Montenegro is increasing the effective carbon cost carried by state power utility EPCG to €75 per tonne of CO₂. The change is linked to emissions trading and could create an annual burden of about €70 million. EPCG’s coal-fired generation at the Pljevlja plant is expected to face materially worse economics.
EPCG board president Milutin Đukanović said the utility will pay the full €75/t market price into the Eco-Fund under Montenegro’s emissions-trading framework. This is compared with a previous minimum level of around €24/t. The higher charge applies as EPCG continues to rely on Pljevlja as a key domestic generation asset.
Pljevlja remains important during periods of weak hydrology when hydroelectric production falls. With a substantially higher carbon charge, the marginal cost of coal-fired power increases. The change also narrows the difference between generating domestically and importing electricity from neighbouring markets.
The impact on dispatch and commercial decisions is becoming more relevant as Southeast European wholesale prices move between cheap renewable-heavy periods and expensive scarcity hours. In that context, carbon costs influence how costs compare across domestic generation and cross-border supply. EPCG has also pointed to uncertainty around CBAM affecting its financial performance.
EPCG said CBAM uncertainty reduced first-quarter revenue by around €12-13 million. The higher domestic carbon price also affects electricity exports into the European Union under CBAM. Where domestic carbon costs meet relevant EU rules and can be demonstrated, they can reduce residual carbon liability attached to imported electricity.
This can improve the position of Montenegrin electricity compared with exports from markets where carbon remains largely unpriced. For exporters calculating EU border-carbon exposure, Montenegro’s domestic carbon regime may therefore carry increased relevance alongside the new €75/t level. EPCG’s challenge is to replace high-carbon generation with enough solar, wind, hydro flexibility and storage to protect supply without shifting costs into imports.
An annual carbon burden of about €70 million makes that transition more immediate for EPCG’s balance sheet. The new €75/t level thus affects both generation economics at Pljevlja and how exporters account for EU border-carbon exposure under CBAM.