The Executive Director of Montenegro’s power company EPCG, Ivan Bulatović, acknowledged the ongoing push toward decarbonization but emphasized that coal-fired electricity production will remain necessary for some time. Speaking at the regional EPCG NET energy conference in Budva, focused on the EU’s Carbon Border Adjustment Mechanism (CBAM) and Emissions Trading System (ETS), Bulatović described CBAM as a looming challenge, especially for state-owned energy companies reliant on coal in the Western Balkans (WB6).
He explained that coal-based electricity is one of the region’s highest carbon footprint exports and will be subject to CBAM’s carbon pricing on imports into the EU. ENTSO-E has proposed extending the CBAM transitional period until January 1, 2027, recognizing the challenges for producers like Montenegro, where coal accounts for about 40% of annual electricity production and up to 70% during dry summer months.
Bulatović highlighted short-term economic difficulties from CBAM’s introduction, which could hinder investment in renewables due to financial constraints. He noted that renewable energy projects, such as wind farms, require several years to develop, and permitting and construction challenges further delay solar energy expansion in the region.
Maja Rašović from EFT Group described CBAM’s principle as requiring importers to pay for the CO₂ emissions embedded in their products, but pointed out flaws in how the mechanism applies to the electricity sector. Current CBAM rules do not clearly differentiate between electricity sources, meaning renewables could be unfairly charged for emissions they did not produce, increasing costs unnecessarily. She expressed hope that upcoming EU regulatory adjustments would address these issues to better reflect market realities.
Sanel Buljubašić, CEO of Elektroprivreda BiH, stressed the urgent need for national legislation regulating carbon emissions in international trade to prevent greater economic burdens on businesses and consumers. He reminded that exporters from Bosnia and Herzegovina will be subject to CBAM charges from January 1, 2026.
Dušan Živković, General Director of Serbia’s EPS, warned of additional pressures on power companies due to CBAM and CO₂ costs, emphasizing the need for long-term financing mechanisms to support decarbonization and new renewable projects. He called on the Energy Community and EU for solutions.
Ivan Koprivica, head of the Republika Srpska power utilities association (MHERS), highlighted the lack of EU financial support for energy transition in his region. Due to limited funds, they have turned to Chinese partners, raising concerns about the long-term economic and strategic sustainability of such arrangements.
Pablo Obrador from the European Bank for Reconstruction and Development (EBRD) acknowledged the unclear CBAM rules but viewed the mechanism as an opportunity to accelerate decarbonization and correct current shortcomings.
Overall, the discussion underlined the complex balance between urgent climate goals, economic realities, and regional energy dependencies, with calls for clearer policies, financial support, and pragmatic transition strategies for Western Balkan energy sectors.
