Podgorica, (MINA-BUSINESS) – According to an analysis by the NGO Eco-Team, the EU’s Carbon Border Adjustment Mechanism (CBAM) is already affecting the market logic behind Montenegro’s electricity exports.

“Although electricity prices in southern Italy were significantly higher than in Montenegro during the first quarter of this year, planned commercial electricity flows from Montenegro to Italy declined by more than 2,100 megawatt-hours (MWh) per day compared to the same period last year,” the analysis on the impact of CBAM on the Pljevlja Thermal Power Plant and the local and national economy stated.

The analysis showed that the first market effects of CBAM are already visible, noting that electricity could have been sold in Italy at a significantly higher price than in Montenegro, with the difference amounting to around €43 per MWh. 

Under normal market conditions, this would have been a clear incentive for exports. However, electricity exports from Montenegro are now also subject to a CBAM cost estimated at around €74 per MWh. As this additional cost is higher than the price difference between the Montenegrin and Italian markets, exports to Italy are no longer equally profitable,” the analysis stated.

In other words, CBAM has effectively erased the price advantage Montenegro previously had on the Italian market, making it more difficult to sell part of the electricity that had previously been competitive on the EU market, or resulting in significantly lower profit margins.