Montenegro is currently engaged in high-stakes negotiations with the European Union, aiming to postpone the full implementation of the Carbon Border Adjustment Mechanism (CBAM) until at least 2027. The country contends that without a delay, its economy faces staggering annual costs of up to €191 million, which could jeopardize key sectors as it strives to align with the EU’s ambitious climate policies.
During a recent Energy Community Ministerial Council meeting, Montenegro formally allied with Bosnia and Herzegovina to request an exemption from the carbon tax, which is set to enter its definitive phase on January 1, 2026. Montenegrin Energy Minister Saša Mujović emphasized that this delay is crucial for the country to finalize its electricity market coupling with the EU. This coupling is essential to alleviate the severe financial shock to its energy sector, which remains heavily reliant on the Pljevlja coal-fired power plant. The joint request also suggests a potential extension for the electricity sector until 2028 and has been forwarded to the European Commission for evaluation.
The economic implications of CBAM’s timely implementation are a significant concern for Montenegro’s industrial sector. The mechanism specifically targets carbon-intensive imports such as cement, iron, steel, aluminum, and fertilizers, which are vital to the nation’s export economy. The Montenegrin Chamber of Commerce has raised alarms about the potential adverse effects, particularly on the aluminum industry, arguing that a carbon levy could undermine the competitiveness of Montenegrin products in the EU single market. An executive from the state power utility, Elektroprivreda Crne Gore (EPCG), highlighted the mechanism as a formidable challenge for state-owned, coal-dependent companies throughout the Western Balkans.
In parallel with its lobbying efforts for flexibility, Montenegro is accelerating its domestic green transition to demonstrate its commitment to EU standards. The nation’s Reform Agenda for 2024-2027 outlines a strategic approach to adopting a national carbon pricing system that aligns with the EU’s Emissions Trading System. A pivotal aspect of this strategy includes a new Memorandum of Understanding with the International Finance Corporation (IFC) to develop a diverse portfolio of renewable energy projects, including wind, hydro, and solar power plants. Successfully expanding this new solar capacity necessitates a comprehensive understanding of the entire solar panel manufacturing process, from sourcing the appropriate raw materials to the final assembly.
Montenegro’s future hinges on balancing the immediate economic pressures stemming from EU policy with its long-term decarbonization objectives. Although the European Commission has introduced general flexibility measures, such as extending the purchase deadline for 2026 CBAM certificates to February 2027, it has yet to approve the specific, sector-based delay Montenegro is advocating for. The outcome of these negotiations will be crucial in shaping the country’s economic and environmental trajectory as it continues its journey toward EU membership. For professionals interested in deepening their understanding of this pivotal technology, a free e-course on solar manufacturing basics offers valuable insights.
Sources
- BiH, Montenegro ask EU to delay CBAM
- EU Reform and Growth Facility not yet speeding up energy …
- EU CBAM: What’s new and what’s next?
- 2027 in favour of Montenegro for extension of th
- Challenges and opportunities of CBAM implementation for …
- REFORM AGENDA OF MONTENEGRO 2024-2027 …
- Montenegro in talks for flexible CBAM implementation
- Montenegro’s annual CBAM costs could reach 191 mln euro
- Carbon Border Adjustment Mechanism (CBAM)
