CBAM’s 2026 rollout pushes Serbian steel to lock in renewable PPAs as coal share drops to 61% and Southeast Europe CfDs top 4.2 GW

**TL;DR** Europe's Carbon Border Adjustment Mechanism (CBAM) implementation in 2026 is driving Serbian steel producers to secure renewable energy, while Southeast Europe sees a significant expansion in wind and solar capacity through Contracts for Difference.

Europe’s Carbon Border Adjustment Mechanism (CBAM) began its definitive phase on January 1, 2026. This mechanism imposes a border tax on specific imports into the EU based on their embedded carbon emissions. The policy targets goods like steel, cement, and electricity, aiming to level the playing field for EU industries facing carbon costs.

Serbian industries, particularly steelmakers such as HBIS, now face these new costs when exporting to the EU. This is largely due to Serbia’s national electricity mix, where official 2024 data shows brown coal and lignite make up 61.03% of the generation, while wind and solar together provide only 4.24%. Such a coal-heavy grid translates directly into higher carbon costs under CBAM, making renewable energy procurement a compliance necessity rather than just an economic choice.

The broader Southeast European region is simultaneously expanding its renewable energy infrastructure. Romania, for example, awarded a combined 4.2 GW of new wind and solar capacity through its 2024 and 2025 Contracts for Difference (CfD) rounds. These CfDs secured strike prices ranging from €40.46/MWh to €73.89/MWh, providing long-term revenue certainty for developers.

The CBAM rollout compels Serbian industrial consumers to actively pursue long-term Power Purchase Agreements (PPAs) for renewable electricity. This strategy allows them to demonstrate low-carbon sourcing and avoid the border tax. This industrial demand creates new investment opportunities for renewable energy projects across the Western Balkans. The robust growth in contracted renewable capacity, evidenced by Romania’s 4.2 GW, highlights a regional shift toward decarbonization. Watch for increased collaboration between heavy industry and renewable energy developers seeking to navigate new carbon regulations.