Yesterday I was digging into the VeChain and why the transaction numbers are not reflecting what one would presume they would be knowing the blockchain is being used for CBAM. CBAM stands for the Carbon Border Adjustment Mechanism that currently taxes carbon emissions imported and exported into and from the EU. The categories being taxed are iron and steel, fertilizers, cement, aluminum and energy. Other categories will be added this year and next year so this will be an ongoing growing list of products.
How this works is CBAM will release carbon certificates every quarter and these will vary in price. These are only due for payment one year later so this is like a credit that needs to be paid for later. The registered authorized declarants of CBAM will only purchase these carbon certificates from February 2027 which will cover their 2026 imports.
Energy is rather more complicated and why when i was researching struggled to find any figures and late last night stumbled upon the EU CBAM energy report. This as you will see is rather interesting and highlights that energy prices imported from certain parts of the EU were in some cases 3 x cheaper due to being hydro electricity and carbon free yet the price of energy has sky rocketed across the EU.
The point of having CBAM in place was to create a level playing field for imported goods protecting the EU economy by costing the carbon emissions imprinted in those items with a real cost or tax.
This report focuses and compares the Western Balkan 6 namely Montenegro, North Macedonia, Serbia, Bosnia and Herzegovina, Albania and Kosovo versus the EU neighboring states namely Hungary, Romania, Italy, Bulgaria, Croatia and Greece. What is interesting to note is the WB 6 is hydro electric heavy and in the first quarter were € 30/MWh lower than their EU competitors. The EU has not been able to benefit from the cheaper WB6 imports even though these imports are carbon free. CBAM has actually done the opposite of what it was supposed to do and that was promote carbon free products as CBAM's role is to protect the EU economy and businesses that lie within it's borders.
The EU energy producers rely on a heavy percentage of coal based power for their supply and thus are in an around about way penalizing clean hydro electricity. The people in the EU are not benefitting from the lower costs that is readily available due to protecting what is in place in the EU.
The daily prices that fluctuated highlight the shortcomings of CBAM with the WB6 pricing fluctuating between €40 and €150/MWh compared to the Hungary price of €120–180/MWh during the first quarter of 2026. Trading between the countries with a CBAM free tax would be beneficial to all members in the EU.
The key point above is that hydro electricity increased in every single country except for Italy (still biggest hydro energy producer) so the focus is definitely on green energy supply.
Time To Use Common Sense
This is still early days with CBAM and lessons need to be learned with what works and what does not as it is clear the importing of cheaper clean energy should be promoted and not penalized. Surely this benefits EU manufacturing plus the energy being used for manufacturing is carbon free so it is not being penalized through extra carbon taxes when exported.