October 30, 2025
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North Macedonia launches decarbonization guide for small businesses

The Economic Chamber of North Macedonia has developed the country’s first decarbonization guide for small businesses. The digital tool is intended to help North Macedonia’s economy adapt to international climate rules, including the European Union’s carbon border tax (CBAM).

The decarbonization guide provides detailed instructions on the most effective ways for local companies to reduce their carbon footprint as part of the global fight against climate change, according to the Economic Chamber of North Macedonia.

The key feature is a carbon footprint calculator that covers nearly 60 different energy sources and refrigerants. Information is also available on EU and domestic climate regulations, as well as funding opportunities, such as subsidies.

The platform offers practical case studies and success stories of leading companies to highlight the benefits of clean energy, according to the chamber.

Božinovska: The decarbonization guide marks a turning point in the country’s green transition

The guide was developed in cooperation with the advisory team of the European Investment Bank (EIB) and the Delegation of the EU to North Macedonia.

The guide was presented in the country’s capital, Skopje, at a gathering attended by more than a hundred entrepreneurs from all sectors of the North Macedonian economy.

Sanja Božinovska (photo: Economic Chamber of North Macedonia)

“The decarbonization guide is a turning point in our country’s green transition, equipping businesses with the tools they need to act now,” said Sanja Božinovska, North Macedonia’s Minister of Energy, Mining and Mineral Resources.

The guide is designed to help companies reduce greenhouse gas emissions and adapt to international climate rules, while, as the chamber says, preserving competitiveness.

One of these rules is the EU’s tax on the import of carbon-intensive goods, the Carbon Border Adjustment Mechanism (CBAM), which is set to take effect on January 1, 2026.

The guide is available on the website of the Economic Chamber of North Macedonia

This digital tool will help North Macedonia move towards a low-carbon economy, the chamber added.

The guide is available on the chamber’s website in the form of an interactive platform. Its development was financed by EIB Global.

Björn Gabriel, Head of EIB Representation in North Macedonia, has said that the guide comes at a crucial time as North Macedonia advances its green transition and prepares for upcoming carbon regulations.

According to Head of the Delegation of the EU to North Macedonia Michalis Rokas, decarbonization, energy efficiency, and renewable energy sources are powerful tools for building a more innovative, resilient, and competitive economy.

If every small and medium-sized enterprise (SME) takes at least a few significant steps toward greener business practices, the combined impact on more than 68,000 firms will be truly transformative, claims Rokas.

Michalis Rokas (photo: Economic Chamber of North Macedonia)

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October 30, 2025
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Energy Community’s CBAM Readiness Tracker: Western Balkans still far from exemption as full implementation nears

With less than three months remaining until the European Union’s Carbon Border Adjustment Mechanism (CBAM) is fully implemented, none of the Energy Community’s contracting parties has yet qualified for an exemption in the electricity segment, according to the 2025 CBAM Readiness Tracker. However, the Energy Community’s report suggests that efforts to meet the are gaining momentum, with Serbia, Moldova, North Macedonia, and Montenegro leading the way to market coupling with the EU, and almost all contracting parties planning to introduce carbon pricing.

These efforts signal a growing readiness across the Energy Community to turn CBAM into a catalyst for deeper regional energy market integration and decarbonization, according to the annual report.

“The progress reflected in this year’s tracker underlines that CBAM can drive – not deter – regional cooperation on the energy transition,” Energy Community Secretariat Director Artur Lorkowski stressed and added that the scheme should “serve as a bridge into the EU, not a barrier.”

Lorkowski: CBAM should serve as a bridge into the EU

Starting on January 1, 2026, the EU will charge fees on the CO2 emissions of goods imported from countries that don’t apply matching carbon pricing schemes. In addition to electricity, the carbon border tax will cover cement, iron and steel, aluminum, fertilizers, and hydrogen.

Serbia faces the highest exposure to CBAM costs

Estimates based on 2024 data show the CBAM exposure of EU electricity importers could reach around EUR 1.17 billion a year. Serbia accounts for the largest share, with an estimated EUR 612.5 million in annual CBAM costs, followed by North Macedonia, with about EUR 200 million, Montenegro, EUR 190 million, and Bosnia and Herzegovina, EUR 158 million. Moldova’s exposure is about EUR 6 million, while Albania, which has an electricity mix almost entirely dominated by renewables, faces no CBAM-related costs, according to the report.

The estimated average CBAM cost per megawatt-hour is EUR 33.14 for Moldova, EUR 59.71 for North Macedonia, EUR 62.45 for Montenegro, EUR 66.71 for Serbia, and EUR 73.37 for Bosnia and Herzegovina.

The criteria for a CBAM exemption for electricity include integrating the power market with the EU and introducing a carbon pricing system. A contracting party must also adopt EU regulations on energy, electricity, environment, and competition, increase the share of renewables in its energy mix to align with the EU’s 2030 targets, commit to climate neutrality by 2050 and submit a related roadmap to the EU, and implement measures to prevent indirect electricity imports from non-compliant countries.

Advances evident in emissions, renewables, and market coupling

The 2025 CBAM Readiness Tracker shows that last year alone, carbon intensity across the contracting parties’ power sectors fell by an average of 11%. At the same time, capacity from renewables, excluding large hydro, surged to 5.1 GW from 2 GW between 2020 and 2024. The expansion was driven almost entirely by solar and wind, helped by renewable energy auctions.

When it comes to electricity market integration, no contracting party has completed market coupling with the EU. However, Serbia, Moldova, North Macedonia, and Montenegro are approaching a “point of no return,” which represents a full transposition of EU regulations relevant for market coupling, according to the tracker.

The energy transition unfolding across the Energy Community contracting parties is both tangible and measurable, Adam Cwetsch, Head of the Green Deal Unit at the Energy Community Secretariat, told Balkan Green Energy News. “Carbon intensity in electricity production and economic output continues to fall, while renewable energy deployment accelerates through competitive auctions. This progress reflects a clear commitment to European decarbonisation goals and lays the foundation for deeper energy market integration and long-term climate neutrality,” he stressed.

The secretariat remains committed to ensuring the process continues smoothly – without obstacles from possible unintended impacts of CBAM, Cwetsch said.

Even though no contracting party has introduced a carbon pricing instrument for electricity, almost all of them have outlined plans to establish domestic systems that reflect their specific circumstances.

“This is a crucial step toward alignment with the EU’s carbon pricing framework under CBAM. The rollout of monitoring, reporting, and verification systems across the region is laying the groundwork for implementation and demonstrates growing readiness and credibility, even as timelines remain tight and challenges persist,” Cwetsch stated.

Available carbon pricing models are carbon taxes, ETS and a combination of the two

The available models are a carbon tax, an emissions trading system (ETS), and a hybrid version. The only contracting party that has no plans to introduce carbon pricing is Kosovo*, according to the report.

All contracting parties have concluded agreements to apply EU law in the fields of energy, electricity (including renewable energy), the environment, and competition. In each of them, the implementation of renewable energy legislation is either underway or showing visible progress, the report shows.

No Western Balkan country has included the EU’s 2050 climate goals into national legislation

On the other hand, Ukraine and Moldova are the only ones that have included the 2050 climate neutrality objective in national legislation, while no contracting party has submitted a corresponding roadmap to the EU.

Another requirement that no one has yet fulfilled is the establishment of an effective system to prevent indirect import of electricity into the EU from other third countries or territories that do not meet the CBAM exemption criteria for electricity.

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* 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.
October 13, 2025
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Đokić: We expect EU to accept request to postpone CBAM implementation

Minister of Energy and Mining of the Republic of Srpska Petar Đokić expressed belief that the European Commission would postpone the implementation CBAM, set for January 1, 2026.

Minister Petar Đokić participated in the Energy Week Western Balkans 2025 conference, where he recalled that the Republic of Srpska has signed several contracts with domestic and foreign partners for the construction of renewable power plants totalling 2,170 MW. The investments are estimated at BAM 5 billion (EUR 2.56 billion).

Đokić noted that the construction of two hydropower plants, of 159 MW and 34 MW, is underway, as well as of the Buk Bijela hydropower plant, in cooperation with Serbia.

Đokić: The rest of the world no longer follows European politics

So far, two contracts have been signed for the construction of wind farms, of which one is in an advanced stage of construction, he underlined. The plan is to complete all contracted projects within three years, according to Đokić.

It will further increase the share of clean energy in total production.

He highlighted the challenges posed by the European Union’s policies, including the Carbon Border Adjustment Mechanism (CBAM), a cross-border emissions tax. Its application could have a very negative impact on the local economy, Đokić noted.

As the rest of the world no longer follows European policies, the question arises whether Europe has the right to impose new obligations on its members, especially if such obligations cause economic disruptions, he claimed.

Đokić: The request of the Republic of Srpska to postpone the implementation of CBAM is justified

Đokić said that the request of the Republic of Srpska to postpone the implementation of CBAM is justified. According to him, Bosnia and Herzegovina has fulfilled the last condition, the adoption of the law on the electricity regulator, transmission, and market, as it is now in parliamentary procedure.

CBAM brings fees on the CO2 emissions of goods imported to the EU from countries that don’t have equivalently priced carbon schemes. They include the Western Balkans.

The tax will cover cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen.

Serbia, which is also part of the Western Balkans region, launched public consultations last week on its draft Law on Greenhouse Gas Emissions Tax and the Law on Carbon-Intensive Product Imports Tax.

Đokić spoke at a panel with Minister of Energy and Mining of Montenegro Admir Šahmanović, Ambassador of Italy to Montenegro Andreina Marsella, President of the Energy Agency of the Republic of Serbia (AERS) Dejan Popović, and co-founder and managing partner of Alcazar Energy Daniel Calderon.

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October 3, 2025
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Serbia proposes taxes on greenhouse gas emissions, imported carbon-intensive products

The Ministry of Finance of Serbia launched public consultations on the draft Law on Greenhouse Gas Emissions Tax and Law on Carbon-Intensive Product Imports Tax, both at EUR 4 per ton of CO2 equivalent.

On January 1, importers of electricity, cement, iron and steel, aluminum, hydrogen and fertilizers to the European Union will start paying the CBAM carbon dioxide tax. If the country of origin also has a CO2 pricing system and the EU recognizes it, the sum will be deducted from CBAM.

The greenhouse gas emissions tax won’t be a new fiscal burden, but an incentive for modern and cleaner production, the Ministry of Finance of Serbia stressed in its public consultation call on what it said would be two key laws for the country’s green transition. It intends to charge producers and importers of certain goods EUR 4 per ton of CO2 equivalent.

The draft Law on Greenhouse Gas Emissions Tax and draft Law on Carbon-Intensive Product Imports Tax are intended to lower pollution, improve energy efficiency and secure a more equal position for the Serbian industry in the domestic and international markets, according to the announcement.

The public consultation process lasts until October 21, the deadline for submitting comments and suggestions. Presentations and discussions are scheduled for October 8 and October 15 in Belgrade, and online meetings are to be held on October 10 and October 17.

Both laws to enter into force on January 1, when EU also starts charging CBAM

The first of the two taxes is for big industrial emitters in the sectors of cement, fertilizers, iron and steel, aluminum and electricity. The ministry added that it is targeting January 1 for both laws to come into effect.

On the same date, the EU is set to start charging its Carbon Border Adjustment Mechanism (CBAM) tax on imported electricity, the other said goods as well as hydrogen. If the country of origin also taxes CO2 and the EU recognizes its system, the sum that was paid will be deducted from CBAM.

The CBAM tax is envisaged to rise every year until in 2034 it becomes equal as the prices of grenhouse gas emission certificates in the EU’s Emissions Trading System (EU ETS). Of note, the plan is also to expand the mechanism to other segments that EU ETS covers. The price has held above EUR 75 per ton of CO2 equivalent in the past month.

Institutional infrastructure isn’t sufficiently developed to roll out domestic ETS

The draft Law on Carbon-Intensive Product Imports Tax, envisaged as an equivalent to CBAM on the home market, doesn’t include hydrogen (and neither does the other draft), due to negligible production, while electricity wasn’t included because of technical limitations and a lack of a precise taxing methodology, the ministry explained.

The tax on imported carbon-intensive products would cover only the entities that import more than five tons of the designated products per year

Importers would be taxed based on emissions embedded in the production of the goods from abroad, but they will be able to use tax credits if an emissions levy has already been paid in the country of origin, similar to the EU system. The obligation is only for companies importing more than five tons of designated products per year.

The government opted for a tax instead of an ETS because “an emissions trading system requires a developed institutional infrastructure and market mechanisms that currently aren’t completely established,” an accompanying document reads.

Importantly, an independent verification system is under development.

The taxes would cover CO2, nitrous oxide (N2O) and perfluorocarbons (PFCs).

CO2 tax scope limited to certain larger producers

The ministry pointed out that the draft law wasn’t made to be applied extensively, but only to the firms obligated to have a license for emissions from their plants. Mostly they are large and medium-sized companies. The increase in administrative expenses would be limited, as the entities in the group already measure emissions data, in line with the Law on Climate Change, and send them to the Ministry of Environmental Protection.

The production of synthetic fertilizers and nitrogen compounds, cement, pig iron, steel and ferroalloys, aluminum and electricity accounts for over 57% of emissions in Serbia and more than 90% within the national monitoring and reporting system.

Tax deductions for large electricity producers that invest in decarbonization

A payer of the greenhouse emissions tax that predominantly generates electricity, accounting for at least 80% of its income in the previous annual tax period, is eligible for a tax credit amounting to 20% of the sum that it invested in decarbonization measures, the draft shows.

The deduction wouldn’t exceed 80% of the due tax. The government determines the said measures.

The draft greenhouse gas emissions tax envisages incentives for the taxpayers to finance green projects, the just transition and protection of vulnerable households

In addition, entities that pay the tax would be eligible for incentives, from the state budget, for financing climate and energy transformation through investing in renewables and energy efficiency, innovative low-carbon technologies, decarbonization of industrial production, green construction and support to the just transition and protection of vulnerable households.

In the short term, the new fiscal obligation can cause a moderate increase in production costs for facilities with significantly high emissions, the ministry said. Then there is a possibility, over the long term, for a moderate indirect effect on prices of some products, like construction materials and energy, but it would be limited and gradual, the law’s authors claim.

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September 9, 2025
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EU mulls steps to prevent bypassing of CBAM

The European Commission plans to propose measures by the end of the year to prevent exporters to the European Union from avoiding the bloc’s carbon border tax.

Brussels fears exporters from third countries could ship low-emission goods to the EU, while selling high-carbon products in other markets, without reducing their overall emissions, Reuters reported.

The Carbon Border Adjustment Mechanism (CBAM), set to come into force on January 1, 2026, will impose fees on the CO2 emissions of goods imported to the EU from countries without a carbon pricing scheme. The tax will cover cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen.

The carbon border tax is expected to severely affect the EU’s neighbors, including the Western Balkan countries.

CBAM could be extended to other products

The European Commission is concerned that CBAM could be bypassed if foreign firms redirect their low-carbon products to Europe while still producing high-carbon goods for export to other markets. This way, they would avoid the EU’s carbon border tax without actually reducing their overall emissions.

To address the problem, the EU executive intends to propose extending CBAM to other products, a European Commission spokesperson has said, according to Reuters.

Imported goods could be given a fixed emissions value per country or per company

The Commission is also considering a system under which goods are given a fixed CO2 emissions value per country or per company rather than calculating specific emissions per shipment, Reuters reported, quoting an unnamed senior EU official.

According to the news agency, the official also hinted that Chinese exporters could potentially attempt to circumvent CBAM in this way.

Exporters from these countries are struggling to adjust to the new system, especially in the electricity sector, and have requested a postponement of CBAM.

However, the administration in Brussels is not willing to consider delaying its implementation date.

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September 1, 2025
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Energy Traders Europe calls for clear rules before CBAM implementation

Energy Traders Europe has sent proposals to the European Commission on how to ensure that the Carbon Border Adjustment Mechanism puts a fair price on carbon-intensive electricity imports and facilitates low-carbon flows.

On July 1, the European Commission’s Directorate-General for Taxation and Customs Union launched a public consultation on the potential downstream extension of the Carbon Border Adjustment Mechanism (CBAM), as well as additional anti-circumvention measures and rules for electricity as a CBAM good.

Energy Traders Europe participated in the call for evidence, which was open until August 26. The organization pointed out that the CBAM application to electricity imports shouldn’t start without a thorough impact assessment and a clear legislative framework.

Clarity is urgently needed for contracts for the delivery year 2026

Contracts for the delivery year 2026 are already traded on electricity markets, so clarity about how these will be treated from a customs perspective is urgently needed, the trade association stressed.

In its reaction, Energy Traders Europe argued that the inclusion of electricity imports within the scope of CBAM should respect the principle of proportionality, ensuring that European businesses face no excessive costs or administrative burdens and that a proportionate carbon price is applied.

For the calculation of the carbon price, default emission factors should reflect the actual carbon intensity of the electricity mix imported from a third country, as accurately and as close to real-time as possible.

Therefore, Energy Traders Europe insists that:

  • All generation technologies are taken into account to calculate the emission factor of third countries from which electricity is imported
  • The carbon intensity of electricity imports should be measured with an hourly granularity.

The association also proposes improvements for the utilization of the actual embedded emissions of imported electricity, to reflect the reality of electricity trading:

  • Power purchase agreement (PPA) – The definition should recognise PPAs concluded via intermediaries, such as when a CBAM declarant is reporting via an indirect representative, as well as both physical and virtual PPAs
  • Physical network congestion – Once an importer can prove the hourly matching between electricity production and capacity nomination, and that guarantees of origin (GOs) eventually issued are immediately cancelled, this criterion becomes redundant and hence should be removed
  • Capacity nomination and electricity production – Imports should be reported (and accounted for) based on the hourly confirmed scheduled quantities provided by the TSOs to each market participant, to be linked back to the hourly data of the generation plant underpinning the PPA.

According to Energy Traders Europe, the listed improvements are crucial to ensure that CBAM is fit for purpose for electricity imports, leading to more efficient use of cross-border interconnections between the EU and third countries, preventing renewable curtailments, and promoting the uptake of low-carbon electricity production in third countries.

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August 20, 2025
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Šahmanović: Montenegro expects first large private wind and solar plants to be online in 2026

Over the past year, Montenegro has adopted two reform laws – on energy and on renewable energy sources – and scheduled its first auctions for market premiums. Admir Šahmanović, Minister of Energy and Mining, told Balkan Green Energy News that the new regulations fully align the sector with the European Union acquis, sending a clear signal to investors that Montenegro now has a stable regulatory framework and market-based prices that safeguard citizens’ interests. Becoming part of the European energy space, he added, is not only a political goal but also the path Montenegro should follow to ensure cleaner and more secure energy for future generations.

Admir Šahmanović served as Minister of Mining, Oil and Gas in the government of Prime Minister Milojko Spajić. In February this year, he became the coordinator of the Ministry of Energy, and since April, he has served as Montenegro’s Minister of Energy and Mining. In an interview with Balkan Green Energy News, Šahmanović discusses his plans to mobilize larger investments, Montenegro’s timeframe for coupling its electricity market with Italy and the EU, the ministry’s steps to prepare the country for the EU’s carbon border tax, and plans for investments in the natural gas sector.

What are the key innovations introduced by Montenegro’s law on renewable energy sources?

The law on renewable energy sources introduced, for the first time, a clear, competitive and fully transparent support mechanism for green energy production – an auction scheme.

Over the past months, we have worked hard to ensure the law really takes hold. We have prepared about 15 by-laws that enabled us to launch the first auctions. I believe this is one of the most important contributions of the new law, as it sends a clear message to investors that Montenegro has a stable framework and market-based prices that safeguard citizens’ interests.

In this way, we are laying a solid foundation for a rapid energy transition, which is both our strategic choice and our responsibility to future generations.

Montenegro has also adopted a new law on energy. What does this regulation bring?

The Law on Energy is our umbrella regulation, providing a framework that fully aligns the sector with the EU acquis. It introduces stricter standards, greater protection of end consumers, better competition, and stronger institutional oversight.

It also opens Montenegro’s energy sector to the European market and creates a stable, predictable environment. This is important not only for investors but also for all consumers, as people are ultimately the ones affected by any change in the system.

You stated that these reforms set a clear strategic path for Montenegro, which sees its energy future within the European market. What will this future bring to Montenegro, its economy, and its citizens?

Our ambition is to make Montenegro a country with clean energy and a stable system. Being part of the European energy space ensures greater security of supply, lower costs in the long term, and a strong inflow of investments. Our economy will have access to a larger market, and our citizens will benefit from safe, sustainable, and environmentally friendly energy.

It is not just a political goal – it is a path I want us to follow in our development, so that we leave our children a country with cleaner and more secure energy.

Admir Šahmanović visiting northern Montenegro with EPCG Director Ivan Bulatović

Applications have been invited for Montenegro’s first auctions for market premiums. What benefits do you expect from auctions?

The auction mechanism allows us to select the most favorable and serious investors through a fair and competitive process. Projects are implemented without budget subsidies and with minimal risk to the state.

We expect auctions to ensure new capacities, create jobs, improve the use of our natural resources, and strengthen overall energy stability. These are the benefits citizens will feel, both on their electricity bills and through new opportunities that will open up in local communities.

Investor interest in wind and solar is strong, with requests to build power plants totaling around 5.5 GW. When do you expect these projects to be realized?

Such strong interest is the best proof that the reforms are yielding results. We expect the first large projects to be online in 2026, with significant capacities ready by 2030. Transparent procedures, good cooperation with local communities, and improved grid infrastructure will be key to making these investments a reality.

What are the main obstacles to these projects? How to remove them?

The biggest challenges are administrative procedures, transmission network limitations, and spatial planning documents. We are working to address them through interdepartmental cooperation, digitalization of processes, and the state’s commitment.

We are strengthening capacities, speeding up permitting, and modernizing regulations. I want to ensure that investors coming to Montenegro know they can work in a clear, predictable, and fair environment.

Admir Šahmanović at the ministerial panel at Belgrade Energy Forum 2025 in May

Preparations are underway to link Montenegro’s electricity market with the EU via Italy, with 2027 featuring as the target year.

Yes, we are working diligently on institutional and market integration. This involves harmonizing the rules, passing the remaining by-laws, and preparing the market operator. With the support of the EU and the Energy Community, I am confident that 2027 will remain the year when we will fully open our market to Europe.

All countries in the region are facing CBAM. How prepared is Montenegro?

CBAM will change the rules for electricity exports to the EU, bringing new costs as well as opportunities. We are aware that it will be a financial burden on our economy, but that is precisely why we view it as an additional incentive to accelerate the implementation of renewable energy projects and increase our own production of green electricity.

We are working on adjusting the regulatory framework, harmonizing economic activities, and ensuring the largest possible share of clean energy to remain competitive and maintain full access to the European market while reducing emissions.

Montenegro also has ambitious plans in the natural gas sector – a gas pipeline, a terminal for liquefied natural gas (LNG), and gas-fired power plants. How far along are these projects?

I see gas as a development opportunity – to ensure greater security of supply, diversification, and new opportunities for the economy. But I also believe that such strategic projects must be developed through dialogue with local communities, with full respect for their views.

We are currently preparing and developing the Ionian Adriatic Pipeline (IAP) project and assessing the potential for an LNG terminal. We are doing this responsibly, one step at a time, and in line with the EU’s energy transition goals.

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August 6, 2025
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Federation of BiH prime minister says ETS could be introduced by end-2025

State institutions of Bosnia and Herzegovina and one of its two political entities, the Federation of BiH, will take joint steps aimed at introducing an emissions trading system by the end of the year, according to Nermin Nikšić, the entity’s prime minister.

According to Nikšić, the European Union’s carbon border tax, which is set to take effect on January 1, 2026, poses a serious challenge that demands swift and decisive action at the state level to protect thousands of jobs and prevent a dramatic drop in BiH’s industrial exports, the Fena state news agency reported.

Nikšić announced joint activities by entity and state institutions aimed at establishing an emissions trading system (ETS) by the end of 2025.

With the full rollout of the Carbon Border Adjustment Mechanism (CBAM) at the beginning of next year, importers in the EU will pay a tax on cement, iron, steel, aluminum, fertilizers, hydrogen, and electricity from countries without CO2 pricing systems. It applies to Bosnia and Herzegovina as well as other countries of the Western Balkans.

Nikšić: To maintain exports to the EU, Bosnia and Herzegovina must urgently establish a framework recognized by the bloc

To maintain its exports to the EU, BiH must urgently establish a framework that the bloc recognizes, Nikšić explained. He recalled that BiH is the only country in the region without an electricity exchange, and said it is time for all levels of government to act jointly and responsibly.

FBiH Minister of Energy, Mining and Industry Vedran Lakić expressed the belief that the best way for Bosnia and Herzegovina to protect its economy and keep carbon tax revenues for itself is to establish its own emissions trading system. Without such a scheme, he warned, tens of millions of euros will end up in the EU budget

The revenues would be used to modernize production facilities, reduce emissions, and speed up the green transition, said Lakić.

According to him, the ministry is preparing financial support, through the FBiH Development Bank, for businesses that decide to install solar panels. This, he claims, will enable them to produce electricity for their own needs and avoid CBAM.

Hope dies last

Bosnia and Herzegovina and Montenegro have requested delaying the CBAM implementation, as did the European Network of Transmission System Operators for Electricity (ENTSO-E), but the EU confirmed it would proceed as planned. The Energy Community Secretariat pointed out that none of its contracting parties, including Western Balkan countries, would be able to get an exemption for electricity before the tax begins to be charged.

As January 1 is just months away, CBAM’s impact will become clear relatively soon. In Serbia, the National Alliance for Local Economic Development (NALED) recently warned that the carbon border tax would threaten jobs and businesses that employ about 7% of the country’s workforce and account for 11% of its GDP.

In Bosnia and Herzegovina, an official analysis has shown that CBAM could cost the country’s economy between EUR 369 million and EUR 1.62 billion through 2030.

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August 4, 2025
by in News

Serbia adopts Just Energy Transition Plan until 2030

Serbia now has a Just Energy Transition Plan until 2030. The document contains suggested measures for the mitigation of the impact of reducing fossil fuel use, primarily coal, so that workers, firms and communities aren’t left behind.

Following last month’s completion of the public consultation process regarding the proposed Just Transition Action Plan, the Government of Serbia passed, at its last session, the Just Energy Transition Plan of the Republic of Serbia until 2030. The document leans on the Integrated National Energy and Climate Plan (INECP or NECP)

It lays out sustainable energy policy measures that would need or could be undertaken. The point is in reducing fossil fuel dependence and improving security and efficiency of electricity supply by switching to renewable energy sources, and in an energy efficiency boost.

A just transition aims to promote environmentally sustainable economies in a way that is fair and inclusive for all

“A just transition aims to promote environmentally sustainable economies in a way that is fair and inclusive for all – workers, businesses and communities – by creating opportunities for decent work and leaving no one behind. This initiative should not be seen as a fixed set of rules, but as a dynamic process based on dialogue with a focus on addressing the concerns and needs of local populations and affected stakeholders,” the plan reads.

The approach is based on mitigating the negative effects of the energy transition process. It implies significant investments in retraining and reskilling, to assist workers in adjusting to new industries, as well as education, the plan adds.

It highlights the importance of incentivizing the development of new industries, and supporting small and medium-sized enterprises, which can enable alternative sources of income and employment.

Electricity system collapse in December 2021 marked as turning point?

Until December 2021, domestic electricity production met domestic needs, although even before that, the power system had been making maximum efforts for many years to provide sufficient amounts of electricity or, rather, provide sufficient amounts of coal for the operation of thermal power plants, the document notes.

There is no elaboration on the time reference, but that’s when a major outage struck coal-fired thermal power plants of state-owned power utility Elektroprivreda Srbije (EPS). Of note, it was one in a string of serious incidents in the electricity system.

Coal plants are old and they mostly don’t comply with environmental standards

“The fact is that existing electricity generation plants are old and most of them are not in line with new operating conditions and standards when it comes to environmental protection. Therefore, it is quite clear that in the case of the Serbian energy sector, the energy transition should lead to a radical change in the structure of sources and methods of electricity production,” according to the plan.

Coal plants, open pit mines could be replaced with wide range of activities from culture to gas power plants

Listed among the possibilities for repurposing coal plants and coal mine land after shutting them down are green power plants (but also gas-fueled energy facilities), launching industrial production, logistical and commercial activities, together with sports, culture, education, agriculture, tourism and waste management.

In 2023. there were 25,288 employees in thermal power plants (22.2%) and coal mines (77.8%), the document notes. The oldest coal plant, Kolubara A of 239 MW, was built in 1956, and the newest unit is Kostolac B3, of 350 MW. It came online last year.

“Social dialogue mechanisms should be established to ensure that the voices of all stakeholders are heard and their concerns are addressed. This includes consultations with trade unions, local self-governments and civil society organisations,” the Just Energy Transition Plan of the Republic of Serbia until 2030 suggests.

Expenses are envisaged at EUR 75.4 million, of which EUR 12 million would be for incentives for entrepreneurship and self-employment and EUR 60 million for improving business structure at existing industrial parks.

Carbon pricing system to make coal power plants in Serbia increasingly uncompetitive

One section covers the upcoming rollout of charges within the European Union’s Carbon Border Adjustment Mechanism (CBAM). The tax affects imports of a group of raw materials and electricity. Third countries can be exempted if they establish their own carbon pricing and emissions trading systems.

“In order to balance the economic and environmental impacts of the introduction of domestic carbon pricing in Serbia, a phased approach could be adopted, starting with a modest carbon price and gradually increasing it. Support for affected industries, such as subsidies for low-carbon technologies and worker retraining programs, along with recycling revenues to finance green projects and providing direct rebates to citizens, can mitigate negative effects,” the plan adds.

NGOs have criticized the action plan draft for only describing preparatory activities

Actually, proceeds from greenhouse gas emissions allowances in the EU are used only for the green economic transition, and it is similar with most environmental levies.

The introduction of a carbon tax mechanism will make domestic coal-fired power plants increasingly uncompetitive, especially in regional electricity markets, the government warned.

Nongovernmental organizations and associations earlier criticized the draft, arguing that it delays the energy transition until 2030, only lists preparatory activities and that, inter alia, there is no targeted date for ending the use of coal for electricity production.

In any case, a just energy transition requires defining deadlines and projects and securing funds exclusively for the said purposes. Otherwise the market will trample coal plants and mines, and it will probably happen abruptly, which would jeopardize energy security and employment. Such effects are already tangible in Southeastern Europe, especially in Bosnia and Herzegovina, as well as in Bulgaria and Slovenia.

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July 23, 2025
by in News

Germany supports Serbia in clean energy supply, environmental protection

The Republic of Serbia and Germany’s KfW Development Bank signed a loan agreement on July 18 for EUR 135 million for the second phase of the credit program Green Transition Development Policy Operation (DPO II).

The signatures underscore the joint activities by Germany and Serbia aimed at a climate-compliant and socially just energy transition, said Chargés d’Affaires ad interim Carsten Meyer-Wiefhausen from the Embassy of the Federal Republic of Germany in Serbia. “We will continue to be with Serbia on this path and support its reform efforts,” he stressed.

Within the financing for the reforms, the World Bank, French Development Agency (AFD) and the German KfW Development Bank are supporting the Republic of Serbia in conducting its ambitious reform agenda. The goal is to accelerate the transition to energy from clean sources and align with EU standards in environmental protection and climate.

Series of reforms through DPO II

Several successful reforms have been materialized within DPO II, among which:

  1. Promoting investments that are acceptable in environmental and climate terms: Public investments are graded under environmental criteria and with regard to the risk of natural disasters, and with models developed solely for the purpose. The citizens of Serbia benefit from the government’s more sustainable investment decisions.
  2. Enhanced transparency in the public budget: The Government of the Republic of Serbia has committed to publishing information on the execution of the public budget, not only at the end of the fiscal year, but also during the year. It improves the transparency of public expenditures, primarily concerning investments in environmental and climate protection.
  3. Affordable energy prices: The Government of the Republic of Serbia has rolled out temporary targeted subsidies for households with low income, like citizens with low pensions. The share of households receiving such aid has grown from 2.7%, registered in 2021, to last year’s 8%.
  4. Improvement in waste disposal: Aligning with EU standards brings a better approach to sanitary landfills, namely from 42% (2021) to last year’s 50%. The citizens of Serbia benefit from improved waste disposal and a cleaner environment.
  5. Prepared for CBAM: Since this year, large industrial facilities and power plants report their CO2 emissions in line with EU standards. That way Serbia is more prepared for the upcoming full implementation of the European Carbon Border Adjustment Mechanism (CBAM) for carbon prices. For instance, the country would be able to price CO2 emissions and charge them.

Financing reforms within climate partnership

Germany’s contribution to financing reforms is an integral part of Germany’s climate partnership with Serbia and the entire Western Balkans. The purpose of the partnership is to support Serbia’s work on achieving its national climate goals and adapting to climate change. The key goal of the partnerships is for the transformation that is necessary to meet climate goals, in the interest of Serbian citizens, to be socially just, a just transition.

This year, Serbia and Germany are celebrating the 25th anniversary of their development cooperation. In the meantime, KfW financed projects worth EUR 2.5 billion in Serbia.

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