The European Union has begun applying a carbon emissions tax known as CBAM on products of Serbian companies, exporters told Nova Ekonomija, who fear that this levy could significantly affect the competitiveness of their goods in the EU market. Our exporters have to pay CBAM partly in the EU, and a similar but smaller charge is paid in Serbia. The money goes into the budget of the state, which promises that the collected funds will be used for green projects, but experts are skeptical about that.
A third problem is the possibility of fueling inflation in Serbia due to the start of CBAM collection.
The Carbon Border Adjustment Mechanism (CBAM) is an EU environmental policy instrument. Essentially, it is a tax that the EU charges on the carbon emitted during the production of goods from “dirtier” industries that enter the EU. Serbia has been in a preparatory phase since October 2023, and from the beginning of this year companies in certain areas are required to measure, report and pay this levy.
Serbia decided to introduce its own law as a counterpart to CBAM in order to adapt. Two laws have been adopted – the Law on the tax on emissions of greenhouse gases and the Law on the import tax for carbon-intensive products, as Finance Minister Siniša Mali said, because exporters would have been obliged to pay this tax in the EU anyway. According to him, the money will be allocated for projects related to environmental protection and emission reduction.
He previously said in January that this move equalizes the position of domestic businesses with those that import into Serbia.
The money from this tax, which will be partly paid in Serbia while importers will pay part in Europe, will flow into the Serbian budget. In theory, these funds should be spent on projects to reduce emissions in the country. Over time, CBAM collection could significantly reduce the competitiveness of the Serbian economy in the EU market, which is its most important partner, but also spur inflation in the country.
“In accordance with the Law on the tax on emissions of greenhouse gases, domestic companies operating in energy-intensive industries — namely in the production of fertilizers, cement, iron, aluminium and electricity — are obliged to pay a tax of four euros per tonne of emitted pollution. Payment is made on the basis of relevant documentation in the second quarter of 2027 for the previous, i.e., 2026 year.
That means that the implementation of the law begins this year, and payment will be made next year,” members of the Association of Serbian Energy Intensive Industries told Nova Ekonomija.
Ognjan Pantić from the Belgrade Open School explains that not all Serbian exporters will have CBAM costs. Only goods in sectors covered by the EU mechanism — and only when they are imported into the EU — will trigger CBAM reporting and, once the system is fully implemented, the purchase of CBAM certificates. For exporters outside CBAM sectors — for example, companies exporting products that are not iron, steel, aluminium, cement, fertilizers, hydrogen or electricity — there is currently no CBAM tax.
However, the list of products covered by CBAM will grow over time, and it should be borne in mind that two-thirds of Serbia’s exports are placed in the EU, which is a reason for concern, says Pantić.
The tax is expressed as a price per tonne, and is paid on the amount of carbon dioxide emitted, but also on other harmful substances that occur during production. The price is not fixed and last year was between €80 and €90 per tonne. And here we come to the story about inflation, which could be stimulated in Serbia through CBAM, while at the same time reducing the attractiveness of Serbian products in the EU.
“Taxation of electricity and other raw materials (aluminium, steel, iron) will cause price increases of a range of finished products, which will further reduce the price competitiveness of our companies on the international market. Rising selling prices of a larger number of goods can be a source of new inflationary pressures that undermine macroeconomic stability.
The fact is also that Serbian goods produced with ‘dirty’ electricity will have increasingly less acceptance among buyers who pay more and more attention to strict environmental standards. It follows that reducing carbon intensity must become our national priority as soon as possible. The reason is not only climate goals, but the question of economic position in an environment where pollution is treated increasingly strictly,” says Dejan Molnar, professor at the Faculty of Economics.
Raiffeisen Bank in its monthly report also lists this levy as one of the factors that could influence inflation, carrying a risk.
“With respect to the effect on prices, it may be gradual (the tax is paid annually) and partly mitigated by competition and state incentives (tax credits, exemptions, technological incentives). So for now we take this factor into account, but we do not quantify it,” economists at Raiffeisen say.
How the system looks in Serbia
Serbia has not introduced CBAM in the sense in which it exists in the EU, explains Pantić from BOS. “What Serbia has introduced is a national carbon price tax, which is not the same legal or methodological instrument as the EU’s CBAM. CBAM is an EU import mechanism that the EU applies at its border. Serbia cannot ‘charge CBAM’; it can only introduce a domestic carbon price that the EU may later recognize when calculating CBAM obligations. CBAM charges are paid by EU importers, not directly by Serbian exporters.
The national carbon tax in Serbia is separate, but it could help to reduce part of the carbon cost if recognized by the EU,” Pantić says.
Specifically, importers buy special certificates for each tonne of carbon dioxide embedded in the imported product. These certificates are equivalent to emission allowances in the EU Emission Trading System (ETS) — on which CBAM prices are based. A tonne of greenhouse gases is currently charged between €80 and €90 per tonne, but this varies and could be more expensive in the future. The collected money goes into the budgets of the EU and member states.
If companies in the country of origin already pay a national tax, the CBAM amount is reduced by that amount — which for us would mean a reduction of €4, so if the price in the EU is, for example, €80 per tonne, a Serbian exporter will pay €76 there, and the mentioned €4 in Serbia.
Here the national law comes into play: it should reduce the amount of tax that EU importers will pay, currently by four euros, while gradually that should be aligned with CBAM itself.
