By the end of 2025, Serbia entered the decisive pre-implementation phase of the European Union’s Carbon Border Adjustment Mechanism with a trade structure that leaves little room for complacency. Unlike many non-EU exporters whose exposure to CBAM is marginal or indirect, Serbia’s export relationship with the EU is both deep and structurally concentrated in exactly those sectors the mechanism is designed to target. Iron and steel, cement and clinker, aluminium, fertilisers and electricity together form a substantial share of Serbia’s EU-bound goods trade, anchoring the country firmly within the first wave of CBAM economic impact.
The relevance of CBAM for Serbia is therefore not theoretical. It is measurable in tonnes, in euros, and increasingly in customs procedures that EU importers must now treat as part of the cost and risk of sourcing from non-EU producers.
Serbia’s total merchandise exports in 2025 are estimated at roughly €34 billion, continuing the upward trajectory established after the post-pandemic recovery. The EU remains Serbia’s dominant trade partner, absorbing approximately 55–60 percent of total exports, equivalent to €18–20 billion in value. Within this EU-bound flow, the CBAM-covered product groups represent an unusually large share compared with many other candidate or neighbouring countries.
Based on Serbia’s export structure and sectoral trade patterns carried forward from 2024 into 2025, CBAM-relevant exports to the EU are conservatively estimated at €9–10.5 billion in annual value. This implies that close to half of Serbia’s exports to the EU fall directly under CBAM reporting and, over time, pricing obligations. This concentration is what makes Serbia one of the most exposed economies in the Western Balkans to the new carbon customs regime.
The largest component of this exposure lies in iron and steel. Serbia’s base-metal exports to the EU have consistently exceeded €2.3 billion annually, with iron and steel products accounting for the majority of this value. Applying conservative sectoral filters to isolate CBAM-eligible products suggests that €1.3–1.5 billion of Serbia’s iron and steel exports to the EU in 2025 fall squarely under CBAM scope. In physical terms, this corresponds to approximately 9–11 million tonnes of steel and semi-finished steel products shipped to EU buyers during the year.
Cement and clinker exports represent the second major exposure pillar. Within Serbia’s broader mineral-products export category, cement and clinker remain among the most carbon-intensive and CBAM-relevant goods. Using typical EU import price ranges for cement and clinker, Serbia’s EU-bound cement exports in 2025 are estimated at 18–21 million tonnes, with an export value approaching €1.8–2.2 billion. This volume alone places Serbia among the most significant CBAM-exposed cement exporters into the EU from outside the bloc.
Aluminium adds a third layer of exposure that is smaller in tonnage but disproportionately significant in carbon intensity. Serbian exports of aluminium and aluminium products to the EU in 2025 are estimated at 0.7–1.0 million tonnes, with a value in the range of €1.0–1.5 billion depending on product mix. Because aluminium carries one of the highest embedded-emissions profiles per tonne, this segment contributes materially to Serbia’s total CBAM emissions footprint despite lower physical volumes.
Fertilisers and basic chemical intermediates form a narrower but still relevant slice of CBAM exposure. While their export volumes are smaller than metals or cement, they remain strategically sensitive due to their energy intensity and the volatility of their cost structure. In 2025, fertiliser exports to the EU from Serbia are estimated in the hundreds of thousands of tonnes, contributing additional CBAM-reportable emissions that EU importers must now quantify and document.
Electricity exports complete the CBAM picture. Although electricity trade volumes are lower in value terms than physical goods, they are uniquely exposed because CBAM applies directly to the embedded carbon intensity of the generation mix. Serbia exported several hundred gigawatt-hours of electricity to EU neighbouring markets during 2025, primarily through regional interconnections. Given Serbia’s still carbon-intensive generation profile, these exports carry a CBAM reporting obligation that is both visible and politically sensitive, particularly as EU buyers increasingly scrutinise the carbon origin of imported power.
When aggregated across all CBAM-covered sectors, Serbia’s EU exports in 2025 are estimated to carry an embedded emissions footprint of approximately 40–45 million tonnes of CO₂ equivalent. This figure is not an official inventory number but a reasoned approximation based on standard sectoral emission intensities applied to known export volumes. Steel contributes roughly 20 million tonnes, cement 15–17 million tonnes, aluminium 7–9 million tonnes, with the balance coming from fertilisers and electricity.
This embedded emissions volume defines the true scope of Serbia’s CBAM exposure. At an indicative EU carbon price corridor of €60–80 per tonne, the theoretical full carbon cost embedded in these exports would exceed €2.5–3.5 billion annually if priced in full. CBAM does not impose this cost immediately, but the scale of the underlying exposure frames the strategic challenge facing Serbian exporters.
In the initial implementation year, EU rules require importers to surrender CBAM certificates for only a small fraction of embedded emissions. Applying the 2.5 percent effective coverage factor that governs the early years of CBAM monetisation, Serbia’s CBAM-related customs cost exposure for EU imports in 2026 can be estimated at €70–80 million equivalent. This is broadly consistent with independent estimates that place Serbia’s early-phase CBAM cost impact in the €45–80 million range, depending on product mix, carbon price levels and reporting quality.
What matters more than the initial cost, however, is the trajectory. As free allowances phase out and CBAM coverage ramps up toward full parity with the EU ETS, Serbia’s annual CBAM-linked cost exposure could rise to €150–200 million by 2030, even under conservative carbon-price assumptions. Under tighter carbon markets or higher EU ETS prices, the number would be higher still.
This shift transforms CBAM from a reporting exercise into a structural trade variable. EU importers sourcing steel, cement, aluminium or electricity from Serbia will increasingly compare Serbian embedded emissions against alternative suppliers within the EU or from third countries with lower carbon intensity or recognised domestic carbon pricing. The burden of proof moves decisively upstream, toward Serbian producers and their ability to provide credible, verified emissions data that withstand customs and post-clearance audits.
The customs dimension of CBAM should not be underestimated. For Serbian exporters, CBAM effectively creates a second border at the EU customs point, one that is not tariff-based but data-based. In practice, the importer bears the legal obligation, but the commercial pressure flows backward through the supply chain. Exporters unable to deliver installation-level emissions data, audited according to EU-accepted methodologies, risk price penalties, delayed clearance or outright loss of contracts.
From a competitiveness standpoint, Serbia’s position is nuanced rather than uniformly negative. In steel and aluminium, proximity to EU markets and existing supply relationships still offer advantages. In cement, transport economics continue to favour nearby producers despite carbon costs. However, the margin for error is narrowing. High-carbon production routes that were previously competitive on pure cost grounds now face a visible and escalating carbon adjustment.
The strategic implication for Serbia is clear. CBAM exposure in 2025 is already large in absolute terms, but it is the forward curve of carbon customs costs that will determine long-term trade viability. Investment in emissions measurement, verification and reduction is no longer optional for exporters operating in CBAM-covered sectors. Nor is reliance on aggregate national averages sufficient; CBAM operates at installation level, and competitive advantage will accrue to producers who can demonstrate lower-than-average carbon intensity within the same product category.
By the end of 2025, Serbia stood at the threshold of this new regime with a trade structure that magnifies both risk and opportunity. The country’s EU export basket is CBAM-heavy, but it is also industrially sophisticated and geographically advantaged. Whether CBAM becomes a cost shock or a catalyst for industrial upgrading will depend on how quickly Serbian exporters, regulators and financial institutions adapt to the reality that carbon has now become a customs variable, not an abstract environmental metric.
Elevated by cbam.engineer