June 17, 2025
by in News

NALED urges action to protect jobs at energy-intensive industries threatened by CBAM

The National Alliance for Local Economic Development (NALED) has called on the authorities to establish a regulatory framework that would shield Serbia’s energy-intensive industries from the impact of the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM), which threatens jobs and businesses employing about 7% of the country’s workforce and accounting for 11% of its GDP.

Once the EU starts taxing the import of high-emission products on January 1, 2026, exporters from Serbia will face an increase in the prices of their products on the EU market. Simultaneously, they will face unfair competition on the domestic market from third countries that have not introduced a national carbon pricing system, according to the National Alliance for Local Economic Development (NALED).

The entry into force of the Carbon Border Adjustment Mechanism (CBAM) means that a levy will be charged on imports of cement, iron, steel, aluminum, fertilizers, hydrogen, and electricity into the EU from countries that do not tax CO2 emissions. Although there is more and more talk about delaying the implementation of the tax, it would not make the problem of CO2 taxation disappear – it would only give the affected countries more time to prepare for the change.

NALED has completed an analysis of CBAM’s potential impacts

NALED warns that the introduction of CBAM could have a severely adverse and destabilizing impact on the competitiveness of Serbia’s energy-intensive industries, which requires an urgent and appropriate response from state institutions. NALED’s recently completed analysis of potential impacts of CBAM suggests a high risk of financial pressures and loss of competitiveness of Serbia’s energy-intensive industries, which employ about 7% of the country’s workforce and account for 11% of its GDP.

“To maintain the competitiveness of domestic industry in the initial stage of its green transition, it is necessary to provide mechanisms for reducing CO2 emissions as soon as possible through a set of national regulatory measures. After that, a national mechanism should be established that would include levying a carbon tax on domestic industry, along with a national CBAM mechanism, modeled after the EU’s, to tax goods from third countries where climate policies are less ambitious than Serbia’s,” says Slobodan Krstović, director of NALED’s Sustainable Development Department.

Revenues from CO2 taxation would be used to decarbonize Serbia’s energy-intensive industries

This would ensure a level playing field, in terms of costs related to CO2 emissions, for the sale of energy-intensive products on the Serbian market, as is the case in the EU.

Additional budget revenues that would be secured in this way would primarily be used for supporting the decarbonization of energy-intensive industries, Krstović added.

The analysis further shows that introducing a national CO2 tax at the carbon price projected for 2034 in the National Energy and Climate Plan (NECP) –about EUR 40 per ton – would cost the economy up to EUR 539 million a year, not including the electricity sector.

A domestic CBAM would bring an additional EUR 13 million in state budget revenues in 2027 and as much as EUR 128.6 million in 2034.

Serbia needs mechanisms to decarbonize energy-intensive industries

NALED believes that such a measure, which would channel revenues into Serbia’s budget instead of the EU coffers, would be sustainably justified if the state first introduced regulatory mechanisms to help industry reduce its CO2 emissions.

Given that CBAM and the Green Agenda are new regulatory factors, which have not been taken into account before when defining state aid rules, it is necessary to thoroughly review the existing regulations for granting state aid to companies, according to NALED.

Adapting the national regulatory framework to ensure mechanisms for the decarbonization of energy-intensive industries primarily involves liberalizing the import of alternative fuels and raw materials, banning the export of waste that can be processed in Serbia, and incentivizing the construction of new renewable energy capacities.

If the state fails to react, the domestic industry will face a serious threat

In the absence of state action, NALED warns, the projected decline in the cost efficiency of domestic industry would irreversibly jeopardize Serbia’s exports to the EU market, as well as its competitiveness on the domestic market due to a sharp increase in imports of CBAM goods from non-EU countries.

This would inevitably lead to the loss of a large number of jobs and the financial sustainability of the entire energy-intensive industry operating in Serbia, NALED concludes.

The authorities in Bosnia and Herzegovina recently estimated the economy’s potential loss due to CBAM at between BAM 722 million and BAM 3.17 billion (EUR 369 million to EUR 1.62 billion).

Post Views:50
June 11, 2025
by in News

ENTSO-E proposes delaying CBAM on electricity by one year

The European Network of Transmission System Operators for Electricity suggested to the European Commission to prolong the transitional period of the Carbon Border Adjustment Mechanism (CBAM) for electricity by one year, to January 1, 2027. It recommended an additional impact assessment, an analysis of possible exemptions for third countries as well as to exempt transmission system operators (TSOs).

In its new position paper, ENTSO-E supported the general principles of CBAM, but it warned against creating disproportionate administrative burdens and costs for TSOs. The pan-European body recommended exempting TSO activities from the CBAM scope, arguing there is a minimal risk of carbon leakage and pointing to their role in keeping the lights on and ensuring the security of the power system.

Moreover, ENTSO-E said an additional impact assessment is needed before the completion of the transitional period for electricity overall. The European Commission should also review in depth the list of third countries eligible for exemption, pending their adjustment to the European Union’s Emissions Trading System (EU ETS), it added.

The current criteria to calculate the actual emissions embedded in electricity production are impossible for importers to implement

“ENTSO-E encourages policy makers to use the targeted revision of CBAM part of the Omnibus simplification package on sustainability to postpone the definitive period as of 1 January 2027. It should also be noted that in its current form, the application of the provisions under CBAM regulation would have a major impact on the Energy Community countries and the UK imports,” the update reads.

Carbon leakage occurs when companies based in the EU move carbon-intensive production to countries with less stringent climate policies, or when EU products get replaced by more carbon-intensive imports.

CBAM was devised to bring CO2 prices for imported cement, iron and steel, aluminum, fertilizers, hydrogen and electricity to the same level as in EU ETS. Under the current rules, the EU will start charging CBAM at the beginning of January next year and gradually increase the tariffs to reach 100% at the start of 2034.

No provisions regulating implicit electricity trading

ENTSO-E acknowledged the role of the carbon border tax in putting a fair price on carbon emissions from carbon-intensive goods entering the EU, and to promote cleaner industrial production globally. Nevertheless, there are still many questions even about the current reporting obligations, it pointed out.

“TSOs adjacent to EU external borders are the most exposed to the concerns raised in this paper. It concerns a significant number of ENTSO-E members, almost one third of the EU members of the association,” the paper adds. In specific cases, the measures may also lead to efficiency losses, reduce EU competitiveness and reduce incentives for building and connecting offshore wind, it underscored.

Obstacles to importing electricity from third countries could contradict the goal of efficiently importing cheap green electricity

CBAM only assumes that electricity is traded with third countries through explicit allocation, not taking into account implicit trading. Like implicit electricity trading within the internal electricity market, there is no nomination on the interconnectors, only anonymous trading between markets, ENTSO-E explained.

“These obstacles to importing electricity from third countries could contradict the goal of efficiently importing cheap green electricity into the EU if applied also to third countries with robust decarbonisation policies and renewable energy sources. The current criteria to calculate the actual emissions embedded in electricity production make it impossible for importers to implement, mainly due to impossibility to trace the origin of the electricity,” the TSO network stressed.

CBAM would tax historical instead of actual emissions

The current default CO2 levels are based upon the carbon intensity of the five-year average through 2020, even though third countries made tremendous efforts in decarbonising their energy mix in the meantime, according to ENTSO-E. It suggested allowing such countries to be exempted if they verify their progress through proper data platforms.

ENTSO-E invited the European Commission to envisage a revision aligned with the current delay in CBAM implementing acts, stressing that it is impossible for the market to digest them before the end of the year.

Energy Community contracting parties, including the Western Balkans, are eligible for exemption from CBAM on electricity until 2030. The condition for each one is to couple its electricity market with an EU neighbor.

Post Views:68
April 6, 2025
by in News

Turkey-based Yıldırım building 109 MW solar park in Kosovo* for its ferronickel plant

Yıldırım Energy laid the foundation stone in Kosovo* for the first phase of its 150 MW solar farm. The Turkish company intends to produce electricity for its ferronickel plant, which exports its entire output.

A renewable energy investment of more than EUR 43 million is underway in Gllogovc (also known as Glogovac and Drenas). Yıldırım Group’s subsidiary Yıldırım Energy marked its expansion to Kosovo* by inaugurating the construction works on a 109 MW solar park.

The facility will reduce electricity costs and facilitate sustainable production at the NewCo Ferronikeli plant, its General Manager Cemil Acar said. The ferronickel production complex exports all its products, he pointed out. The photovoltaic plant is due to come online early next year, he revealed.

Company’s solar park is among largest ones in construction in Western Balkans

Using renewable energy in production would enable the group to be exempted from paying the European Union’s CO2 import levy, imposed through the Carbon Border Adjustment Mechanism or CBAM. Ferronickel is a ferroalloy, consisting of iron and nickel.

With the new photovoltaic plant, the group will get cheap electricity for its production lines and it can also exempt it from the EU’s carbon border tax system

Separately, the government in Prishtina said the first section of the solar power plant would have over 54 MW in capacity. The company’s target is to reach 150 MW by 2026, it added. It would make it the biggest in the Western Balkans so far, though Solar Energy Group Europe (SEGE) said a year ago that it launched the construction of an agrisolar power plant of 150 MW in peak capacity in Gjakova (Đakovica), also in Kosovo*.

The Ministry of Economy recently completed its first solar power auction, for a plant of up to 117 MW in peak terms. In comparison, government-controlled power utility Kosovo Energy Corp. (KEK) has a PV project of 120 MW underway. The facility will be built at a former ash dump of its Kosovo A power plant.

Energy crisis knocked out Ferronikeli in 2021

NewCo Ferronikeli resumed production last June after a break of almost two years. It was caused by a surge in electricity prices amid the energy crisis. The group entered ownership in 2022.

Yıldırım Energy trades power and gas, conducts electrification services and produces renewable energy, focused on hydropower, solar and wind. The firm is building a solar panel plant in Kocaeli in Turkey, according to its website. It also operates in North Macedonia and Albania.

The group, founded in 1963, is active in 57 countries. Its operations are based in Istanbul and the financial headquarters are in Amsterdam.

Post Views:969
* This designation is without prejudice to positions onstatus and is in line with UNSCR 1244/99 and the ICJ Opinion on the Kosovo declaration of independence.
  • 1
  • 2