Serbian exporters and electricity traders face a late-2026 regulatory split: current EU rules under the Carbon Border Adjustment Mechanism (CBAM) are binding, while proposed changes that could ease Serbian electricity exports remain under negotiation in Brussels. Companies must apply the rules in force when imports take place, not assume that proposed reforms will become law.
Current CBAM obligations apply to electricity imports
CBAM entered its definitive phase on January 1, 2026. On August 14, the European Commission published guidance for the definitive period covering electricity, iron and steel, aluminium and other sectors, then updated its general questions and answers on October 15. These materials address the rules applicable to current compliance.
The 50-tonne de minimis threshold for cement, iron and steel, aluminium and fertilisers does not cover electricity or hydrogen. An EU importer buying Serbian electricity therefore cannot assume that CBAM does not apply because a transaction is small in volume or value. Compliance must be assessed under the legislation applicable at the time of import.
Electricity methodology reforms remain under negotiation
Under COM(2025) 989, the European Commission has proposed changes to the electricity methodology. The proposal would broaden the treatment of power purchase agreements (PPAs) involving intermediaries, remove the current network condition in Annex IV point 5(b), and revise the nomination test. It also aims to encourage decarbonisation in third-country electricity systems by changing how embedded emissions are attributed.
The proposal is politically advanced but is not yet final law. The Council agreed its position on June 12, 2026, and the European Parliament adopted its first-reading position on September 15 before returning the file for interinstitutional negotiations. Serbian developers and traders should model a current-law operating case separately from a reform case showing the potential effects if amended rules are adopted and become applicable.
Contracts should make the distinction clear. A change-in-law clause could allow a PPA to move to a broader intermediary structure once a clearly defined legal trigger is met, but that trigger should be tied to publication and application of an adopted rule, not a political announcement.
Financing and historical records should reflect applicable law
Historical evidence should remain tied to the legislation that applied when the electricity was imported. Reconstructing or rewriting historical data under a later methodology could add audit risks rather than resolve the underlying compliance issue. The same approach applies to project finance: investors should not capitalise a higher expected export premium solely on the assumption that the Commission proposal will make qualification easier.
Banks are likely to assess whether a project is viable under rules currently in force, treating possible reform as optional upside until the final legal text, application date and implementing requirements are established.
Proposed CBAM expansion could reach more Serbian supply chains
The European Commission has proposed adding 180 steel- and aluminium-intensive downstream products to CBAM from 2028. The Council’s position widened the proposed list to around 200 products, while the European Parliament supported a significantly broader list of 457 products. The final scope remains under negotiation, with the proposed expansion reaching further into industrial supply chains beyond basic materials.
The issue is relevant to Serbia given its trade links with the European Union. In January-August 2026, Serbian goods exports reached approximately EUR 23.7 billion, up 8.8% year on year, and EU member states represented 58.3% of Serbia’s total external trade. Companies whose products are not currently covered should begin mapping where steel and aluminium inputs enter goods ultimately sold in the EU market.
Serbian exporters should maintain compliance with current rules, develop flexible data systems that can accommodate changes to the electricity methodology, and include appropriate conversion mechanisms in long-term contracts. Regulatory flexibility can create commercial value, but assuming a future benefit before it takes legal effect poses a financial risk.
Supported by CBAM.Clarion.Engineer