Serbia and CBAM: Between Alignment and Self-Interest
CBAM Weekly – Issue 52
A Carbon Price as a Prerequisite
The introduction of the EU CBAM has triggered significant political reactions not only within the EU but also across neighboring regions. Serbia is a prime example. The government in Belgrade is preparing to introduce a national carbon pricing system to mitigate the impact of CBAM on exports to the EU. The background is clear: from 2026 onwards, imports of electricity, cement, fertilizers, hydrogen, iron, steel, and aluminum into the EU will be subject to CO₂ costs-unless the country of origin has an equivalent carbon pricing system in place. Currently, Serbia is the only contracting party of the Energy Community able to implement the required MRV infrastructure (Monitoring, Reporting, Verification) for CBAM in time. This was confirmed by Jovana Joksimović, Assistant Minister for International Cooperation and European Integration at the Ministry of Mining and Energy. The implementation of this emissions monitoring infrastructure is a prerequisite for any form of national carbon pricing-be it a tax, a fixed CO₂ price, or an emissions trading system.
Tax Instead of Trading System
Serbia currently favors a carbon tax model with fixed prices over an emissions trading system. According to Energy Minister Dubravka Đedović Handanović, a regional ETS modeled on the EU’s scheme is not an option for Serbia before 2030. The financial burden would be too high, and implementation too complex. Instead, a national carbon price is being pursued, aiming to provide planning certainty for companies during the transition phase. This position was reaffirmed at the recent informal ministerial meeting of the Energy Community. Serbia is currently conducting a comprehensive analysis of all sectors potentially affected by CBAM. The goal is to develop a pricing model that is both nationally implementable and CBAM-compliant.
Power Sector in the Spotlight
The Serbian electricity sector is particularly affected. According to the Ministry of Energy, CBAM pricing without national compensation measures could lead to significant disadvantages. While Serbia is already part of a regional power market with Hungary and Slovenia and operates functioning day-ahead and intraday markets, it currently lacks a carbon pricing scheme. The government is therefore demanding that CBAM for electricity use the national power mix for emission factors-not an inflated EU average. This would distribute the burden more fairly and create incentives for investment in renewables. In this context, the European transmission system operator ENTSO-E has proposed a revision of the methodology for indirect emissions under CBAM during the transition period. To date, different emission factors are applied for electricity imported into the EU and electricity consumed during production in third countries.
Rising Pressure on Businesses
Time is of the essence. If electricity exports are fully subject to CBAM from 2026 and Serbia has not yet implemented a recognized carbon pricing system, exporters would face additional costs. At the same time, delays in implementing EU regulatory packages relevant to CBAM would reduce the likelihood of exemptions being granted. The European Commission has indicated to Energy Community member states that it would accept alternative carbon pricing models during transition periods-as long as they are credible and implemented in time. In this context, a Serbian carbon tax model would be a realistic solution, provided it is accompanied by a functioning MRV system.
What Does This Mean for European Companies?
For EU importers, this development offers both opportunities and uncertainties. Serbian suppliers could in the future provide CBAM-compliant emissions data or benefit from relief under a national carbon pricing system. This would increase procurement planning reliability. At the same time, companies importing Serbian intermediate goods should closely monitor the regulatory developments to avoid being caught off guard later.
Conclusion
Serbia finds itself in a political and economic balancing act. On one hand, the country aims to integrate into the European electricity market and protect its own industries from competitive disadvantages. On the other, the technical and financial preconditions for full integration into the EU ETS are not yet in place. Introducing a national carbon price appears to be a viable compromise-with tangible effects on supply chains, electricity imports, and the strategic planning of European companies.
Support with Strategic Alignment
If you would like to understand how a Serbian carbon pricing system could affect your supply chains or CBAM reporting obligations, feel free to contact us directly at helge@kolum.earth.