Based on reporting by Iskra Pavlova.
New estimates suggest that companies in Montenegro could face up to €191 million in annual costs once the Carbon Border Adjustment Mechanism enters its financial phase. The projected exposure stems largely from electricity exports to the European Union, where carbon-intensive power generation would incur significant carbon charges when sold into EU markets. For a relatively small economy with a heavily export-linked energy sector, the mechanism could materially reshape the competitiveness of its electricity trade with Europe.
Montenegrin officials and analysts note that the ultimate cost will depend on several variables: the future price of carbon in the EU ETS, export volumes, and the carbon intensity of domestic generation. One potential pathway to reduce exposure would be aligning Montenegro’s own emissions trading framework with the EU system, which could allow domestic carbon pricing to offset CBAM liabilities but would also raise domestic energy costs and accelerate pressure to decarbonize the country’s power mix. New projects focused on solar and wind power as well working with EU partners such as Italy have been paths for Montenegro to attempt and manage the shift. This demonstrates the far reach of CBAM and its expansion far from a simple trading tool to a whole-of-market mechanism with transformative power
FACS Perspective
At FACS, we see Montenegro’s situation as a clear illustration of CBAM’s expanding geographic reach. The mechanism is no longer simply a trade instrument affecting distant exporters, it is already reshaping the economics of energy trade and industrial production in countries deeply integrated with EU markets.
For companies operating along European supply chains, this shows the growing importance of carbon cost visibility and regulatory preparedness. As CBAM transitions from reporting to financial enforcement, exporters, utilities, and industrial producers will increasingly need carbon market intelligence, scenario modeling, and strategic advisory to anticipate cost exposure, protect export competitiveness, and navigate the widening carbon regulatory perimeter around the EU economy.
This article is based on publicly available reporting by SeeNews.
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