Electricity is becoming one of Montenegro’s most strategically important merchandise exports just as the European Union’s Carbon Border Adjustment Mechanism (CBAM) is reshaping the economics of selling power into the EU market.
According to MONSTAT, Montenegro exported EUR 372.9 million worth of goods in January–August 2026. Electricity accounted for EUR 73.6 million, or approximately 19.7% of total merchandise exports. Imports reached almost EUR 3.0 billion, leaving export coverage of imports at just 12.5%. In an economy with such a substantial trade deficit, the value captured from every exportable megawatt-hour matters far beyond the electricity sector itself.
The comparison with 2025 highlights the growing importance of electricity exports. Montenegro recorded EUR 95.5 million in electricity export revenues for the whole of last year, yet had already achieved more than three-quarters of that value by August 2026. However, the introduction of definitive CBAM treatment for electricity means that headline export revenues no longer tell the full commercial story.
A Montenegrin generator can sell electricity to neighbouring Western Balkan markets, supply domestic customers or target an EU-based counterparty. Each route can involve different electricity prices, balancing charges, capacity costs and carbon-related obligations. For electricity released for free circulation in the EU, CBAM applies either the relevant default emissions value or, where all legal requirements are satisfied and supported by evidence, an installation-specific actual-emissions value.
The effects became apparent in the first quarter of 2026. Energy Community monitoring found that commercially scheduled electricity exchanges across Western Balkan–EU borders declined by approximately 25%, while day-ahead prices in Energy Community Contracting Parties averaged more than EUR 30/MWh below prices in neighbouring EU markets. The usual arbitrage mechanism was disrupted because the carbon adjustment could exceed the available price spread.
Montenegro provided a particularly clear example. The Energy Community Secretariat’s first-quarter analysis used a national electricity default emissions factor of 0.979 tCO₂e/MWh and a CBAM certificate price of EUR 75.36/tCO₂e, resulting in an indicative default-based carbon cost of EUR 73.78/MWh. Meanwhile, the day-ahead price spread between Montenegro and southern Italy was approximately EUR 43/MWh. Under these assumptions, the estimated carbon cost exceeded the apparent wholesale trading margin.
This creates a particular challenge for Montenegro’s diverse generation fleet, which combines large hydropower plants, wind and solar facilities with the Pljevlja coal-fired power plant. Under a default-value approach, a hydro or wind exporter may face a country-level emissions factor that does not reflect the direct emissions of its individual generating installation. The commercial incentive is therefore to establish whether actual-emissions treatment can be demonstrated for specific deliveries, rather than assume that a renewable technology label alone is sufficient.
Under the current rules, establishing actual emissions requires a demanding evidence process. The transaction must link the relevant generating installation, physical power purchase agreement (PPA), EU declarant, network route, nominations, production intervals and independent verification. Production and nominations must be matched within a period of no more than one hour, while the verifier must receive supporting evidence at least monthly. A Guarantee of Origin can support an environmental claim, but it does not replace the evidence chain required for electricity imports under CBAM.
Montenegro’s energy policy is consequently becoming inseparable from its export strategy. A new wind or solar project adds domestic generating capacity, but its wider economic contribution depends on the net revenue remaining after transmission, balancing, carbon, financing and evidence-related costs. Depending on market conditions, the same project may generate greater value through a long-term domestic industrial PPA or through an export contract serving Italy or another regional market.
This does not mean every renewable-energy plant should pursue a potential EU CBAM premium. Default-based exports remain a lawful commercial route, while non-EU regional markets continue to play an important role. Instead, exporters need to move away from valuing electricity as a uniform commodity once the final destination and importer are known. For a country where electricity already accounts for almost one-fifth of merchandise exports, contracts, grid access, emissions data and carbon treatment are becoming integral parts of external-trade infrastructure.
Electricity exports alone will not eliminate Montenegro’s trade deficit. Nevertheless, few other goods combine the same export value, domestic production potential and direct access to EU energy markets. The challenge is to ensure that Montenegro’s cleanest megawatt-hours are not automatically valued according to an emissions profile that fails to reflect the individual installation, where a more robust and legally compliant evidence route can be established.
By Virtu.Energy