Serbia close to merging with EU electricity market

Minister of Mining and Energy Dubravka Djedovic Handanovic said today that Serbia has been a leader within the Energy Community for the third year in a row in harmonizing with EU regulations and so far the only contracting party of this organization that has fulfilled the conditions for merging with the European Union electricity market.

Djedovic Handanovic, on the occasion of the Annual Implementation Report for 2025, published by the Energy Community Secretariat, emphasized that Serbia is the first in the Western Balkans to harmonize its legislative framework in the electricity sector.

- We have completed our task, which is also part of the Reform Agenda, or the EU Growth Plan. This is the first time that a country that is not a member of the EU meets the conditions to merge with its electricity market and the verification process, conducted by European institutions, is now underway - the minister emphasized.

She expressed hope that this process would be quick, because, as she stated, as soon as it is completed, we can connect to the EU electricity market, specifically with the market of Hungary, as our first neighbor, with which we also have a common exchange, which also includes Slovenia.

The Minister emphasized that being part of the EU energy market means multiple benefits for Serbia - they relate to faster trade and exchange of electricity, market sustainability, access to better prices, but also to greater energy security in the event of certain challenges or interruptions in supply in neighboring countries, so that we can react faster.

She reminded that a set of new laws in the field of oil, gas and mandatory reserves was recently adopted, which continued the process of harmonization with EU regulations, and emphasized that Serbia will continue to increase its energy reserves.

- In the last two years, we have significantly increased our mandatory reserves of oil and oil derivatives, which reached 44 days of last year's imports, and the stocks of Eurodiesel alone increased by 72 percent. Good preparedness and reserves of oil derivatives have allowed our citizens not to experience any shortages and give us additional security in the difficult situation we are facing as a result of the sanctions on NIS - said Djedovic Handanovic.

One of the main topics at today's Ministerial Meeting of the Energy Community in Vienna was the start of the implementation of the Carbon Border Adjustment Mechanism (CBAM).

The European Commission has published a proposal for amendments to the CBAM Regulation, which, as of the beginning of 2026, has yet to go through the adoption procedure in the EU institutions.

These changes also include some of the issues that Serbia has been raising in the past two years in order to obtain fairer rules for Serbian exporters to the EU. The method of calculating the emission factor for electricity production has been changed, so that the total national production mix will be taken into account, which will reduce the costs of CBAM by about 40 percent.

Djedovic Handanovic said that this change, together with some other proposed ones, will also reduce the negative consequences of CBAM on investments in RES.

- We are also in the most favorable position when it comes to market integration, and this progress enables the conclusion of a bilateral Memorandum of Understanding with the European Commission, which would determine adequate conditions and deadlines for exemption from the application of CBAM, including progress in the application of carbon pricing instruments - the minister emphasized.

In the past year, Serbia has increased its average compliance in all areas measured by the report from 55 to 63 percent. This is the best result in the Western Balkans region, and the second overall, after Moldova, and is above the average of all contracting parties, which this year is 53 percent.

Serbia has the best results in the areas monitored in the field of decarbonization, where it has further improved its score this year and is the leader among all contracting parties in the Energy Community with 83 percent.

The Serbian delegation at the meeting of the Ministerial Council of the Energy Community in Vienna consisted of Jovana Joksimovic, Assistant Minister of Mining and Energy for International Cooperation, European Integration and Project Management, and Rados Popadic, Assistant Minister for the Electricity Sector.