For Serbia’s energy-intensive industries, the real CBAM shock is not only at the factory gate. It starts upstream in the power system. The EU’s definitive CBAM phase began on 1 January 2026, and electricity is one of the covered sectors alongside iron and steel, cement, aluminium, fertilisers and hydrogen. At the same time, electricity imports from Energy Community countries into the EU are now subject to CBAM, while no Contracting Party has yet qualified for an exemption. That matters for Serbia because its industrial base still sits on a power system where coal remains dominant, and because the same coal-heavy system shapes both direct electricity exports and the embedded emissions of industrial exporters selling into the EU.
The starting point is Serbia’s generation mix. According to a U.S. government market guide published in January 2026, about 60% of Serbia’s electricity in 2024 came from coal, mainly lignite, roughly 30% from hydropower and around 10% from other renewables. Serbia’s own just transition documents describe the power sector as largely coal-based, while the Energy Community’s 2025 Serbia report shows the country had 3,985 MW of renewable capacity in 2024 and a policy target of 45.2% renewables in electricity generation by 2030. In other words, the system is moving, but not yet fast enough to remove coal from the industrial cost base.
That is where CBAM becomes commercially painful. The EU benchmark carbon price fell to €64.93/tCO2 on 17 March 2026, after the Commission signalled possible market intervention, but even at that lower level the carbon component remains material. Serbia’s greenhouse-gas inventory uses a country-specific lignite emission factor of 106.95 kg CO2/GJ for lignite burned in thermal power plants. Using that official Serbian factor, a typical lignite power station can be inferred to emit roughly around 1.0–1.1 tCO2 per MWh of electricity output, depending on plant efficiency. At an EU carbon price near €65/t, that implies a carbon cost in the order of roughly €65–72/MWh for coal-based electricity. Serbia has introduced a national carbon tax of €4/tCO2 from 1 January 2026, but on the same simplified power-sector basis that is only around €4–5/MWh. The gap between Serbia’s domestic carbon burden and the EU carbon benchmark therefore remains very large.
For industrial buyers, this is the central problem. A steel mill, cement plant or fertiliser producer in Serbia may still be buying electricity in a domestic market that looks cheaper than many EU peers on the surface, but the export customer in the EU increasingly prices the product as if the electricity behind it carried a carbon cost closer to the EU ETS. The EU is Serbia’s main trading partner, accounting for 58.3% of Serbia’s total trade in 2024, while Serbia’s exports to the EU were close to €19bn. That means the country is heavily exposed to a buyer base that is no longer looking only at ex-works price and freight, but also at embedded emissions and documentation quality.
The sectors most exposed are not abstract. In Serbia, the industrial names that sit closest to this pressure are obvious: steel around HBIS Serbia in Smederevo, cement producers, and fertiliser and chemical producers such as the wider Serbian fertiliser chain. Industry groups in Serbia have already begun framing the issue in exactly those terms, with the Association of Serbian Energy-Intensive Industry bringing together companies from the steel, cement and fertilizer sectors. These industries are exposed in three ways at once: as large electricity buyers, as exporters into the EU, and, increasingly, as potential buyers or sponsors of renewable supply arrangements that can improve the carbon profile of their output.
The Serbian electricity market is also changing in ways that make this problem more immediate. Serbia’s organised day-ahead market is more liquid than it was a few years ago. SEEPEX day-ahead traded 404,970.3 MWh in January 2026 and 414,520.1 MWh in February 2026. On the exchange homepage, day-ahead base prices for 15–19 March 2026 ranged from €89.24/MWh to €109.53/MWh, with daily traded volumes broadly around 13.3–14.2 GWh. Serbia is also moving toward market coupling, with implementation work progressing on the Serbia-Hungary border and activity beginning for Serbia-Bulgaria. That means domestic industrial power costs are increasingly influenced by regional wholesale conditions rather than by a closed national logic.
This has two consequences. First, energy-intensive industry is more exposed to wholesale volatility. Second, even if Serbian power is physically produced from lignite at a relatively low short-run cash cost, the market price paid by industrial buyers can still be pulled upward by regional scarcity, hydrology, gas prices and neighbouring EU power prices. The result is a difficult combination: Serbia’s industry does not enjoy the full climate advantage of a low-carbon grid, but it also does not always enjoy the price advantage that a purely domestic lignite system might suggest. It gets much of the carbon downside and not all of the pricing upside.
This is why the discussion is shifting from “cheap electricity” to “qualified electricity”. For a Serbian steel, cement or fertiliser exporter, the question is no longer simply whether power can be bought at an acceptable €/MWh level. The more important question is whether that power can be credibly ring-fenced as lower-carbon electricity through PPAs, self-generation, Guarantees of Origin where relevant, or dedicated renewable sourcing structures that improve the emissions profile of exported goods. Private renewable developers are the natural counterparties here. Serbia’s renewable build-out is still incomplete, but policy direction is clear, with the NECP targeting 45.2% renewables in electricity by 2030. As more solar, wind and hybrid solar-storage projects come online, Serbian industrials will increasingly need to behave not only as electricity consumers but as portfolio managers of carbon attributes.
That creates a new position for renewable producers. A Serbian solar or wind project is no longer only selling megawatt-hours into SEEPEX or a bilateral contract. It can also sell carbon relief. For a CBAM-exposed exporter, a renewable PPA can do more than stabilise part of the electricity bill; it can potentially reduce embedded indirect emissions in products shipped to the EU, strengthen customer negotiations and defend export margin. In practical terms, the renewable producer is no longer selling only power, but a package of electricity, documentation, and trade competitiveness.
The asymmetry between coal electricity and renewable electricity will therefore increasingly show up inside Serbian industry’s margin structure. A coal-linked industrial buyer may still face a wholesale power bill somewhere around current regional market levels, but once embedded emissions are translated into CBAM exposure, the true all-in export cost becomes far higher. A renewable-linked buyer may pay a similar or even slightly higher contracted power price in nominal terms, yet end up with a lower effective export cost because the carbon add-on at the border is smaller. That is the strategic inversion now underway: what used to look like more expensive power can become cheaper industrial competitiveness.
For Serbia, the commercial map is now fairly clear. Coal-based electricity remains important to keep the domestic system running, but it is becoming progressively worse as an export-enabling input for CBAM-exposed industry. Energy-intensive companies will increasingly split into three camps. One group will remain largely merchant buyers of grid electricity and absorb rising carbon-adjusted export pressure. A second group will try to secure long-term renewable supply through PPAs or self-generation. A third group, likely the strongest strategically, will combine both: partial renewable sourcing, storage or flexibility, and active procurement linked to wholesale market conditions. In the next phase of the Serbian market, the most competitive industrial exporter may not be the one buying the cheapest electricity today, but the one buying the cleanest bankable electricity for tomorrow’s EU customer.
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