Albania and the EU Carbon Border Tax: Turning challenge into opportunity

Turning challenge into opportunity: CBAM can drive Albania’s green transition and deepen EU integration.

From 2026, the EU’s Carbon Border Adjustment Mechanism (CBAM) will apply to electricity and other sectors, impacting Albania’s exports. Although Albania’s electricity mix is already over 95% hydropower, the absence of a domestic ETS, full market coupling, and advanced monitoring systems could still lead to CBAM costs. Addressing these gaps requires institutional reforms, legal alignment with EU rules, and stronger technical capacities. By acting decisively, Albania can turn CBAM from a challenge into an opportunity to modernize its energy sector, attract investments, and strengthen its EU integration path.

Contents:

• What is CBAM and why does it matter?
• Albania’s green advantage and its limitations
• The legal and technical hurdles
• Institutional and regional challenges
• A Roadmap for Albania
• Turning a threat into an opportunity