July 21, 2025
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Energy Community marks 20th anniversary as integration pillar for Southeastern Europe

The Energy Community Ministerial Council held its annual informal meeting in Athens, where the organization was founded twenty years ago. No contracting party is expected to meet the criteria for exemption from the Carbon Border Adjustment Mechanism (CBAM) in the electricity sector – the European Union is due to start charging the CO2 tax on January 1 – but the European Commission could propose amendments.

The Energy Community promotes integration, reforms and investments across the region, top officials stressed.

Ministers from the Energy Community contracting parties convened today at the Informal Ministerial Council in Athens to mark the organization’s 20th anniversary. The Energy Community Treaty, establishing the Energy Community, was also signed in the Greek capital. The purpose of the organization is to create a more integrated market, help attract investment and speed up decarbonization by aligning with the European Union’s rules on energy, environment and competitiveness.

In recent years, close cooperation has enabled the contracting parties to strengthen the security of supply, particularly against the backdrop of the ongoing Russian war in Ukraine, the Energy Community Secretariat said. During the annual gathering, hosted by the Greek Ministry of the Environment and Energy, the ministers underlined the need for an accelerated integration with the EU, grounded in delivering a secure, resilient energy transition.

Ministers agreed to revise capacity calculation regions

Many contracting parties are close to completing the reforms needed to launch the 18-month countdown to electricity market coupling – including full legal alignment under the Energy Community’s Electricity Integration Package and the appointment of nominated electricity market operators (NEMOs). If transposition is verified as compliant by the European Commission and the Energy Community Secretariat, integration will be initiated with the EU’s Single Day-Ahead Coupling (SDAC) and Single Intraday Market Coupling (SIDC).

Ministers made a breakthrough in regional coordination, backing a proposal by EU transmission system operators to revise capacity calculation regions (CCRs), now under review by the EU energy regulator ACER – Agency for the Cooperation of Energy Regulators. Recognizing the proposal’s importance for an effective operation of the interconnected grid, they called for swift follow-up, including the operationalization of regional coordination centers (RCCs) and system operation regions (SORs).

The aim is to boost electricity flows and grid security, especially along the north-south corridor of the Balkans, while laying the groundwork for full EU market coupling.

Decarbonization must accelerate ahead of CBAM implementation in 2026

To avoid disruptions to regional electricity trade, clarifying CBAM rules for electricity is a priority for the ministers, the secretariat pointed out. The EU is set to begin charging the carbon border tax on January 1.

Lorkowski: Electricity market integration and decarbonisation are two sides of the same coin

As no contracting party is expected to meet the exemption criteria by then, a proportionate and context-sensitive application of the mechanism is essential, as supported by active engagement in the European Commission’s ongoing call for evidence that precedes the future amendments of the CBAM regulation to be possibly proposed by the European Commission, in the secretariat’s view.

“Electricity market integration and decarbonisation are two sides of the same coin. The green energy transition unlocks meaningful integration with the EU market – and vice versa. Only by aligning policy, infrastructure, and pricing can contracting parties fully realise the benefits of clean, secure, and affordable energy,” said Energy Community Secretariat Director Artur Lorkowski.

The ministers called for carbon revenues to support vulnerable communities and mobilize investment in clean energy, stressing that just transition financing must go hand in hand with policy reforms.

Energy Community Treaty is now cornerstone of Europe’s energy architecture

Born out of crisis and shaped by cooperation, the Energy Community Treaty has become a cornerstone of Europe’s energy architecture, Lorkowski stressed. What began as an unlikely experiment in regional integration has grown into a dynamic framework – extending the EU’s internal energy market, strengthening energy security, and advancing the clean energy transition across South-Eastern and Eastern Europe, he asserted.

Energy Community contracting parties can fully integrate their electricity markets with the EU before joining it

“Our contracting parties are now on the cusp of a major breakthrough: full electricity market integration with the EU – even ahead of accession. This is the product of two decades of reform, dialogue, and trust-building. With the right political will, we can move from transposition to transformation,” Lorkowski stated.

In his view, Greece is the window for the Energy Community contracting parties to the liquefied natural gas (LNG) market and the access point to the European electricity system. Close cooperation with the Western Balkans has economic benefits for Greece – but beyond the economy, it is also about security and stability, Lorkowski said at the event.

Energy Community pioneered extension of EU energy market

Over the past two decades, the Energy Community has brought the EU closer to its neighbours, pioneering the extension of the trade bloc’s energy market across its borders, promoting integration, reforms and investments across the region, according to European Commissioner for Energy and Housing Dan Jørgensen.

“Now it is time to look ahead at our shared future based on a greener, sustainable and resilient system which will bring cheaper energy and more security to all,” he said.

Separately, in an interview with Kathimerini, Jørgensen noted that Southeastern Europe experienced electricity price spikes last summer, mainly in the evening hours, due to a lack of cross-border capacity and sufficient flexibility. The only solution is further infrastructure and market integration, as costs are separated and benefits are multiplied, he opined.

For every EUR 2 billion invested annually in cross-border infrastructure, the potential benefits reach up to EUR 5 billion, the commissioner added.

Papastavrou: Southeastern Europe’s is at disadvantage as its electricity market is not fully integrated with EU

Southeastern Europe is still not fully integrated with the EU, which is a structural disadvantage for citizens, said Minister of Environment and Energy of Greece Stavros Papastavrou.

“I am very optimistic after the first session of the meeting, because all the contracting parties expressed commitment, a strong commitment, to market coupling,” he stated. Papastavrou said a lot of work is required in the electricity sphere to bridge the gap for the prosperity of citizens and the entire region.

Energy integration is one of the pillars of EU accession

Energy integration is not just a technical issue – it is one of the fundamental pillars of the EU accession process, the minister told his counterparts from the Energy Community.

“Greece, too, has faced the same challenges that many of you are experiencing today. Back in 2005, our energy system was almost entirely dependent on lignite, by more than 60%. Today, we have reduced lignite use by an impressive 91% – a clear demonstration of our strong commitment to a clean, sustainable, and resilient energy future,” he stated.

Serbia’s Đedović Handanović sees possibility for market coupling with Hungary already next year

Serbia was the first in the region to fulfill the conditions for market coupling with the EU, the country’s Minister of Mining and Energy Dubravka Đedović Handanović said. She urged for the verification process to be accelerated, so that Serbia can connect with the Hungarian market in 2026 and, through it, with the other EU member states.

The minister acknowledged the challenge of the upcoming full implementation of CBAM.

Photo: Minister Dubravka Đedović Handanović (Nenad Kostić / Ministry of Mining and Energy)

Serbian institutions analyzed the available options from the study that the European Commission published. “We think that carbon pricing should be introduced gradually, in phases and fairly, with support from funds from the European Union,” she said.

The minister stressed that revenues from carbon taxes would be directed, like in the EU, to decarbonization, renewables, energy efficiency, just transition and support to companies.

“Without an adequate period of time for the transition from coal to renewable energy sources, without modernizing the network, increasing RES capacities and adjusting the industry, higher carbon costs can only increase the financial pressure on our industry and consumers, which is already happening in the EU, instead of resulting in a significant emissions reduction in the short term. Solving these issues requires careful planning, a phasein and the EU’s targeted financial support, so that climate goals would be aligned with the economic reality,” Đedović Handanović said.

She recalled that EU member states had more than two decades to gradually adjust to carbon emission levies. Đedović Handanović affirmed that Serbia is willing to continue its alignment with the EU’s energy and climate policy.

“All the reform measures that we are conducting are primarily for the benefit of our citizens and companies, and we won’t make decisions overnight that would jeopardize our energy stability,” she said.

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July 18, 2025
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Clean transition, decarbonization among priorities in EU’s draft budget

Within the European Union’s proposed budget for the period from 2028 to 2034, the EUR 409 billion European Competitiveness Fund is for investments in strategic technologies, including for the clean transition and decarbonization. The new Connecting Europe Facility (CEF), worth EUR 81.4 billion, would finance the completion of Trans-European Networks and foster the EU’s green and clean transition in energy and transportation.

The European Commission proposed the next long-term budget of almost EUR 2 trillion, of which 35% would be earmarked for climate and environment. Energy infrastructure spending in the so-called Multiannual Financial Framework (MFF) for 2028-2034 will be EUR 29.5 billion, five times higher than in the previous seven-year period, it said, arguing it would reinforce energy independence and accelerate the clean transition.

The entire proposed sum amounts to 1.26% of the expected gross national income, on average. The framework is aimed at an independent, prosperous, secure, and thriving society and economy, the update adds.

“Europe faces an increasing number of challenges in numerous areas such as security, defence, competitiveness, migration, energy and climate resilience. These are not temporary but reflect systemic geopolitical and economic shifts that require a strong and forward-looking response,” the EU’s top executive body said.

Adapting to local needs

The European Commission pointed out that the budget would be tailored to local needs. National and regional partnership plans based on investments and reforms would be introduced, for targeted impact where it matters most and ensuring a faster and more flexible support for more economic, social and territorial cohesion across the union, according to the outlined measures.

“Our new long-term budget will help protect European citizens, strengthen Europe’s social model and make our European industry thrive,” European Commission President Ursula von der Leyen stated.

For the first time, the spending plan would enable member states to invest more in the EU objectives, with loans of up to 150 billion EUR altogether. “We will call it Catalyst Europe. The loans are backed by the EU budget. It targets common European priorities. You can invest it – for example in defence industry or energy infrastructure or strategic technologies,” Von der Leyen said.

The budget plan includes a European Competitiveness Fund, worth EUR 409 billion, for investment in strategic technologies. Operating under one rulebook, and offering a single gateway to funding applicants, it aims to simplify and accelerate EU funding and catalyse private and public investment. The focus is on four areas:

  • clean transition and decarbonization,
  • digital transition,
  • health, biotech, agriculture and bioeconomy,
  • defense and space.

In close connection with the European Competitiveness Fund, the EU research framework, with its flagship Horizon Europe worth EUR 175 billion, will continue to finance world-class innovation, the commissioners revealed.

Commissioners line up EUR 81.4 billion in budget for next Connecting Europe Facility

The next Connecting Europe Facility (CEF), worth EUR 81.4 billion, would finance the completion of Trans-European Networks and foster the EU’s green and clean transition in energy and transportation. It covers cross-border projects for energy, transportation and military mobility that are essential for competitiveness and security and reducing strategic dependencies.

To simplify external action financing, the EU’s top executive body envisaged an item called Global Europe, of EUR 200 billion, to maximise impact on the ground and improve visibility of EU external action in partner countries. It would allow the EU budget to step up support to candidate countries and prepare for their accession.

Among other segments, the European Commission said it plans to direct 75% of revenues from the Carbon Border Adjustment Mechanism (CBAM) to the EU budget. It expects the resource to generate EUR 1.4 billion per year.

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June 23, 2025
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EU institutions reach deal on CBAM simplification

The Council of the European Union struck a provisional agreement with negotiators from the European Parliament regarding the European Commission’s proposal to simplify the CBAM carbon border tax. The initial levy, which would be gradually increased year by year until it matches the EU ETS price, is coming into force on January 1. The administration in Brussels doesn’t seem willing to consider delaying the date, even though neighboring third countries and their exporters to the EU are struggling to adjust to the new system, especially in the electricity sector.

The Polish presidency of the Council of the EU and European Parliament’s negotiators reached a provisional agreement on one of the proposals of the so-called Omnibus 1 legislative package: a regulation that would simplify and strengthen the Carbon Border Adjustment Mechanism (CBAM).

The proposal seeks to ease compliance without compromising the scheme’s climate goals. The colegislators said it would reduce the regulatory and administrative burden, as well as costs for EU companies, especially small and medium-sized enterprises (SMEs).

CBAM is a tool to equalize the price of carbon paid for EU products operating under the EU Emissions Trading System (EU ETS) with that of imported goods, and to encourage greater climate ambition in non-EU countries.

No relief in scope so far for EU’s neighboring countries

Notably, third countries including the Western Balkans and Turkey and the companies there that export cement, iron and steel, aluminum, fertilizers, electricity and hydrogen to the EU are running out of time before charges are introduced on January 1 next year. Primarily, the governments need to introduce carbon pricing systems to be exempted.

ENTSO-E asked for a one-year delay of the initial CBAM charges for electricity

Earlier this month, the European Network of Transmission System Operators for Electricity (ENTSO-E) highlighted several contradictions in CBAM in its sector. It suggested to the European Commission to prolong the transitional period by one year. The latest update doesn’t indicate any willingness to suspend the levy.

Moreover, the European Commission needs to assess in early 2026 whether to extend the scope to other ETS sectors and how to help exporters of CBAM products at risk of carbon leakage. The EU is set to increase the tariffs every year until they match the EU ETS at the start of 2034.

Boosting EU competitiveness

The European Commission said in February that the measures it proposed would save EUR 6.3 billion.

“Simplification is a top priority for the Polish presidency. Today’s provisional agreement with the parliament is yet another step towards reducing administrative burden for our companies and further boosting EU competitiveness,” Minister for the European Union of Poland Adam Szłapka said about the deal with lawmakers.

The colegislators retained the key components of the commission’s proposal to simplify CBAM rules, according to the Council of the EU. There would be a broader de minimis exemption from obligations applicable to importers that do not exceed a single mass-based threshold set at a level of 50 tons per year. The revised regulation would also permit them to avoid any initial disruptions as they will be able to continue importing while awaiting CBAM registration.

Both institutions must formally adopt the measures before they enter into force, which is expected by September, the Council of the EU said.

According to the European Parliament, 90% of importers would be exempted and 99% of CO2 emissions from iron, steel, aluminium and cement imports are still covered.

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June 18, 2025
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Joksimović: Serbia preparing to introduce carbon pricing

Serbia is preparing to introduce carbon pricing, Jovana Joksimović, Assistant Minister of Mining and Energy for International Cooperation and European Integration, has announced.

The authorities are preparing a comprehensive analysis of carbon pricing for all products that will be affected by the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM), Jovana Joksimović said at a conference on the introduction of the EU’s carbon border tax.

The Ministry of Mining and Energy has carried out an assessment of the impact of the EU regulation on Serbia’s electricity sector, she said, without providing further details.

A few days ago, the National Alliance for Local Economic Development (NALED) called on state institutions to protect Serbia’s energy-intensive industries from the impacts of CBAM, warning the EU’s carbon border tax would threaten jobs and businesses in that sector.

Serbia is the only Energy Community contracting party prepared to implement emissions monitoring, reporting, and verification

“When it comes to reporting, Serbia is the only contracting party of the Energy Community that is prepared to implement the monitoring, reporting, and verification (MRV) system by transposing the relevant EU legislation. MRV is a prerequisite for introducing a carbon pricing mechanism and can facilitate the implementation of CBAM,” said Joksimović.

She recalled that the European Commission has accepted alternative options for carbon pricing for the Energy Community contracting parties, including carbon taxes and a fixed-price emissions trading system until EU accession.

CO2 emission factors are the biggest concern

According to her, Serbia’s main concern is the discrepancy between the two CO2 emission factors set by the European Commission – one for electricity and another for electricity used in the production of other CBAM products, which is used for calculating indirect emissions.

She recalled that the European Network of Electricity Transmission System Operators (ENTSO-E) recently proposed to the European Commission to consider revising the CBAM methodology during the transition period to ensure a fair and consistent approach.

A unified methodology would encourage investments in renewable energy, support common climate goals, and promote a fair transition to a decarbonized economy.

The EU’s carbon border tax could disrupt electricity market coupling

“The economic implications of CBAM implementation require careful consideration, particularly with regard to its potentially disproportionate impact on the Western Balkans. We expect the European Commission to accept the national electricity mix emission factor in the application of CBAM for electricity, meaning that the cost of the levy decreases as the share of renewable energy increases,” she said.

Jovanović stressed that CBAM could disrupt ongoing efforts in electricity market coupling.

“The European Commission is expected to propose a constructive solution, given that market coupling and the implementation of CBAM are supposed to be compatible,” she pointed out.

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June 17, 2025
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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).

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June 11, 2025
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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.

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June 7, 2025
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Association of Serbian Energy Intensive Industry is actively participating in decarbonization dialogue

The Association of Serbian Energy Intensive Industry (ASEII), founded in September 2024, advocates for a coordinated national and regional approach to decarbonization that ensures the process strengthens rather than erodes competitiveness. “We believe it is very important that energy-intensive industries have their place in the dialogue around decarbonization, not only as passive observers but as active participants,” Director Svetlana Simić said at Belgrade Energy Forum 2025.

The Association of Serbian Energy Intensive Industry was established at a time when the domestic industry is facing complex challenges associated with the energy transition. Its five founding members represent the core of Serbia’s real economy, operating in the steel, fertilizer, and cement sectors.

“These are five leading companies in their respective fields: Metalfer, Elixir, Lafarge, Titan, and Moravacem. Our mission is clear: to be the voice of industry in the era of the energy transition. We believe it is very important that energy-intensive industries have their place in the dialogue around decarbonization, not only as passive observers but as active participants,” Director of ASEII Svetlana Simić said at Belgrade Energy Forum 2025 (BEF 2025).

The companies can offer solutions through their capacities, know-how, and experience, she underscored.

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State and industry need to be partners in decarbonization

The Association of Serbian Energy Intensive Industry was founded in September. It advocates for a coordinated national and regional approach: one that protects strategic sectors, fosters low-carbon investment, and ensures that decarbonization strengthens rather than erodes competitiveness.

ASEII was a silver sponsor of this year’s conference, organized by Balkan Green Energy News. “We are at Belgrade Energy Forum today to highlight the importance of partnership between the state, the industry, and other stakeholders. We are also facing a serious challenge: the introduction of CBAM,” Simić stated.

Simić: We need legislative mechanisms that recognize how much companies are investing in their processes and innovation to reduce emissions

CBAM – the European Union’s Carbon Border Adjustment Mechanism, is a levy on carbon dioxide emissions for foreign cement, iron and steel, aluminum, fertilizers, hydrogen and electricity. The administration in Brussels launched it to protect its economy from imports from third countries with less stringent or no carbon pricing. CBAM charges are due to be introduced gradually, starting in January.

Serbia, like the entire region, must act wisely, strategically, and swiftly, Simić pointed out. “We need legislative mechanisms that recognize how much companies are investing in their processes and innovation to reduce emissions and secure an equal footing in the market,” she said.

Zečević: Many companies have been preparing for CBAM

Branko Zečević, president of Metalfer Group and one of the founders of the Association of Serbian Energy Intensive Industry, was one of the panelists at BEF 2025, in a session titled Addressing carbon pricing in the Western Balkans – Turning decarbonisation challenges into opportunities through collaboration, innovation and competitiveness.

He said CBAM’s effects on Serbian exports can’t be quantified easily yet, but that many companies have been preparing for it and investing in decarbonization. In Zečević’s view, a much bigger threat for the industry in Serbia and the region is an expected flood of goods that will not be able to enter the EU market anymore. He stressed that a domestic carbon pricing system is necessary.

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June 4, 2025
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CBAM could cost BiH up to EUR 1.6 billion; PM Nikšić signals potential delay

The implementation of the European Union’s cross-border carbon tax and an emissions trading system could cause losses for businesses in Bosnia and Herzegovina ranging from BAM 722 million to BAM 3.17 billion (EUR 369 million to EUR 1.62 billion), according to the latest analysis. At the same time, a statement from the Government of the Federation of BiH, one of the two political entities of BiH, indicates that the rollout of the tax could be postponed.

The EU’s Carbon Border Adjustment Mechanism (CBAM) is expected to come into effect on January 1, 2026. CBAM will impose taxes on imports of cement, iron, steel, aluminum, fertilizers, hydrogen, and electricity into the EU from countries that do not have a CO2 tax.

If CBAM and an emissions trading system (ETS) are both implemented starting next year, BiH’s economy could face financial losses ranging from BAM 722 million (EUR 369 million) to BAM 3.17 billion (EUR 1.62 billion) between 2026 and 2030, Akta reported.

The analysis was prepared at the request of the Ministry of Foreign Trade and Economic Relations of BiH, with support from the Delegation of the European Union to BiH and technical assistance through the EU4Energy project. The authors analyzed four scenarios based on CO2 prices ranging from EUR 118.53 to EUR 147.22 per ton.

Four models for implementing CBAM and ETS were analyzed

The electricity sector, one of the most important industries in BiH, could bear the highest costs under all four models analyzed.

According to the authors, the costs could be passed on to electricity prices, harming households and businesses. It could pose a serious challenge to the country’s economic stability in the coming years.

The first scenario assumes that BiH is paying CBAM, but an ETS is not introduced. Losses in this case would amount to BAM 1.2 billion (EUR 614 million), with electricity producers suffering the most  – BAM 737 million (EUR 377 million). Steel and iron producers would lose BAM 454 million (EUR 232 million), and the cement industry BAM 58 million (EUR 30 million).

The least favorable scenario is a simultaneous implementation of both CBAM and ETS

The second scenario is based on a phased introduction of CBAM with free allocation, but still without ETS. The cost is estimated at BAM 722 million (EUR 369 million), with the electricity sector losing BAM 580 million (297 million), and the steel and iron industry BAM 100 million (EUR 51 million).

The third scenario is the worst for BiH. If ETS and CBAM are rolled out simultaneously, total cost reach BAM 3.17 billion (EUR 1.62 billion). The electricity sector would lose BAM 2.1 billion (EUR 1.07 billion), and the iron and steel industry BAM 504 million (EUR 258 million).

The fourth option involves free allocation within the ETS and CBAM applied only to fertilizers, which are not under the scope of the ETS. In this case, BiH’s industry would lose BAM 2.3 billion (EUR 1.2 billion). Electricity producers account for BAM 2 billion (EUR 1 billion) and the iron and steel industry is down BAM 117 million (EUR 59.8 million).

Nikšić: We must be prepared

Earlier this year, there were reports that the European Commission intends to propose a delay in the implementation of CBAM. However, it turned out that only the reporting and payments would be delayed.

Prime Minister of the Federation of BiH Nermin Nikšić said in Neum that there are indications the deadline for introducing CBAM might be extended.

However, FBiH cannot rely on it, and must create conditions to generate sufficient energy from renewable sources, he underlined. It will ensure that the industry does not have to pay taxes when exporting its products to the EU, Nikšić added.

He didn’t go into the details about the indications.

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May 30, 2025
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Western Balkans power markets: hope for coupling with EU, concerns about CBAM

Energy Community contracting parties are doing their best to meet the challenging requirements and use the opportunity to couple their electricity markets with the European Union in Q4 2026 or Q1 2027. Apart from other benefits, coupling could represent a strong incentive for investment in renewables. However, the introduction of CBAM could be a step back for electricity markets, investments and energy transition in the region, according to representatives of transmission system operators, regulators, and power exchanges who spoke at Belgrade Energy Forum 2025.

The third Belgrade Energy Forum, BEF 2025, organized by Balkan Green Energy News, welcomed four hundred participants from more than 30 countries from the region, Europe, and beyond.

Participants in the panel called Integration of Western Balkans electricity markets into internal European market through market coupling were:

  • Anže Predovnik, ADEX Group, CEO,
  • Jasmina Trhulj, Energy Community Secretariat, Head of Electricity Unit,
  • Ivan Asanović, TSO Crnogorski Elektroprenosni Sistem (CGES), CEO,
  • Marko Bislimoski, Energy, Water Services and Municipal Waste Management Services Regulatory Commission of the Republic of North Macedonia (RKE or ERC), President,
  • Zoran Vujasinović, EU Agency for the Cooperation of Energy Regulators (ACER), Policy Officer.

They discussed very hot topics including market coupling, the Carbon Border Adjustment Mechanism (CBAM), and blackouts.

Market coupling: The first go-live window scheduled for Q4 2026 or Q1 2027

Dejan Stojčevski and Jasmina Trhulj (photo: Balkan Green Energy News)

In his opening remarks, panel moderator Dejan Stojčevski, CTO of the SEEPEX power exchange, emphasized the importance of integrating the electricity markets of the Energy Community contracting parties (EnC CPs) with the EU internal electricity market as a key element in the energy transition process.

“Market coupling, which is a prerequisite for a successful energy transition, brings about greater transparency, increased competition, the establishment of a unified regional reference price, and stronger incentives for investment in renewable energy sources,” he stressed.

However, in his words, the integration is not without challenges. Countries in the region must address several issues, including the transposition of relevant regulations, the designation of nominated electricity market operators (NEMOs), and the operational connection process through the implementation of local projects, Stojčevski underlined.

Trhulj: The transposition of EIP enables accelerated electricity market integration into the single EU electricity market

The most important regulation is the Energy Integration Package (EIP). Jasmina Trhulj, Head of Electricity Unit of the Energy Community Secretariat, recalled that the transposition of EIP by the contracting parties enables their accelerated electricity market integration into the single EU electricity market before accession into the EU takes place.

To achieve that, EnC CPs have to adopt and implement the laws in a compliant manner, including extending ACER’s jurisdiction to the cross-border issues between EU member states and EnC CPs, she noted.

With regard to regional methodologies, ACER is competent to the extent that neighboring EU countries are involved, which is most often the case.

The preparation of the Market Coupling Operator Integration Plan is underway

Another important piece of the puzzle is the Market Coupling Operator Integration Plan (MCO IP), which will set guidelines and timelines for the implementation of the day-ahead and intraday market coupling of EnC CPs. Trhulj confirmed that the preparation is currently underway.

According to the draft MCO IP, the first go-live window is scheduled for Q4 2026 or potentially by Q1 2027, provided that the following prerequisites are met, she revealed.

The prerequisites are the transposition of the EIHP completed and its compliance verified; NEMO designated in a compliant manner; operational readiness of transmission system operators (TSOs) and NEMOs confirmed; and full contractual adherence completed.

“Provided that the legislation is transposed and its compliance verified and MCO IP approved by ACER, a NEMO may submit requests for accession to market coupling. This is followed by an accession process lasting up to 18 months,” Trhulj explained.

Serbia, Montenegro “locked and ready” for the first go-live window

Anže Predovnik and Zoran Vujasinović (photo: Balkan Green Energy News)

ADEX Group CEO Anže Predovnik shared Slovenia’s experience in various market coupling processes within the internal European electricity market, including different products such as day-ahead, intraday continuous, and intraday auction market coupling.

He particularly emphasized the importance of market coupling and its impact on liquidity, transparency, competition, and increased investments in renewable energy sources.

Predovnik presented HUPX’s integration into the ADEX Group, which was completed in late 2024, and highlighted the benefits ADEX brings to the market and its participants through the unification of the power exchanges of Slovenia, Serbia, and Hungary.

Enhanced transparency, the use of a unified trading and clearing technology, a single market operation, a harmonized market access process across the ADEX markets, alignment of rules, and improved client services are just some of the advantages offered by the formation of ADEX Group, he pointed out.

One immediate benefit already implemented is that market participants active in one ADEX market do not pay entry fees when accessing another market within the group.

Predovnik: Market participants active in one ADEX market don’t pay entry fees when accessing another market within the group

“Additionally, all resources within the group are contributing to the implementation of the local project for coupling the Serbian and Hungarian day-ahead markets, with the project expected to be completed at the first available slot, anticipated for Q4 2026 or Q1 2027,” Predovnik noted.

CEO of Montenegro’s TSO Crnogorski Elektroprenosni Sistem (CGES) Ivan Asanović also spoke about the market coupling project timeframe.

After compliance of the transposition of EIP is verified and provided that the necessary adaptations of the Day-ahead Operations Agreement (DAOA) and the Intraday Operations Agreement (IDOA) regarding the extension to the price zones of EnC CPs are adopted at the Market Coupling Steering Committee (MCSC) level, CGES and power exchange BELEN could sign these contracts, becoming non-operating parties in the MCSC, he revealed.

According to Asanović, obtaining the status in MCSC is a precondition for the submission of a request for change, and it is extremely important to carry it out in a timely manner, to complete the process, which lasts 18 months, until Q4 2026 or Q1 2027.

Of note, a week ago, North Macedonia’s Minister of Energy, Mining and Mineral Resources Sanja Božinovska said it is realistic to aim for coupling in the fourth quarter of 2026 or the first quarter of 2027.

CBAM and blackouts are looming

Anže Predovnik, Zoran Vujasinović and Ivan Asanović (photo: Balkan Green Energy News)

Apart from market coupling, the stakeholders in the region are also concerned about the developments regarding the Carbon Border Adjustment Mechanism (CBAM) as well as about blackouts.

Dejan Stojčevski (SEEPEX) sees the potential effect of CBAM on the electricity sector, starting on January 1, 2026, as a major issue.

The mechanism could pose a serious threat to the overall energy transition in the region, he added.

In addition, it is crucial to discuss system security and the root causes of the blackouts that recently occurred across Europe, Stojčevski pointed out.

“As there was no announcement that the application of CBAM will be postponed, we are operating under the assumption that it will apply to electricity as of January 1, 2026, given that the contracting parties will not be ready for market coupling by that date,” Jasmina Trhulj (Energy Community Secretariat) underlined.

Trhulj: There is a risk that certain stakeholders may shift their trading activities and renewable investments away from the region

In her words, it creates a number of risks to the functioning of the regional electricity market and the energy transition process that the secretariat has been raising on behalf of the contracting parties, electricity traders, power utilities, renewable energy developers, and other stakeholders.

She warned of a risk that certain stakeholders shift their trading activities and investments in renewables away from the region, thereby potentially undermining integration and decarbonization efforts.

Dejan Stojčevski, Jasmina Trhulj and Marko Bislimoski (photo: Balkan Green Energy News)

In addition, market participants are raising the issue of the considerable uncertainty regarding the exact technical implementation of CBAM for electricity – inherently unique within a group of goods, Trhulj recalled.

It is crucial for the countries in the region to speak openly with Brussels, said Marko Bislimoski, president of the Energy, Water Services and Municipal Waste Management Services Regulatory Commission of the Republic of North Macedonia. In addition, they need to come up with an action plan, together with the Energy Community Secretariat, defining the phases for the introduction of carbon pricing, in his view.

Bislimoski: We need to define the items for which we need financial assistance from the EU

“We need a serious approach and to say what we can do ourselves, and then immediately make it happen. At the same time, we need to define the items for which we will need financial assistance from the EU,” Bislimoski asserted.

The panelists agreed the region needs to present a single coordinated position on CBAM at an upcoming meeting on July 1 in Brussels.

Bislimoski recalled that North Macedonia recently adopted the new Law on Energy and added that bylaws would follow. The end goal is to provide security and stability in the transmission and distribution of electricity like in the EU, but also to lower the prices of electricity for consumers, he added.

Asanović: It is necessary to take urgent measures to improve coordination in the region

Regarding the issue of blackouts, Ivan Asanović (CGES) emphasized the importance of coordinating transmission capacities and maintenance plans for transmission lines across the wider Balkan region.

He recalled the challenging operational conditions experienced last winter, when exchanges planned along the Greece-Bulgaria-Romania-Hungary corridor were largely physically realized via the southwestern Balkans, leading to significant network stress. Such situations must be avoided through more comprehensive coordination, he warned.

It is necessary, in his words, to take urgent measures to improve coordination in the region to alleviate the current problems until the establishment of the mechanisms and structures prescribed in the CACM and SOGL regulations.

“These rules will fully harmonize the operation of the system in the region with the rest of Europe and significantly improve the security of functioning and create the necessary preconditions for connecting the markets of the WB6 countries with the single European market,” Asanović stressed.

Vujasinović (ACER): Full operational readiness of CCRs is not a prerequisite for market coupling

Zoran Vujasinović and Ivan Asanović

TSOs made a breakthrough in December. They agreed on a Joint Declaration on Regional Coordination. The declaration, facilitated by ENTSO-E, outlined a new comprehensive cooperation framework for the Western Balkans TSOs within South-East Europe.

Zoran Vujasinović, Policy Officer at the EU Agency for the Cooperation of Energy Regulators (ACER), mentioned that in January the body submitted a request to the TSOs to propose the configuration of capacity calculation regions (CCRs), incorporating the bidding zone borders of EnC CPs within the framework of the EU CCR methodology.

The TSOs’ proposal is expected by the end of July, after which ACER will issue a decision within six months, he said.

The current TSO proposal envisions:

  • the inclusion of the southeastern bidding zone borders in the Balkans into the South East Europe (SEE) region, which already includes the borders between Romania, Bulgaria, and Greece.
  • the formation of a separate region in the northwestern part (covering the mutual borders of bidding zones of Serbia, Bosnia and Herzegovina, and Montenegro, as well as their bidding zone borders with the EU), with a perspective of integration into the Central Europe region.
  • the Italy-Montenegro region and the Eastern Europe region (including Ukraine, Moldova, Poland, Slovakia, Hungary, and Romania) to remain unchanged, as defined by the CACM Regulation of the Energy Community.

According to Vujasaninović, ACER’s position is that the entire region should, over time, transition to flow-based capacity calculation and allocation methodologies. However, the initial step will be participation in market coupling based on Net Transfer Capacity (NTC) values.

“It is important to note that full operational readiness of CCRs is not a prerequisite for market coupling. The coupling can proceed based on existing NTC calculation procedures, provided that regional operational security is not compromised at any time and that maximum coordination in capacity calculation is ensured,” Vujasinović stressed.

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May 27, 2025
by in News

Clock is ticking for introducing carbon tax in Western Balkans, many ambiguities still remain

From January 1st, 2026, Carbon Border Adjustment Mechanism (CBAM) will be effective in the Western Balkans. While the countries are still deciding on the carbon pricing model, the energy intensive industry is advocating for introducing taxation to protect the domestic market from the flood of goods that will not be competitive on the EU market. Even though the Governments might not have been proactive enough in the previous years, the participants of the CBAM panel on BEF 2025 believe there is still time for the regional actors to come up with more proactive approach towards the EU.

Energy Community Contracting Parties are approaching critical choices on carbon pricing that will shape the pathway towards climate neutrality, electricity market integration and sustainable economic development. From January 1, 2026, producers of aluminum, fertilizers, cement, steel, and hydrogen, as well as electricity exporters, will be required to pay the tax on CO2 emissions released during the production of the goods they export to the EU.

At the Ministerial Council in December 2024, four carbon pricing models were presented to the Contracting parties: regional emissions trading system (ETS), national carbon taxes, fixed-price Emissions Trading System (ETS), and full integration with the EU ETS. Upon the request of the Contracting parties, the Energy Community Secretariat provided an impact assessment for all four scenarios. The scenarios differ in structure and scope, but all support a common goal: progressive alignment with the EU ETS and the implementation of the polluter-pays principle.

The Ministerial Council is expected to meet in July to reflect on these scenarios and decide on the preferred regional pathway. This decision will shape the revision of the Decarbonisation Roadmap and guide the implementation of carbon pricing reform up to 2030 and beyond.

Carbon pricing is also central to the region’s electricity market future. The Electricity Integration Package, adopted in 2022, outlines the path to full market coupling between the Energy Community and the EU. To avoid distortions and ensure a level playing field, timely carbon pricing implementation is essential. “The projections shows that if the region would join EU ETS after 2030, the carbon price should reach or even exceed 100 euros per ton of CO2. This would have serious consequences for energy prices, competitiveness and industrial exports. Also, delaying actions could prove to be costly. That’s why contracting parties are expecting to implement domestic ETS for electricity with the price equivalent to EU ETS”, Milica Brkić Vukovljak, from Energy Agency of the Republic of Serbia, explained.

Milica Brkic Vukovljak (photo: Balkan Green Energy News)

The expectations around the CBAM introduction in the region were the main topic of discussion on the BEF 2025 panel Addressing carbon pricing in the Western Balkans – Turning decarbonization challenges into opportunities through collaboration, innovation and competitiveness, moderated by Brkić Vukovljak.

The key message from the panel is that regional governments need to take a more active role, especially towards the European Union, and numerous arguments were put forward during the discussion in that direction.

As for Serbia, it is worth noting that it is the only Contracting party of the Energy Community that had transposed the Electricity Integration Package, through which transit of importance for traders takes place. Given that the market coupling is scheduled for the beginning of 2027, it would be important to try to get the European Commission to postpone the deadline from 2026 to 2027.

Introduction of CBAM should not interfere with market integration

While admitting that „it’s never a good moment politically to decide on carbon pricing“, Adam Cwetsch, Head of the European Green Deal in the Energy Community Secretariat, said he believed that the current momentum in the region, together with cumulated experiences, could allow making such a decision at this time.

Adam Cwetsch (photo: Balkan Green Energy News)

He recalled that the decision on carbon pricing was partially left open with the 2021 Decarbonization Roadmap. At the same time, the Green Agenda for Western Balkans is referring to alignment with the EU ETS, as an objective that countries should aim.

„The role of Secretariat is to facilitate making those decisions, fully informed. It entails certain risks, but it is also helping the countries in their journey to join the EU eventually. Another important consideration is setting standards for monitoring emissions, which the countries are obliged to establish and make as of 2026. This is necessary for any credible carbon pricing system, regardless of the chosen model, as they all require credible data and standards“, Cwetsch said.

He insisted that the market integration and market coupling should not be disturbed with the introduction of CBAM, making it a priority to synchronize the situation within the region.

Any model to be decided has to have, as an end point, alignment with the EU ETS

“The least desirable solution would be that there is a country that progresses faster than others and is forced to implement an internal Energy Community CBAM”, Cwetsch said, advocating for a coordinated approach towards setting up the carbon emissions price.

He also noted that any model to be decided must have, as an end point, alignment with the EU ETS. „That should be taken into account when designing the pathway with selected option“, he added.

As things now stand from January 2026 CBAM will be effective, while the market coupling, that allows for exemptions, will not be yet in place. „It is important not to end up with disintegrating the market“, Cwetsch noted.

On the other hand, he believes there is a space for more proactive policy from the Western Balkans actors. „The region should reach out to the EU with more proactive climate policies, which would make clear how the region could contribute to the 2030 or 2040 targets for climate neutrality that EU is striving“, he concluded.

Without carbon pricing mechanisms, the regional markets will be flooded with imports

Branko Zečević (photo: Balkan Green Energy News)

The representatives of energy intensive industry are concerned that past discussions about carbon pricing didn’t pay enough attention to the interests of the companies that are going to be directly affected by imposing tariffs on exports to the EU.

Branko Zečević, president of the Metalfer Group and one of the founders of the Association of Serbian Energy Intensive Industry, said that the introduction of CBAM from the beginning of next year will certainly affect Serbian exports, even though many companies have been preparing for this moment and investing in decarbonization. „Some companies are further down that road, some are at the beginning, and the effects can’t be quantified easily right now“, he argued.

Once you have saved the industry, you have somebody to tax. Otherways, there will be nothing to talk about

However, Zečević insisted that much bigger threat for industry in Serbia and the region, is the expected flood of goods that will not be able to enter EU market anymore and will try to find third markets.

„Markets in the region are pretty opened for that sort of import. An imperative is therefore to have our own carbon pricing system, however you may call it. We must protect our market from these consequences, otherways we will not have any industry to protect in the future“, he insisted.

In his opinion, the first step should be to copy-paste what the EU is doing, to protect the industry, and after that we can talk about the models of carbon pricing. „Once you have saved the industry, you have somebody to tax. Otherways, there will be nothing to talk about“, he warned.

Asked about the expectations of the industry from the Government, he said that financial assistance does not seem a realistic option in the Western Balkans, but there are regulatory measures that could help the companies.

„Industry is more complex than coupling the electricity market, as every industry is different. The companies in the EU received billions of euros in grants over the last 15 years, while the companies in the region were left on their own, each individual company, to make its own adjustments. What the governments in the region can do is to put in place regulatory rules to help and protect local industry and then as a next stage to see if it can implement that regionally“, he concluded.

CBAM ambiguities rising concerns for energy traders

Mark Copley (photo: Balkan Green Energy News)

The ambiguities that follow the introduction of the emissions trading mechanism in the region are more likely to deter than to attract energy traders. Mark Copley, CEO of Energy Traders Europe, association representing 170 energy traders, some of them being active in the region, noted that there is confusion and concern regarding the implementation of CBAM in Western Balkans.

“Lots of questions have been raised: how is that going to work, how the price of CO2 is going to be calculated, what does this means for market integration, how the traders will actually be able to transit power through this region etc”, he said.

Energy traders are pretty good with price risks and volume risks, what we fear is political risk and regulatory risk

While noting that traders generally think that carbon pricing is a good idea, he warned that a good idea in principle could have significant unintended consequences in practice. Energy traders are pretty good with price risks and volume risks, what we fear is political risk and regulatory risk. „I’d like to think that this moment is an opportunity to sit down with all the parties involved to try to sort out the rules”, Copley said.

Copley insisted that he doesn’t have a specific view on what form of pricing is right from the region, but reminded of the experience when Great Britain created its own ETS, which proved to be more volatile, risky and difficult to operate.

„The bigger, more stable, more integrated market – the better. When you have ETS as a large and liquid system, it is fairly easy to trade and manage risks. However, it gets more difficult where you don’t know what the policies are in the short term or in the long term. While I understand the desire that the model should reflect the specifics of the market, be careful in small markets with not much liquidity, because it is hard to design good systems for them”, Copley noted.

Carbon pricing models should reflect the interests of each country in the region

Damir Miljević (photo: Balkan Green Energy News)

The regional non-governmental organizations also have been raising their voice over the topic of CBAM in previous years. One of the warnings of possible negative economic and social impacts was the analysis Chaotic and fake decarbonization of power sectors in the Western Balkansin 2023.

“The problem is that the introduction of CBAM in often seen as a kind of natural disaster, something inevitable that is about to happen”, said Damir Miljević, member of the Board of Center for Sustainable Energy Transition, RESET, a think-tank that published the report mentioned.

In his opinion, Western Balkan countries did not participate actively in the process with lobbying and negotiating with the EU. „The policy makers sit in Brussels, while the Energy Community Secretariat is the directorate for the implementation of the international agreement. I don’t recall that some delegation from the Western Balkans went to talk to the EU about exemptions, even though we had at least one strong argument. Stabilization and Association Agreement with the EU states that neither contracting party will introduce additional taxes, or levies on the other, which means that even if they are introduced, we would have to negotiate about it“, Miljević explained.

The advantage should be given to the model that is fastest and simplest to implement, which is direct taxation

Another argument for negotiations is even stronger – the countries that are candidates for EU accession should not have the same treatment as some very distant states on other continents, he argued. Miljević also added that the region should focus on transferring the acquis from the EU, which they are obliged to, not the policies, where the situation is completely different.

„In the present situation, the only viable solution is to introduce some form of taxation of CO2 for the industry“, he said. In his opinion, this means the advantage should be given to the model that is fastest and simplest to implement, which is direct taxation, to eliminate the influence of CBAM on the export of industrial products from the region to the EU.

„It would be difficult to consider regional schemes, due to huge differences within the region. We already lost too much time on it. Each country should do it individually considering its own interest, not the interest of the energy sector, but the interest of the citizens and the economy and the consequences for them. This way, we will get some initial, however small assets, to start solving the core issue. We should also remember that the introduction of levies on CO2 is essential for the creation of any fund for coal regions in transition”, Miljević concluded.

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