Balkan markets face shifts from CBAM and decarbonisation

The Balkan steel and energy markets are undergoing structural shifts driven by decarbonisation and the European Union’s Carbon Border Adjustment Mechanism (CBAM). These regulatory changes are creating a divergence between EU and non-EU Balkan nations regarding trade policies and purchasing strategies.

In the energy sector, electricity trade between the Western Balkans and the EU saw a significant decline in the second quarter of 2026, falling approximately 15% year-on-year. Conversely, regional power exchange activity has increased, with day-ahead volumes rising by roughly 19%. Notable growth in regional exchange volumes was seen in the Albania-Kosovo exchange (ALPEX) at 52% and Montenegro’s MEPX at 49%.

In the steel industry, experts suggest that the market is entering a new era where energy costs and carbon regulations will dictate competitiveness. Companies that can adapt quickly to these technological and operational shifts are expected to gain a stronger advantage as the market structure evolves toward 2027.