Energy security, decarbonisation, and the integration of the Western Balkans’ energy markets with the European Union are among the top priorities when discussing European policies. The war in Ukraine, disruptions in supply chains, and the growing need for energy independence have further accelerated efforts to change energy sources. For this reason, the European Union increasingly views the Western Balkans as a strategically important part of the continent.
Arthur Lorkowski, Director of the Secretariat of the Energy Community - an institution playing a key role in linking the energy markets of the European Union and the region - speaks to EUpravo Zato about all these topics.
He explains why energy issues are now inseparably connected with geopolitics, how much progress Serbia has made in harmonising its legislation with EU law, and why diversifying energy sources is simultaneously a security and economic priority.
To what extent are today’s energy issues part of broader geopolitical dynamics in Europe?
"Today’s energy crisis clearly demonstrates the need for both Europe as a continent and Serbia, as a contracting party to the Energy Community, to deepen market integration while simultaneously accelerating decarbonisation. Integration brings two key advantages in times of crisis. First, larger and more interconnected markets allow energy produced in Europe to cross borders more easily, thereby strengthening Europe’s overall energy security and reducing vulnerability to external shocks. Second, integrated systems create stronger mechanisms for security of supply, enabling countries to share resources, coordinate responses, and jointly absorb disruptions."
What is your assessment of Serbia’s current level of alignment with EU energy legislation, and what steps should Serbia take in the coming period?
"Serbia has made significant progress in aligning with the EU’s energy and climate acquis, but it must now accelerate efforts across all three pillars of energy policy: security of supply, market integration, and decarbonisation. Parallel progress in all these areas will be essential if Serbia is to benefit from a more competitive market, greater resilience, and the investment opportunities that integration can bring.
When it comes to security of supply, Serbia has already seen the benefits of alignment with EU energy legislation, particularly through the establishment of strategic oil reserves. By the end of 2025, reserves had reached the equivalent of 51 days of import coverage, which enabled Serbia to carry out its first strategic release of around 40,000 tonnes of petroleum products to ease shortages on the market. The next priority should be reaching the full 60 days of import coverage required under the EU acquis, together with the urgent implementation of emergency preparedness and security-of-supply measures aligned with EU rules.
This should also include a clear plan for gradually phasing out restrictive emergency measures, such as export bans, and replacing them with predictable, rules-based mechanisms that protect supply without disrupting the regional market."
"Serbia has successfully completed the transposition of the European energy package"
Nikola Radosavljević, Serbia’s representative at the Energy Community meeting, also spoke about Serbia’s level of progress in this process. He emphasised that Serbia has successfully and fully completed the transposition of a package of nine EU regulations in line with the decisions of the Energy Community Ministerial Council in 2025.
"I would quote the Director of the Energy Community Secretariat, Arthur Lorkowski: ‘Serbia is a good example for other countries.’
These commendations are the result of serious work and harmonisation with Energy Community regulations, as well as the adoption of a national act related to the Energy Integration Package. We are a country that serves as an example to all Energy Community members in terms of alignment with EU energy legislation."
The best balance
The process of Serbia’s energy integration with the European Union is now entering an operational phase, with reforms in the gas and electricity sectors and climate policy progressing simultaneously.
"In the gas sector," Lorkowski continues, "Serbia recently took an important step towards greater integration with neighbouring markets and the opening of its own national market by granting a transmission licence to Transportgas Srbija, which should strengthen fair and transparent access to the network. The next milestone will be the implementation of EU gas network codes at Serbia’s borders, facilitating diversified cross-border gas flows that can mitigate future supply disruptions.
As regards electricity, the European Commission is expected in mid-May to decide whether Serbia has adequately transposed the legislation required to begin the process of integrating its electricity market with the EU. A positive opinion would open the next phase focused on technical and contractual readiness for market coupling. At the same time, Serbia should continue aligning its electricity market with EU standards. The recent introduction of negative prices on the day-ahead market represents a positive step in that direction and is important for improving market efficiency, as it will allow prices to better reflect real-time supply and demand conditions.
In the area of climate policy, Serbia has already progressed in two important areas: introducing a framework for carbon pricing and developing a monitoring, reporting and verification (MRV) system for emissions. However, the success of the transition will depend on Serbia’s ability to define a credible and implementable emissions reduction pathway, with clear policy measures, investment planning, and timely implementation.
At the same time, Serbia can further expand renewable energy capacities by building on the success of renewable energy auctions and including energy storage in future auction cycles. This would help reduce risks for private investment and provide the system flexibility increasingly needed as solar and wind power take on a larger role in the electricity mix. Energy storage will be crucial for balancing variability, reducing curtailment, and strengthening grid stability as Serbia moves towards closer integration with the EU electricity market."
To what extent is diversification of energy sources today a security issue, and to what extent is it an economic issue?
The economic and security benefits of diversifying energy sources are inseparably connected. This became especially evident during the current crisis: dependence on a single or limited number of suppliers - whether for electricity or gas - leaves isolated markets vulnerable when geopolitical turbulence disrupts supply, prices, or trade flows. The consequences can extend far beyond the energy sector, creating long-term destabilising effects on the broader economy through rising inflation, weakened industrial competitiveness, and increased pressure on public finances.
When combined with energy market integration, access to diverse energy sources at competitive prices becomes a key protective mechanism. It gives systems more options, reduces the risk of sudden shortages, limits exposure to price shocks, and helps ensure that businesses, households, and essential services can continue to function normally.
For the Western Balkans, diversification is therefore not merely a security imperative. It is also an economic necessity: the foundation for more resilient markets, more affordable energy, and stronger long-term competitiveness.
The Green Agenda for the Western Balkans
The Energy Community plays a key role in implementing the political and legal objectives of the Green Agenda for the Western Balkans. It provides a concrete framework through which the Green Agenda can be translated from political commitments into legal harmonisation, regulatory reforms, and practical implementation.
"The Energy Community is not merely a support platform, but one of the main instruments for implementing the Green Agenda through its legal framework and the broader logic of alignment within the EU accession process. By extending and adapting relevant parts of the EU’s energy, climate, and environmental acquis to the Western Balkans, the Energy Community helps ensure that the region’s green transition is based on rules, institutions, and market structures compatible with the EU.
Specifically, the Energy Community supports reforms relating to the development of renewable energy, electricity market integration, energy efficiency, preparedness for carbon pricing, emissions monitoring, air quality, and security of supply. All these areas are crucial for the operational implementation of the Green Agenda and for preparing the Western Balkans for deeper integration with the EU energy market.
At the same time, the Energy Community also serves as a platform for regional coordination, helping the economies of the Western Balkans align reforms, strengthen cross-border cooperation, and respond coherently to shared energy and climate challenges," Lorkowski explains.
Serbia’s next steps
When asked what the most important next steps for Serbia should be, Radosavljević replied:
"First and foremost, we expect the verification process of the transposition to be completed by the European Commission without delay and as soon as possible, so that Serbia can quickly begin implementing the Electricity Integration Package and take further steps towards market coupling.
We have already launched a project for electricity market coupling with Hungary. Another market coupling project between our country and Bulgaria is currently in the preparatory phase. This project has already been promoted by the national energy regulatory authorities of Serbia and Bulgaria, and a joint application has been submitted for the inclusion of the Bulgarian–Serbian bidding zone border in the IBWT (Italian Borders Working Table Project). A positive response is expected in the coming months."
(EUpravo zato)