Serbia is first Energy Community contracting party to enter verification phase of market coupling

Serbia is the first Energy Community contracting party to enter the verification phase of the market coupling procedure, the Energy Community Secretariat said after the annual meeting of the Ministerial Council in Vienna.

At the Energy Community Ministerial Council, ministers addressed energy security, market integration, climate policy, and environmental protection, confirming a shared EU–contracting parties direction for Europe’s energy future, according to the secretariat.

Ministers and representatives of the secretariat also discussed the amendments to the Carbon Border Adjustment Mechanism’s regulation revealed by the European Commission yesterday. The meeting was attended by European Commissioner for Energy Dan Jørgensen.

The secretariat underlined that several contracting parties are now approaching a decisive stage in electricity market integration ahead of accession, having fully or nearly transposed the Electricity Integration Package (EIP).

The two-step verification phase for Serbia kicked off on October 22

Subject to verification of compliance by the European Commission, this progress opens the door to electricity market coupling with the EU internal market ahead of accession, it added.

“Serbia has already entered the verification phase, while Moldova has fully transposed the package. In this context, ministers underlined that the CBAM, entering into force in January,  should not pose an issue for cross-border electricity trade,” the update reads.

Full electricity market integration ahead of accession offers a clear pathway to safeguarding decarbonization gains, supporting fair and efficient cross-border electricity exchanges, and attracting clean energy investment, according to the secretariat.

The two-step verification phase for Serbia kicked off on October 22. The first step is the verification by the secretariat, and the second by the commission.

The secretariat must complete the verification within three months, by January 22. The process is in the final stage, Balkan Green Energy News has learned.

The European Commission has five months to do its part

Once this is finished, the commission has five months to do its part. If the commission’s verification is positive, Serbia could meet the end-July deadline to apply for market coupling. The next phase involves technical activities, and it lasts 18 months.

“We are very deep in the process of verifying what Serbia has adopted. Now we are about to start this process for Moldova. And soon, I hope, after the remaining elements of the legislative package are adopted by Montenegro and North Macedonia, the verification can start in these two cases,” stressed Artur Lorkowski, Director of the Energy Community Secretariat.

He added that it has taken two decades of cooperation to build the momentum toward market coupling that ministers today have consolidated.

Lorkowski: The voice of the Energy Community ministers on CBAM has been heard by the commission

Regarding the European Commission’s amendments to the CBAM regulation, he recalled that, on behalf of the ministers, the secretariat has sent a list of 11 different issues that needed to be addressed.

“The voice of the Energy Community ministers has been heard by the commission, and the progress which has been made in the contracting parties has been recognized. We see that in different amendments which are proposed. The proposal is going in a good direction. If you ask me whether this is satisfactory and whether it solves all of the problems, no, for two reasons,” he underscored.

The first reason is that it requires time, and the damage will be done from January 1, 2026, when the CBAM implementation starts.

Jørgensen: A lot of progress has happened

“We already see that, for example, the allocations of the cross-border power lines between the contracting parties and the EU member states for next year are dropping significantly,” Lorkowski explained.

The second reason is the issue of completeness. “We are still not certain whether, for example, renewables in the contracting parties can be treated equally as those in the EU,” he said, and added that the secretariat is in communication with the commission on these issues.

According to European Commissioner for Energy Dan Jørgensen, it is clear that a lot of progress has been made in what will hopefully be future EU member states or neighbors, especially in the transposition of EU energy law.

Focus on four issues

According to the secretariat, the ministers further committed to advancing a coherent and predictable framework to sustain electricity market integration while creating the enabling conditions for the clean energy transition.

The secretariat highlighted four issues.

First, contracting parties will individually pursue national carbon pricing models according to their domestic circumstances, while work continues to explore coordination possibilities and ensure coherence between national carbon pricing systems in view of their gradual alignment with the EU ETS.

Second, the Energy Community framework will further incorporate core EU legislation on nature conservation, biodiversity, and water protection into the Energy Community Treaty.

Third, to keep momentum behind the rapid growth of renewables, the contracting parties will step up efforts to secure mutual recognition of guarantees of origin with the EU.

Finally, effective coordination and implementation of national energy and climate plans (NECPs) is critical, participants agreed.

The EU’s recent agreement on the 2040 climate targets sets a clear direction, and contracting parties must follow this pathway as they develop their long-term energy and climate policies, the update reads.