (PPAs), and even the acquisition of completed or late-stage renewable projects.

This signals a notable evolution in the role of the state utility, from a traditional vertically integrated operator toward a more market-oriented and partnership-driven entity.

Importantly, Serbia’s existing asset base—particularly land holdings and grid infrastructure—provides a strategic advantage for scaling renewable deployment. Leveraging these assets efficiently could reduce project development timelines and costs, improving overall investment attractiveness.

Market Integration and Investor Engagement

The transition strategy also highlights the need for stronger integration with private capital and market mechanisms. EPS leadership explicitly stressed the importance of becoming more agile and active in the market, including building relationships with investors and adapting to competitive dynamics.

This reflects a broader regional trend in the Western Balkans, where historically state-dominated energy sectors are gradually opening to private participation. However, this transition requires not only regulatory reform but also improvements in corporate governance, transparency, and financial performance.

Recent financial results from EPS indicate positive momentum, with a significant increase in annual profit, which could strengthen its credibility with investors and lenders.
Nevertheless, maintaining financial discipline while undertaking large-scale capital expenditure will remain a key challenge.

Strategic Implications: A Transition at Scale and Speed

From a policy perspective, the EUR 27 billion investment requirement highlights the magnitude of Serbia’s decarbonization challenge. The country’s energy system is still largely carbon-intensive, with fossil fuels accounting for a dominant share of electricity generation, making the transition both urgent and complex.

Decarbonization will therefore require a coordinated approach that integrates infrastructure investment, market reform, and financial innovation. It will also need to address social and economic implications, particularly in regions dependent on coal production and thermal generation.

Crucially, the success of this transition will depend on Serbia’s ability to align its energy policy framework with EU standards, improve investment conditions, and mobilize both domestic and international capital at scale.

Conclusion

Serbia’s pathway to decarbonization is now clearly defined in terms of scale, direction, and urgency. The estimated EUR 27 billion investment requirement is not merely a financial figure it represents a comprehensive transformation of the country’s energy system.

The coming years will be decisive. Progress will depend on the effectiveness of financing strategies, the pace of structural reform, and the ability of key institutions such as EPS to evolve into modern, market-oriented energy players. Without these elements, the transition risks delays; with them, Serbia has the potential to position itself as a credible participant in Europe’s low-carbon energy future.

February 19, 2026
by in News

Fortis Energy and EBRD Partner to Finance Landmark 270 MW Solar-plus-Storage Project in Serbia

Fortis Energy and EBRD Partner to Finance Landmark 270 MW Solar-plus-Storage Project in Serbia

In a significant move for the Western Balkans’ energy transition, Fortis Energy has formalized a mandate letter with the European Bank for Reconstruction and Development (EBRD). The agreement initiates due diligence and structured negotiations for the long-term financing of a 270 MW solar photovoltaic (PV) plant, integrated with a 72 MWh battery energy storage system (BESS).

Located in the city of Sremska Mitrovica, west of Belgrade, the project is set to become the largest solar facility in both Serbia and the broader region.

Strategic Importance and Regional Impact

The mandate letter, signed by Fortis Energy’s leadership and the EBRD’s Sustainable Infrastructure Group, establishes the preliminary terms for a project aimed at bolstering Serbia’s national grid. According to Fortis Energy, the facility is a “demonstration of bankability,” signaling that large-scale renewable assets in Southeast Europe can meet rigorous international environmental and social sustainability standards.

The Sremska Mitrovica plant is expected to deliver substantial environmental and social benefits:

  • Annual Output: Estimated at over 365 GWh of clean electricity.

  • Household Impact: Capable of powering more than 105,000 households annually.

  • Carbon Mitigation: Forecasted to avoid approximately 182,000 tons of emissions per year.

Construction is scheduled to begin in the third quarter of 2026, with full commissioning targeted for the first quarter of 2028.

Technical Breakdown and EPC Partnerships

The development is being executed in phases. Earlier this year, Fortis signed an Engineering, Procurement, and Construction (EPC) contract with Kontrolmatik Technologies for the first phase, known as Noćaj 1.

Phase/Project Solar Capacity (MWp) Grid Connection (MW) Storage Capacity (BESS)
Noćaj 1 135 MW 90 MW 36 MWh
Full Sremska Mitrovica 270 MW — 72 MWh
Erdevik (Proposed) 100 MW 74 MW 30 MWh

Fortis Energy and EBRD Partner to Finance Landmark 270 MW Solar-plus-Storage Project in Serbia

In a significant move for the Western Balkans’ energy transition, Fortis Energy has formalized a mandate letter with the European Bank for Reconstruction and Development (EBRD). The agreement initiates due diligence and structured negotiations for the long-term financing of a 270 MW solar photovoltaic (PV) plant, integrated with a 72 MWh battery energy storage system (BESS).

Located in the city of Sremska Mitrovica, west of Belgrade, the project is set to become the largest solar facility in both Serbia and the broader region.

Strategic Importance and Regional Impact

The mandate letter, signed by Fortis Energy’s leadership and the EBRD’s Sustainable Infrastructure Group, establishes the preliminary terms for a project aimed at bolstering Serbia’s national grid. According to Fortis Energy, the facility is a “demonstration of bankability,” signaling that large-scale renewable assets in Southeast Europe can meet rigorous international environmental and social sustainability standards.

The Sremska Mitrovica plant is expected to deliver substantial environmental and social benefits:

  • Annual Output: Estimated at over 365 GWh of clean electricity.

  • Household Impact: Capable of powering more than 105,000 households annually.

  • Carbon Mitigation: Forecasted to avoid approximately 182,000 tons of emissions per year.

Construction is scheduled to begin in the third quarter of 2026, with full commissioning targeted for the first quarter of 2028.

Fortis Energy’s Growing Regional Footprint

Headquartered in the Netherlands with key operational hubs in Istanbul and Belgrade, Fortis Energy is aggressively pursuing its goal of becoming a premier Green Baseload Independent Power Producer (IPP).

Beyond Sremska Mitrovica, the company is advancing a robust pipeline:

  • Erdevik, Serbia: A planned 100 MW hybrid plant with 30 MWh of storage.

  • Erseka, Albania: A 75 MW solar project with 25 MWh of storage, currently under construction.

  • Portfolio Growth: Fortis currently operates over 200 MW of renewable assets, with an additional 500 MW slated for deployment through 2027.

By integrating storage with solar and wind assets, Fortis is positioning itself to provide stable, renewable energy across Southeast Europe, supporting the region’s broader decarbonization objectives.

February 9, 2026
by in News

GCL Moves Knjaževac Solar Project Forward as Serbia’s Large-Scale PV Pipeline Expands

Chinese energy group GCL has advanced its plans for the Knjaževac solar power plant, a major photovoltaic project proposed for eastern Serbia and among the country’s largest developments currently in the pipeline.

The Municipal Council of Knjaževac has launched the process to draft a detailed regulation plan for the facility. A public consultation on the draft decision was held from February 3 to 5. Once the decision to prepare the plan is formally adopted, authorities will open a second public discussion lasting 15 days.

According to the draft decision, the initiative was filed by the prospective investor, Central Europe Energy Company, a Belgrade-registered entity. The company is 90% owned by China’s GCL Intelligent Energy (Suzhou), with the remaining 10% held by Central Europe Consulting Company, also based in Belgrade.

The project has already cleared an important grid-related milestone. In May 2025, Central Europe Energy Company signed a grid connection agreement with Serbia’s transmission system operator, Elektromreža Srbije (EMS). The signing was part of a broader package of 11 renewable energy projects contracted by EMS at the time. EMS said that, among nine solar projects included in that round, the Knjaževac photovoltaic plant carried the highest proposed capacity at 136 MW.

Municipality head Milan Đokić described the development as the largest investment in Knjaževac’s history, estimating its value at EUR 200 million, as reported by local outlet Knjaževačke Novine.

Planning documentation will cover roughly 267 hectares, spanning parts of the cadastral municipalities of Krenta, Ponor, Mučibaba, and Miljkovac within the municipality of Knjaževac. The preparation deadline for the detailed regulation plan is set at 12 months, and the decision also предусматривает a strategic environmental assessment.

Serbia’s solar market is growing from a relatively low base. The country’s largest operating solar park is currently the 27 MW facility installed by Nofar Energy, while the biggest project by planned capacity is CWP Europe’s 150 MW Solarina development.

GCL is active across most continents, with a core business centered on solar module and energy storage battery manufacturing, alongside the development of low-carbon energy solutions.

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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January 7, 2026
by in News

Đedović Handanović: Construction of 1 GW solar project to start in 2026

The start of construction of solar power plants in a project for a total capacity of 1 GW is expected in 2026, Minister of Mining and Energy of Serbia Dubravka Đedović Handanović said.

State-owned power utility Elektroprivreda Srbije (EPS) announced that its shareholders’ assembly adopted the Three-Year Business Plan for the period 2026-2028.

Dubravka Đedović Handanović pointed out that the company had good production and financial results for three consecutive years. According to the adopted three-year business plan, this trend will continue in 2026, she added.

EPS will invest EUR 1 billion in 2026

The minister recalled that in 2025 EPS built its first wind farm – Kostolac, and the Petka solar power plant, with a combined capacity of 76 MW. The company also finished the construction of the desulfurization facility at its coal-fired power plant Nikola Tesla B (TENT B), allowing the reduction of sulfur dioxide (SO2) emissions by 20 to 40 times, she added.

“Investments this year have also been at a high level, 97% in fact, considering that due to the scope and complexity of preparatory activities, the start of materialization of the project for the construction of solar power plants of 1 GW is expected in 2026. The focus of investments of around EUR 1 billion in 2026 will be on maintenance and improvement of the reliability of the power system and, primarily, on increasing the share of renewable energy sources in EPS’s energy mix,” Đedović Handanović stressed.

The company will build new solar power plants as well

The largest portion of the investments, in her words, is planned for new renewable energy plants, such as the construction of solar power plants totaling GW and pumped storage hydropower plant Bistrica, as well as the development of a larger number of solar power plants on land owned by EPS.

Of note, the company is developing the 1 GW solar project, which includes batteries, in collaboration with a consortium comprising Hyundai Engineering and UGT Renewables.

EPS yesterday invited bids for a preliminary feasibility study and conceptual design for a solar power plant on the ash disposal site of TENT A.

The minister revealed that next year’s plan includes an increase in employees’ salaries.

The company will continue its transformation activities, she added. Đedović Handanović welcomed the fact that EPS didn’t take out liquidity loans this year.

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January 6, 2026
by in News

Đedović Handanović: Construction of 1 GW solar project to start in 2026

The start of construction of solar power plants in a project for a total capacity of 1 GW is expected in 2026, Minister of Mining and Energy of Serbia Dubravka Đedović Handanović said.

State-owned power utility Elektroprivreda Srbije (EPS) announced that its shareholders’ assembly adopted the Three-Year Business Plan for the period 2026-2028.

Dubravka Đedović Handanović pointed out that the company had good production and financial results for three consecutive years. According to the adopted three-year business plan, this trend will continue in 2026, she added.

EPS will invest EUR 1 billion in 2026

The minister recalled that in 2025 EPS built its first wind farm – Kostolac, and the Petka solar power plant, with a combined capacity of 76 MW. The company also finished the construction of the desulfurization facility at its coal-fired power plant Nikola Tesla B (TENT B), allowing the reduction of sulfur dioxide (SO2) emissions by 20 to 40 times, she added.

“Investments this year have also been at a high level, 97% in fact, considering that due to the scope and complexity of preparatory activities, the start of materialization of the project for the construction of solar power plants of 1 GW is expected in 2026. The focus of investments of around EUR 1 billion in 2026 will be on maintenance and improvement of the reliability of the power system and, primarily, on increasing the share of renewable energy sources in EPS’s energy mix,” Đedović Handanović stressed.

The company will build new solar power plants as well

The largest portion of the investments, in her words, is planned for new renewable energy plants, such as the construction of solar power plants totaling GW and pumped storage hydropower plant Bistrica, as well as the development of a larger number of solar power plants on land owned by EPS.

Of note, the company is developing the 1 GW solar project, which includes batteries, in collaboration with a consortium comprising Hyundai Engineering and UGT Renewables.

EPS yesterday invited bids for a preliminary feasibility study and conceptual design for a solar power plant on the ash disposal site of TENT A.

The minister revealed that next year’s plan includes an increase in employees’ salaries.

The company will continue its transformation activities, she added. Đedović Handanović welcomed the fact that EPS didn’t take out liquidity loans this year.

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January 4, 2026
by in News

Serbia, North Macedonia seek to build gas interconnector by end-2027

Serbia and North Macedonia aim to complete the construction of a gas interconnector in late 2027 and put it into operation in early 2028, Serbian Minister of Mining and Energy Dubravka Đedović Handanović said following a meeting with North Macedonia’s Minister of Energy, Mining and Mineral Resources Sanja Božinovska. The pipeline’s projected annual capacity is 1.5 billion cubic meters of natural gas.

Following the construction of the interconnector with Bulgaria, Serbia continues to diversify its supply routes, and the gas link with North Macedonia is a priority in that context, according to Đedović Handanović.

Serbia’s portion of the interconnector with North Macedonia will be 144 kilometers long and will cost an estimated EUR 153 million to build, she said. The plan is to obtain a construction permit in mid-2026 and launch works immediately afterward, she added.

Serbia’s portion of the pipeline will cost EUR 153 million

The planned route on Serbia’s territory is Orljane – Leskovac – Vranje – the North Macedonian border, according to her.

Đedović Handanović: Serbia’s goal is a fully diversified gas supply

“The capacity of the gas interconnector with Bulgaria is 1.8 billion cubic meters per year, and with the completion of the interconnector with North Macedonia, as well as the planned interconnector with Romania, whose capacity will be between 1.6 and 2.5 billion cubic meters, we will have a fully diversified gas supply within the next few years,” said Đedović Handanović.

serbia north macedonia gas pipeline interconnection djedovic bozinovska

Photo: Ministry of Mining and Energy/Nenad Kostić

The goal is to have as many supply options as possible, not to depend on a single supplier, and to ensure greater security and a better negotiating position in terms of prices and capacity, she added.

Božinovska, for her part, said the interconnector with Serbia would ensure new gas sources for North Macedonia and strengthen regional energy stability.

Božinovska: The gas link is one of the most important regional infrastructure projects

“This is also one of the most important regional infrastructure projects – important not only for North Macedonia and Serbia, but for all of Europe. With this new energy link, both countries will gain access to alternative sources and routes, and Europe will get a stronger and better connected Balkans,” Božinovska asserted.

The two countries have completed the necessary studies, agreed on the route, ensured the European Union’s support, and defined a clear implementation timeline, according to her.

Joint efforts to secure a postponement of CBAM

The meeting also addressed the coordinated approach to the EU’s Carbon Border Adjustment Mechanism (CBAM), which is scheduled to take effect on January 1, 2026.

According to Đedović Handanović, the two sides agreed to act jointly on this issue and to request a postponement of the mechanism’s implementation.

“Letters from all contracting parties to the Energy Community will be sent next week so that we can continue the dialogue with the European Commission, which is important not only for Serbia and North Macedonia, but also for the other contracting parties,” she said.

The two sides also discussed the possibility of North Macedonia covering part of Serbia’s demand for oil derivatives, primarily in the country’s south, the Serbian Ministry of Mining and Energy said in a statement.

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December 20, 2025
by in News

Serbia is first Energy Community contracting party to enter verification phase of market coupling

Serbia is the first Energy Community contracting party to enter the verification phase of the market coupling procedure, the Energy Community Secretariat said after the annual meeting of the Ministerial Council in Vienna.

At the Energy Community Ministerial Council, ministers addressed energy security, market integration, climate policy, and environmental protection, confirming a shared EU–contracting parties direction for Europe’s energy future, according to the secretariat.

Ministers and representatives of the secretariat also discussed the amendments to the Carbon Border Adjustment Mechanism’s regulation revealed by the European Commission yesterday. The meeting was attended by European Commissioner for Energy Dan Jørgensen.

The secretariat underlined that several contracting parties are now approaching a decisive stage in electricity market integration ahead of accession, having fully or nearly transposed the Electricity Integration Package (EIP).

The two-step verification phase for Serbia kicked off on October 22

Subject to verification of compliance by the European Commission, this progress opens the door to electricity market coupling with the EU internal market ahead of accession, it added.

“Serbia has already entered the verification phase, while Moldova has fully transposed the package. In this context, ministers underlined that the CBAM, entering into force in January,  should not pose an issue for cross-border electricity trade,” the update reads.

eu region ministerial council 2025 meeting
Photo: Energy Community Secretariat

Full electricity market integration ahead of accession offers a clear pathway to safeguarding decarbonization gains, supporting fair and efficient cross-border electricity exchanges, and attracting clean energy investment, according to the secretariat.

The two-step verification phase for Serbia kicked off on October 22. The first step is the verification by the secretariat, and the second by the commission.

The secretariat must complete the verification within three months, by January 22. The process is in the final stage, Balkan Green Energy News has learned.

The European Commission has five months to do its part

Once this is finished, the commission has five months to do its part. If the commission’s verification is positive, Serbia could meet the end-July deadline to apply for market coupling. The next phase involves technical activities, and it lasts 18 months.

“We are very deep in the process of verifying what Serbia has adopted. Now we are about to start this process for Moldova. And soon, I hope, after the remaining elements of the legislative package are adopted by Montenegro and North Macedonia, the verification can start in these two cases,” stressed Artur Lorkowski, Director of the Energy Community Secretariat.

He added that it has taken two decades of cooperation to build the momentum toward market coupling that ministers today have consolidated.

Lorkowski: The voice of the Energy Community ministers on CBAM has been heard by the commission

eu region ministerial council 2025 artur lorkowski
Artur Lorkowski (photo: Energy Community Secretariat)

Regarding the European Commission’s amendments to the CBAM regulation, he recalled that, on behalf of the ministers, the secretariat has sent a list of 11 different issues that needed to be addressed.

“The voice of the Energy Community ministers has been heard by the commission, and the progress which has been made in the contracting parties has been recognized. We see that in different amendments which are proposed. The proposal is going in a good direction. If you ask me whether this is satisfactory and whether it solves all of the problems, no, for two reasons,” he underscored.

The first reason is that it requires time, and the damage will be done from January 1, 2026, when the CBAM implementation starts.

Jørgensen: A lot of progress has happened

“We already see that, for example, the allocations of the cross-border power lines between the contracting parties and the EU member states for next year are dropping significantly,” Lorkowski explained.

The second reason is the issue of completeness. “We are still not certain whether, for example, renewables in the contracting parties can be treated equally as those in the EU,” he said, and added that the secretariat is in communication with the commission on these issues.

According to European Commissioner for Energy Dan Jørgensen, it is clear that a lot of progress has been made in what will hopefully be future EU member states or neighbors, especially in the transposition of EU energy law.

Focus on four issues

According to the secretariat, the ministers further committed to advancing a coherent and predictable framework to sustain electricity market integration while creating the enabling conditions for the clean energy transition.

The secretariat highlighted four issues.

First, contracting parties will individually pursue national carbon pricing models according to their domestic circumstances, while work continues to explore coordination possibilities and ensure coherence between national carbon pricing systems in view of their gradual alignment with the EU ETS.

Second, the Energy Community framework will further incorporate core EU legislation on nature conservation, biodiversity, and water protection into the Energy Community Treaty.

Third, to keep momentum behind the rapid growth of renewables, the contracting parties will step up efforts to secure mutual recognition of guarantees of origin with the EU.

Finally, effective coordination and implementation of national energy and climate plans (NECPs) is critical, participants agreed.

The EU’s recent agreement on the 2040 climate targets sets a clear direction, and contracting parties must follow this pathway as they develop their long-term energy and climate policies, the update reads.

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