Electricity prices in Montenegro are currently not expected to rise, according to a statement from Elektroprivreda Crne Gore (EPCG). This announcement comes amid discussions surrounding the upcoming implementation of the European Union’s Carbon Border Adjustment Mechanism (CBAM), set to begin on January 1, 2026. The CBAM will impose additional costs on electricity imported from non-EU countries that is generated from coal.
EPCG officials indicated that while the CBAM is on the horizon, there may be a delay in its application. They anticipate more detailed guidelines regarding how the mechanism will be implemented, including potential exceptions or transitional periods, will be available following the upcoming Ministerial Council meeting of the Energy Community. This meeting will address further steps and possible transitional arrangements for energy community countries.
The CBAM aims to align carbon emissions across EU member states and non-member states, forming part of a broader European decarbonization policy. Currently, EPCG pays approximately 24 EUR per ton for CO2 emissions that are not covered by free allowances. Starting in 2026, the EU will eliminate these free allowances, meaning that the cost will apply to every ton of emissions produced.
EPCG clarified that any electricity exported from Montenegro to the EU will be subject to calculations under the CBAM. This implies that the selling price for this electricity will be reduced by the value of CO2 emissions associated with each megawatt-hour produced.
Concerns have been raised by environmental organizations such as Eko-tim, suggesting that the introduction of the CBAM could lead to increased electricity prices for consumers in Montenegro, given that a significant portion of the country’s electricity production is coal-based. The program coordinator for climate and energy at Eko-tim, Diana Milev-Čavor, noted that EPCG will no longer be able to sell electricity at the same prices as before, as the EU market will require imported goods to include carbon costs.
Currently, the price of CO2 on the European Emissions Trading System (ETS) market is around 80 EUR per ton. EPCG expects further consultations and alignments at the Energy Community and European Commission levels in the coming months to define the pace and model for non-EU countries’ adjustments.
In response to questions regarding potential price increases due to the CBAM, EPCG stated that there are currently no announcements indicating an imminent change. The company highlighted that decisions regarding active electricity prices can be made at any time throughout the year, not tied to a specific date. Their only obligation is to notify the public 15 days prior to any price changes.
Since January 1, 2023, EPCG has had the authority to adjust electricity prices based on market trends and business performance. While they consider various factors in their decision-making, there are no current indicators pointing to a price increase. If such a situation arises, EPCG commits to informing the public and its customers promptly.
Milev-Čavor also pointed out that electricity exports account for 35% of Montenegro’s total export value, underlining the broader social and economic implications of export activities. She emphasized that the CBAM was not unexpected, having been announced years ago, yet Montenegro has yet to undertake key measures to mitigate its negative impact on electricity exports.
In related news, the search for a new executive director at EPCG has drawn attention, with three candidates applying for the position: Zdravko Dragas, Zoran Šljukić, and Mladen Bojanić. Dragas is an electrical engineer, while Šljukić has extensive experience within EPCG. Bojanić is a former member of parliament and minister.
The announcement of a new executive director follows the dismissal of Ivan Bulatović before the end of his four-year term. The Chairman of the Board of Directors, Milutin Đukanović, confirmed that Bulatović’s removal was conducted legally and expressed support for the decision, despite acknowledging Bulatović’s effective leadership.
As the landscape of Montenegro’s energy sector continues to evolve, the interplay between domestic pricing strategies and international market pressures will be crucial in determining future electricity costs for consumers. The upcoming CBAM implementation represents a significant shift that will require careful navigation by EPCG and the Montenegrin government.
