Carbon Border Adjustment Mechanism (CBAM) and the Western Balkans: Decarbonizing electricity, cement, iron and steel, and chemicals in Albania, Bosnia and Herzegovina and Serbia
Carbon Border Adjustment Mechanism (CBAM) and the Western Balkans: Decarbonizing electricity, cement, iron and steel, and chemicals in Albania, Bosnia and Herzegovina and Serbia
From 2026, the EU’s Carbon Border Adjustment Mechanism (CBAM) will apply a carbon price to selected imports, ensuring fair competition between EU producers and international exporters as the EU accelerates its transition to low-carbon production. CBAM aims to reduce carbon leakage, support EU decarbonization, and encourage producers outside the EU to lower the carbon intensity of their products, which will contribute to global climate goals under the Paris Agreement.
CBAM covers carbon-intensive sectors including electricity, cement, fertilizers, aluminum, iron and steel, and hydrogen. For exporters, improving carbon performance in these sectors will be key to maintain competitiveness on the EU market. This is particularly important for EU candidate countries, which are expected to align their legislation with the EU acquis as part of the accession process.
Albania, Bosnia and Herzegovina, and Serbia, as major exporters of CBAM-covered products, have an opportunity to take a proactive approach in this process. Supporting industrial decarbonization can strengthen their market position, reduce future CBAM costs, and advance national climate commitments. Take a look at developed reports for electricity, cement, iron and steel below. The report on chemicals will be due this year.
Within the EUKI TERPEIS BALKANS project, a four-part series examining CBAM-related risks and resilience in the electricity, iron and steel, cement, and chemical sectors across the three countries has been published and it draws on desk research, interviews, and stakeholder workshops.
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'This project is part of the European Climate Initiative (EUKI) of the German Federal Ministry for Economic Affairs and Climate Action (BMWK).’
