Serbia became an AIB member in 2019 but as a non-EU country it needs a bilateral agreement with the bloc for mutual recognition of GOs as per the requirements of Art.19.11 of the RED II directive which states: 

“Member States shall not recognize guarantees of origins issued by a third country (such as Serbia, Switzerland, post-Brexit UK etc.) except where the Union has concluded an agreement with that third country on mutual recognition of guarantees of origin issued in the Union and compatible guarantees of origin systems established in that third country, and only where there is direct import or export of energy”.

EMS has previously stated that its work on such an agreement was completed and now the project was in the hands of the Serbian energy ministry.

EMS has been discussing the article’s provisions with the Association of Issuing Bodies (AIB) and ENTSO-e, an EMS representative said.

The parties were pushing for a comment to be added to RED II stating that “Art 19.11 needs to foster the participation and recognition of third countries in the European GO market and rather than a political agreement, exchange of GOs with non-EU/non-EEA countries, could be based on the fulfillment of technical and legal criteria to be installed in the country of concern, which guarantee avoidance of double counting of the same amount of energy with specific attributes“

Nevertheless, such comments were left out of the pre-final version of RED II.

In the meantime, EMS asked each AIB member to declare their stance on the acceptance of Serbian GOs. Some countries such as Portugal, Estonia, the Czech Republic, Croatia and Luxembourg have decided to accept guarantees of origin issued and exported from Serbia without evidence of an agreement between Serbia and the EU, according to an EMS representative.

Other AIB members have explicitly opposed such bilateral agreements, while others are still waiting for further instructions from the ministries in their respective countries.

“From the beginning of this year Serbia has started exporting GOs to several countries such as Switzerland, Italy etc. Before the exporting of our GOs we contact the Issuing Body of the country in which these GOs would be imported in order to see if the export can be completed,” the EMS representative said.

Serbia has exported 2.7TWh hydro GOs between 1 February - 30 April, according to Grexel data. This is almost double the total amount of issued Serbian hydro GOs in 2022 alone, suggesting that interest in the market is growing.

Some 5.9GWh solar GOs were also exported in the last three months, Grexel data shows. However, the majority of them were not issued in the country due to the very small amount of subsidy-free solar capacity. Instead, they were imported from another country and then re-exported, while others were issued in a previous period, EMS confirmed.

The Serbian GO market is dominated by state-owned utility EPS which owns 3GW of hydro capacity which generates around 10.5TWh per year. Most wind and solar producers are part of a support system and are not able to offer GOs.

EPS organises ad-hoc GO selling auctions but volumes and prices are kept confidential. Two market sources confirmed that the prices from those auctions tend to be at a discount to the EU.

The discount could be linked to uncertainty regarding the eligibility of exported Serbian GOs for disclosure in the rest of the EU member states given the lack of an agreement between Serbia and the bloc as per Art. 19.11 of the RED II.

The EU has not officially defined what such an agreement should look like but informal discussions suggest the counterparties would have to agree on a wider range of energy-related topics.

The recognition of Serbian GOs by some AIB members sets a precedent and puts into question the interpretation of Art.19.11 of RED II. GOs issued in Switzerland, another third country, stopped being accepted in the EU when the provisions of RED II came into force in July 2021.

This is despite Switzerland having one of the most sophisticated GO schemes and being one of the leading members of the AIB.The Swiss government has so far failed to secure an agreement with the bloc on mutual GO recognition amid divisions over an EU-CH inter-institutional framework agreement.

Meanwhile Serbia is by far the most advanced of all Contracting Parties of the Energy Community in regards to the transposition of the 2021 Clean Energy Package with many elements of the Governance Regulation, Renewables Directive and Energy Efficiency already transposed.

However, the Energy Community recommended in its 2022 implementation report that Serbia should focus, among others, on intraday market opening, full unbundling of the transmission system operator and allocation of interconnection capacities with the transmission system operator of Kosovo (KOSTT).

The latter one has been a contention issue for years which led to the Energy Community Secretariat opening a dispute settlement case against Serbia last year. The case was prompted by EMS not cooperating with KOSTT on coordinated cross-border capacity allocation and not making available the maximum capacity to market participants.

If this issue remains unresolved Serbia may have a hard time securing an agreement with the EU on mutual GO recognition.

While the export of Serbian GOs to some EU member states appears to be technically possible, it is unclear if those GOs will be accepted for disclosure and therefore cancelled within the EU market given the pending agreement between Serbia and the bloc.


If an agreement is not reached, the GOs are likely to end up in other third markets such as the UK and Switzerland, thus having a neutral impact on EU’s GO supply.

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Serbia has started exporting guarantees of origins (GOs) to some European markets, despite not yet having a bilateral agreement with the EU for mutual GO recognition. This puts into question the interpretation of third country market access rules in the Renewable Energy Directive (RED II).

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Serbia starts GO exports but EU deal still pending

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