Two years of continuous measurements of net ecosystem exchange (NEE) using the eddy covariance technique were made over a Mediterranean alpine shrubland. This ecosystem was found to be a net source of CO2 (+ 52 +/- 7 g C m(-2) and + 48 +/- 7 g C m(-2) for 2007 and 2008) during the two-year study period. To understand the reasons underlying this net release of CO2 into the atmosphere, we analysed the drivers of seasonal variability in NEE over these two years. We observed that the soil water availability - driven by the precipitation pattern - and the photosynthetic photon flux density (PPFD) are the key factors for understanding both the carbon sequestration potential and the duration of the photosynthetic period during the growing season. Finally, the effects of the self-heating correction to CO2 and H2O fluxes measured with the open-path infrared gas analyser were evaluated. Applying the correction turned the annual CO2 budget in 2007 from a sink (-135 +/- 7 g C m(-2)) to a source (+ 52 +/- 7 g C m(-2)). The magnitude of this change is larger than reported previously and is shown to be due to the low air density and cold temperatures at this high elevation study site.