The Carbon Border Adjustment Mechanism (CBAM), which the European Union is fully implementing from 1 January 2026, poses a serious challenge for the Serbian economy and in particular for the energy sector. After a transitional phase starting in 2023, the CBAM imposes fiscal obligations on carbon-intensive products in order to level the playing field between EU and third-country producers and prevent “carbon leakage”. The CBAM will apply to electricity, steel, cement, fertilizers, aluminum and hydrogen, directly affecting Serbia, whose exports are heavily linked to the EU market. Although the taxes are formally paid by European importers, the increased costs will be passed on to Serbian producers through reduced competitiveness and higher product prices. The Fiscal Council estimates that the total costs for the industry will increase from around €45 million in 2026 to €150-200 million by 2030.
However, the biggest risk will concern the Serbian Energy Company (EPS) and the price of electricity. Unlike industry, electricity exports will be subject to the full CBAM price immediately, without a gradual adjustment. Since around 70 percent of Serbia's electricity comes from coal-fired power plants, the carbon footprint is many times higher than in the EU. CBAM taxes or the introduction of a domestic emission tax could lead to a significant increase in production costs, which would inevitably be passed on to end consumers. The Fiscal Council warns that the price of electricity for households could increase by more than 100 percent, with serious social and economic consequences.
The article by Filip Mirilović was originaly published with the support of the project Enhancing the Capacities of Serbian Independent Media in Informing about the Green Transition Challenges by Vreme.
