December 8, 2025
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Serbia rolls out taxes on greenhouse gas emissions, imported carbon-intensive products

The Serbian Law on Greenhouse Gas Emissions Tax and Law on Carbon-Intensive Product Imports Tax, both at EUR 4 per ton of CO2 equivalent, are coming into effect on January 1. It is the country’s answer to and equivalent of, respectively, the European Union’s Carbon Border Adjustment Mechanism (CBAM). Notably, several bylaws are still required for the new legislation to be enforced.

The National Assembly of Serbia passed the Law on Greenhouse Gas Emissions Tax and Law on Carbon-Intensive Product Imports Tax today, without accepting any of the opposition’s proposals for changes in the two bills.

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 domestic greenhouse gas emissions tax is Serbia’s answer to the cross-border levy, while with the new import tax it is establishing a corresponding mechanism. Both are EUR 4 per ton of CO2 equivalent, covering also nitrous oxide (N2O) and perfluorocarbons (PFCs).

They are intended to lower pollution, improve energy efficiency, incentivize the deployment of renewable energy and secure a more equal position for the Serbian industry in the domestic and international markets, according to the sidenotes.

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. Both laws are coming into effect on January 1, just like the CBAM charge. However, several bylaws are still required for Serbia to enforce the new legislation.

The CBAM tax is envisaged to rise every year until in 2034 it becomes equal as the prices of greenhouse gas emission certificates in the EU’s Emissions Trading System (EU ETS). Electricity is different, as the amount will from the start correspond to the carbon intensity of the country of origin’s entire production mix.

According to Special Advisor at Serbia’s Economics Institute Ljubo Maćić, charging CBAM will prevent power market coupling between Serbia, other Energy Community contracting parties and the European Union, and discourage investment in renewables.

Of note, the administration in Brussels plans to expand the mechanism to other segments that EU ETS covers.

No electricity in carbon imports tax

The Law on Carbon-Intensive Product Imports Tax doesn’t cover electricity because of technical limitations and a lack of a precise taxing methodology.

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

Importers are 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 five or more tons of designated products per year.

Serbia imports an estimated 3.5 million tons of carbon-intensive products per year.

CO2 tax scope limited to larger producers

The CO2 tax law will be applied to firms obligated to have a license for emissions from their plants. Mostly they are large and medium-sized companies. Fifty companies have obtained such licenses for 92 facilities. They 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 law stipulated.

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

The 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 are 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.

Proceeds from the tax “can be invested in green transition projects,” the sidenote reads, while there is still no dedicated decarbonization fund.

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November 8, 2025
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EU waters down its 2040 climate target in runup to COP30 in Brazil

The Council of the European Union upheld the proposed 90% emissions cut target for 2040 ahead of the United Nations Climate Change Conference COP30 in Brazil, but with substantial workaround possibilities. In addition, the environment ministers failed to define the 2035 ambition, leaving the desired reduction in the amount of released greenhouse gases in a range of 66.25% to 72.5%.

Faced with declining competitiveness due to high energy prices and its strict climate and environmental standards, the EU is loosening its decarbonization goal. Following a marathon session in Brussels, the so-called Environment Council kept the desired greenhouse gas emissions reduction by 2040 at 90%, against the 1990 level, to take it to the COP30 event in Belém, Brazil. However, the competent ministers making up the body allowed several important flexibilities to avoid a last-minute stalemate.

Namely, the Council of the EU approved an updated nationally determined contribution (NDC) of the 27-member bloc and individual states to submit it at the Conference of the Parties of the UN Framework Convention on Climate Change (UNFCCC). Political leaders are gathering tomorrow, while COP30 formally lasts from November 10 to 21.

Following the 2020 NDC and its 2023 update, the new one covers the period up to 2035.

Outsourcing climate improvements instead of domestic decarbonization

On the path to eliminating net emissions by 2050, the EU is sticking with its nominal 2040 goal. On the other hand, in the latest version, the environment ministers allow “an adequate contribution of high-quality international credits in a manner that is both ambitious and cost-efficient.”

In particular, five percentage points of the 90% can be met via emission cuts promised outside the EU, and governments would be allowed to outsource a further five points, Greenpeace warned. It means they would buy carbon credits abroad as offsets.

EU is counting on purchases of other countries’ carbon credits for offsets

“The European Scientific Advisory Board on Climate Change [ESABCC] had called for emissions cuts of 90%-95% by 2040, and had stressed that this target must be for domestic reductions to climate pollution, not cuts outsourced to other countries. Environment ministers also agreed that the European Commission should reopen and water down the climate target in the case of high energy prices, a perceived negative economic impact or in light of technological advances. To reach a deal with reluctant countries, ministers also agreed to delay the start of the EU’s carbon market for pollution from cars and heating systems, extend pollution permits for heavy industry and exempt some ‘low-carbon’ fuels under the internal combustion engine phaseout,” the organization added.

The carbon market in question is the planned Emissions Trading System 2 (EU ETS 2). The Environment Council proposed to delay its establishment by a year, until 2028, and work on measures for a smooth launch.

“According to the ESABCC, only 16% of offsets have delivered genuine emissions reductions. But if they were high-quality offsets, they would be costly, and relying on them would divert investment from transforming the EU’s own industries, economy, and workers,” World Wide Fund For Nature (WWF) pointed out.

Indicative range for 2035 goal entirely below required efforts

The protracted discussions between the EU’s national governments also delayed the announcement of the EU’s indicative climate target for 2035, under the Paris Agreement. It is supposed to be submitted at the UN Climate Change Conference COP30.

“Ministers failed to agree a firm 2035 target, instead keeping a previously agreed range of 66.25% to 72.5% emission cuts, even the upper end of which is inconsistent with a credible pathway to the proposed 90% cut for five years later, undermining the EU’s position as a climate leader at COP30,” Greenpeace stressed.

Climate-competitiveness-independence tradeoff

The European Parliament’s Committee on Environment, Public Health and Food Safety (ENVI) is expected to discuss the matter soon. After a plenary vote, the institution would negotiate with the Council of the EU and European Commission.

“We need climate, competitiveness and independence. All three are crucial and going forward we need to ensure that one doesn’t come at the expense of the other. This morning, the environment and climate ministers of all member states reached a pragmatic, ambitious deal which ensures that,” said European Commissioner for Climate, Net-Zero and Clean Growth Wopke Hoekstra.

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October 30, 2025
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Renewable electricity should not be subject to EU’s CO2 import tax

The European Commission is collecting evidence to come up with solutions for unintended effects of the Carbon Border Adjustment Mechanism (CBAM) on renewable electricity in the Western Balkans, Director of the Energy Community Secretariat Artur Lorkowski pointed out in an interview with Balkan Green Energy News, as one of the most important developments in the sector. Boosting renewable energy development and trade with third countries such as the Western Balkans was supposed to be accelerated by the European Union’s CO2 import tax.

To reduce the payment obligations of EU importers under CBAM, the contracting parties in the region are planning carbon pricing systems, but under different models. The ultimate goal is eventually joining the EU Emissions Trading System, implying the need for coordination and cooperation between the governments in the process, Lorkowski stressed.

Looking back twenty years since the Energy Community Treaty was signed, it proved to be a successful format of cooperation, the Energy Community Secretariat Director Artur Lorkowski said. On the occasion of the anniversary, Balkan Green Energy News sat down with the head of the international organization to speak about the achievements and benefits for the contracting parties, and the remaining milestones that the Western Balkans need to reach in order to integrate with the EU’s energy union.

“Economic growth depends on energy security and fair pricing. There is visible progress in transformation, clearly seen from the 2024 figures. And the final element is the accelerated energy market integration with the EU, and this is what we can be really proud of,” Lorkowski asserted.

Among the segments with tangible improvements, he also highlighted the convergence on the wholesale gas and electricity markets. It is facilitating competitiveness in the Energy Community, the secretariat’s chief added.

Renewables capacity doubled in four years

Fossil fuels used to account for 60% of electricity production in the contracting parties five years ago, compared to 50% now, Lorkowski noted. The significant results in renewables except for large hydro are illustrated by the fact that the overall capacity in the segment has more than doubled between 2020 and 2024, he stressed. More importantly, the carbon footprint – the CO2 emissions per unit of the nominal gross domestic product, fell 11% last year alone.

CO2 emissions per unit of the nominal GDP fell 11% last year in the Energy Community

As for EU integration, electricity market coupling is progressing very well, as a good example, in Lorkowski’s view. The legislation is mostly aligned, so most countries are just waiting for the process to be concluded, the director of the Energy Community Secretariat explained.

“There are operating wholesale markets everywhere in the Western Balkans except in Bosnia and Herzegovina, which is about to adopt the required law. Serbia is at the forefront of that process. North Macedonia and Montenegro are very close, with small elements yet to be achieved. It is a non-reversible point, point of no return on a path towards EU integration,” Lorkowski said. He recalled that when capacity calculations regions (CCRs), operationalization and verification are cleared from the to-do list, it would take 18 months to join the EU’s market coupling project.

Electricity can be exempted from CBAM at later stage

Energy Community contracting parties may become eligible for exemption until 2030 from CBAM in electricity, if they meet the CBAM requirements. However, the EU is starting to charge the CO2 import tax already on January 1.

“I wish the contracting parties followed my messages from the Belgrade Energy Forum in 2023, because you might remember me saying that CBAM is coming and we have to prepare for that. But unfortunately, we have observed a lot of delays and hiccups in the preparatory process. Fair enough, this is the reality we have to face now – no country of the Energy Community will be exempted on 1 January 2026. But we can still work to be exempted at a later stage,” Lorkowski underscored.

Artur Lorkowski was a keynote speaker at Belgrade Energy Forum 2025, organized by Balkan Green Energy News

European Commission expected to clarify rules by end of year

The second part of the story is that CBAM, in addition to its intended impacts, especially on coal power, also has unintended impacts, Lorkowski explained. For example, electricity transit between EU member states through the contracting parties, in practice, may also be subject to the tax, even if it was not intended by the European legislators.

CBAM was intended to provide equal treatment for products produced inside and outside the EU when it comes to carbon payments. “Renewable energy, not being subject to the EU ETS, would – logically – not need to be subject to CBAM, but with the current rules, even EU off-takers with cross-border power purchase agreements (PPAs) may still be subject to payment obligations, as the implementing rules remain overly complex, effectively treating them in the same way as fossil fuel importers. These are real problems that stakeholders have been raising with us in our targeted outreach to power companies, traders, and other stakeholders both from the EU and Energy Community,” Lorkowski added.

Legislative efforts to further improve trade in renewables with the EU continue under the Energy Community

The Energy Community Ministerial Council reported it in Athens to the European Commission and asked it to find a solution.

Lorkowski said he expects the EU’s top executive body to soon issue implementing and delegated acts, by the end of 2025, clarifying the CBAM implementation rules, and to follow it up in 2026 with a targeted amendment proposal on electricity.

Legislative efforts to further improve trade in renewables with the EU continue under the Energy Community. “The European Commission has presented to the contracting parties a draft decision on the mutual recognition of guarantees of origin and is now awaiting their feedback. I hope that in 2026 we can have a decision. But it does not mean that the guarantees of origin can be used as the currency for paying the CBAM fee. That would require amending the CBAM legislation,” he stated.

Carbon pricing systems need to evolve toward matching EU ETS

For a potential reduction of CBAM payments in other areas as well – iron and steel, aluminum, fertilizers, cement and hydrogen – third countries need to introduce carbon pricing systems. Serbia recently drafted legislation for a CO2 tax and for a tax on imports of carbon-intensive products. It is a good step forward, according to Lorkowski.

“We expect each and every country to make a decision on the carbon pricing. All of the countries of the Energy Community, with the exception of Kosovo*, have communicated to the secretariat which model they will implement. And the models vary: from Serbia’s carbon tax to a domestic emissions trading system of Montenegro, which is already in place,” he revealed.

There is no uniform carbon pricing model for the Energy Community

Namely, the Energy Community Ministerial Council decided not to implement a uniform regional carbon pricing mechanism but opted for individual models. They should all be built with the perspective of aligning eventually with the EU Emissions Trading System (EU ETS), Lorkowski said.

“The key challenge now for the Energy Community is how to maintain the integrity of the electricity market between the contracting parties and the European Union after CBAM enters its definitive phase from next January. We need to figure out how to coordinate among the systems. It implies not only the existence of the domestic carbon markets, but also the cooperation within the region,” he pointed out.

Ministerial Council to announce way forward on carbon pricing coordination

The Ministerial Council is due to conclude on carbon pricing at its regular annual meeting in December, Lorkowski said.

“The three critical elements are how much the CO2 will cost, who will pay – which businesses and sectors are in scope – and when those carbon pricing systems will be introduced. They need to maintain the integrity of the market, the level playing field of the market, and avoid market distortions,” the top Energy Community official added.

Practical policies more important than coal phaseout dates alone

Turning to the coal phaseout, essential for the decarbonization of the economy, Lorkowski acknowledged the significance of political declarations such as the Sofia Declaration and commitments from the national energy and climate plans (NECPs).

“That said, it is critically important to anchor the actions for the future with practical policies. The decisions on the establishment of carbon pricing mechanisms are even more important. In addition, we should focus on monitoring, reporting and verification – MRV systems. The contracting parties need to identify emitters and measure quantities,” the director of the Energy Community Secretariat underscored.

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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 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 10, 2025
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Romania preparing to include biomethane in gas grid

Romania has drafted a directive that would regulate the production, transportation and distribution of biomethane and its inclusion into the gas network. The change is aimed at limiting the increase in the prices of gas for household heating, expected from the upcoming introduction of the ETS 2 carbon allowance scheme in the European Union. Delaying the shift would also affect the costs of industrial production and for other non-household consumers of gas.

Biomethane produced from sustainable sources is carbon neutral under the EU Emissions Trading System (EU ETS), making it appropriate for buildings and transportation, the Romanian Ministry of Energy said in a new draft emergency ordinance. With the executive order, it intends to pave the way for utilizing the renewable fuel in the natural gas network, Profit.ro reported.

The document is set to amend several acts and regulate the production, transportation and distribution of biomethane. It would counter, to an extent, the increase in gas prices for households, which is expected from the expansion of the EU’s carbon pricing scheme to buildings and transportation, the ministry explained. Namely, ETS 2 is scheduled to be introduced in 2027.

Biomethane is usually obtained by processing biogas to get methane of the same purity as in fossil gas

Any delay in allowing biomethane in the existing grid draws a risk of increasing the costs of natural gas consumption, both for non-household and household customers, the accompanying note reads.

Biomethane is usually obtained by processing biogas to get methane of the same purity as in fossil gas. The gaseous biofuel can also be produced from clean hydrogen and carbon dioxide. The EU allows incentives for biomethane facilities. Some countries in Southeastern Europe, like Greece, are developing the legal framework for embracing the technology within their energy transition.

Share in gas network planned to reach 10% by 2050

Romania is planning a 5% share of biomethane in its natural gas network in 2030 and to double it by mid-century. The sectors of waste management and agriculture can produce an estimated 501,000 tons of oil equivalent in 2050.

The EU is imposing strict requirements on the removal of biodegradable organic matter from wastewater and the reduction of food waste, the ministry noted. Together with agricultural and organic municipal waste, they are the main raw materials for the production of biogas.

According to the proposal, publicly announced business plans can secure a share of renewable gases in the grid up to 1.5%. However, without an urgent legislative intervention, the investments can’t materialize, the Ministry of Energy warned. The draft directive would update the definitions of guarantees of origin, biogas, biomethane, natural gas, renewable gases and biomethane producers.

BSOG Energy, Engie Romania at forefront of upcoming biomethane investment wave

As for other developments in the segment, BSOG Energy (BSOGE), a subsidiary of Black Sea Oil and Gas, recently hired industrial services provider Bilfinger for a biomethane facility in Alba county in Transylvania.

Earlier, BSOGE said it would invest EUR 30 million in the construction of a biomethane plant. It has signed deals with milk producer DN Agrar Group for up to 15 MW in capacity, with the possibility of exceeding 20 MW in later stages.

In April, the firm partnered with Unigrains Trading in a project for a biomethane and organic fertilizer facility. They estimated the investment at EUR 65 million, for 57 MW of biomethane capacity and over 250,000 tons of organic fertilizers per year. Parent company BSOG is controlled by controlled by investment firm Carlyle.

Engie Romania launched plans a year ago with Heineken to build a biodigester for brewery waste

Last November, French-owned Engie Romania obtained the first license in the country for biogas and biomethane supply. Earlier it established a partnership with Heineken for decarbonization projects in three breweries in Romania, including heat pumps and one biodigestion system.

The firm is the largest supplier and distributor of natural gas in the country, as well as an electricity producer and supplier.

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August 4, 2025
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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 7, 2025
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EU’s Modernisation Fund disburses EUR 3.66 billion for clean energy projects in nine countries

Energy modernization projects in nine member states of the European Union will receive a total of EUR 3.66 billion from the Modernisation Fund, in the largest disbursement to date from the facility financed by carbon pricing revenues, according to a press release from the European Commission. The selected projects focus on renewable energy, grid upgrades, energy storage, and energy efficiency.

The largest beneficiary of the latest disbursement is Poland, which will receive EUR 1.33 billion for its projects, followed by the Czech Republic, with EUR 1.05 billion, and Romania, with EUR 712.3 million. Hungary will get EUR 181.3 million, Croatia EUR 170 million, and Greece EUR 113.6 million. The rest will go to Latvia (EUR 40 million), Lithuania (EUR 37 million), and Slovenia (EUR 19.7 million).

Croatia will finance renewable heat production and zero-emission transportation, and Slovenia will upgrade power grid to integrate renewables

In Croatia, EUR 80 million will be used for the production and use of heat from renewable energy sources and energy efficiency improvement in heating and cooling systems. The rest will go to investments in zero-emission transportation. In Slovenia, the funding will facilitate renewables integration through the modernization and development of the electricity transmission and distribution network.

Greece, which became a Modernisation Fund beneficiary in January 2024, intends to replace urban diesel buses with new electric buses, improve energy efficiency in municipal swimming pools, and switch the heating and cooling systems in its greenhouse infrastructure to renewables.

In Romania, the funding will help improve the energy efficiency of facilities covered by the European Union’s Emissions Trading System (EU ETS), support the contract-for-difference (CfD) scheme for onshore wind and solar, and finance the installation of solar and wind power plants for self-consumption in the agricultural and food sectors and public institutions. It is also intended for investments in new solar, wind, and hydropower capacities and to support the modernization and rehabilitation of the district heating network.

In the Czech Republic and Lihtuania, the funding will support energy storage projects

Other example projects include investments in storage capacity for renewable electricity in the Czech Republic, investments in large-scale energy storage capacities in Lithuania, and a clean air program in Poland that focuses on energy efficiency improvements and heat source replacements in single-family houses, according to the press release.

The investments will reduce greenhouse gas emissions in the energy, industry, and transportation sectors, improve energy efficiency, and help the beneficiary states meet climate and energy targets, the commission said.

The projects will also help improve people’s everyday lives, by reducing bills, improving public services, creating jobs, and making the energy transition real, fair, and beneficial for all, according to Teresa Ribera, the European Commission’s Executive Vice-President for Clean, Just and Competitive Transition.

With this latest round of funding, the total disbursements from the Modernisation Fund since January 2021 have climbed to EUR 19.1 billion. The fund is financed by revenues from the auctioning of emission allowances under the EU ETS.

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July 3, 2025
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EU outlines measures for 90% emissions cut by 2040

The European Commission proposed an amendment to the European Climate Law, setting a 2040 target of a 90% reduction in net greenhouse gas emissions from the 1990 level. The outlined measures would give certainty to investors, promote innovation and business competitiveness and increase energy security, according to the European Union’s executive body.

The EU is closing in on its 2030 goal to slash annual net emissions by 55% from the 1990 baseline, according to the European Commission’s recent report on national energy and climate plans (NECPs). It is part of the efforts to reach climate neutrality by mid-century. Today the EU’s top executive body formally outlined the proposal for the next intermediate target – 90% by 2040.

It is in the form of an amendment to the European Climate Law, which entered into force in July 2021. In the meantime, the 27-member bloc adopted a 2030 legislative package known as Fit for 55.

The European Parliament and the Council of the EU now need to discuss and adopt the amendment.

Nature-based and industrial carbon removals will play an increasingly important role in reaching the targets, the European Commission pointed out. It implies domestic permanent carbon removals within the Emissions Trading System (EU ETS) to compensate for residual emissions from hard-to-abate sectors. Such systems need to scale up significantly by 2040, the commissioners said.

More pragmatic, flexible trajectory toward 90% reduction in emissions by 2040

The proposal sets out a more pragmatic and flexible way to reach the milestone, the European Commission claimed.

“Aligned with the EU Competitiveness Compass, Clean Industrial Deal and Affordable Energy Action Plan, the proposed 2040 climate target takes fully into account the current economic, security and geopolitical landscape and gives investors and businesses the predictability and stability they need in the EU’s clean energy transition. By staying the course on decarbonisation, the EU will drive investment in innovation, create more jobs, growth, increase our resilience to impacts of climate change and become more energy independent,” the statement adds.

Von der Leyen said industry and investors require a predictable direction on the path to the climate goal

“As European citizens increasingly feel the impact of climate change, they expect Europe to act. Industry and investors look to us to set a predictable direction of travel,” said European Commission President Ursula von der Leyen.

Today’s proposal is based on an impact assessment and advice from the Intergovernmental Panel on Climate Change (IPCC) and the European Scientific Advisory Board on Climate Change. The adoption follows engagement with member states, the European Parliament, stakeholders, civil society and citizens since the commission’s recommendation in February 2024.

EU eyeing international carbon credits

The commission vowed to consider a limited role for high-quality international carbon credits, starting in 2036, and greater flexibility across sectors to help achieve targets in a cost-effective and socially fair way. For instance, a member state would have the possibility to compensate for a struggling land use sector with an overachievement in reducing emissions from waste and transportation.

Emphasis is also on the competitiveness of the European industry and a level playing field with international partners. Among the guidelines is technological neutrality.

Fiscal incentives are under consideration for clean tech and industrial decarbonization projects.

The commission highlighted its Clean Industrial Deal State Aid Framework, adopted last week, and the simplification of the Carbon Border Adjustment Mechanism (CBAM). It also issued a recommendation on tax incentives for investments in clean technologies and industrial decarbonization.

Measures on affordable energy to scale up manufacturing of grid components and support power purchase agreements, the pilot for the upcoming Industrial Decarbonisation Bank, the forthcoming Chemicals Industry Action Plan and the sectorial dialogues with stakeholders are among the actions that will help deliver the Clean Industrial Deal, the commissioners explained. Their draft seven-year budget, officially called Multiannual Financial Framework, is due to be unveiled next month.

WindEurope urges for annual targets for renewables

Reacting to the announcement, WindEurope said EU member states would need to translate the 90% ambition into clear annual goals for the deployment of wind and other renewables for the period 2031-40.

“Otherwise the 2040 target will remain academic,” the organization underscored.

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June 26, 2025
by in News

Greece to rely on carbon price, renewables potential in green hydrogen development

Despite early efforts to develop green hydrogen and its first regulatory framework, Greece finds itself on a steep curve.

The government has presented the first law on hydrogen and renewable gases in parliament. At the same time, refineries and other industries are working on projects that will determine green hydrogen’s cost-effectiveness.

However, a significant obstacle is the government’s unwillingness to support the new technology, either through subsidies or other financial instruments. The Ministry of Environment and Energy has specified that no upcoming technology would benefit from public funds. The goal is to maintain a low cost for the consumer during the energy transition.

According to Professor Pantelis Kapros from the National Technical University of Athens (NTUA), it means hydrogen will have to rely almost exclusively on the price of carbon. As the European Union’s European Trading System (EU ETS) is about to enter its second phase in 2026, the price of carbon allowances is projected to rise steeply.

Even so, market participants estimate that a ton of carbon dioxide equivalent would need to cost EUR 140, two times more than today, to make green hydrogen competitive against grey hydrogen, which is produced from natural gas.

Exports and power prices added to the equation

Regardless, Greece sees an opportunity to produce and export green hydrogen. The reason is its high renewables potential and production. The ever-increasing photovoltaic capacity has caused an overabundance of energy during the day. More demand is needed to balance the system and hydrogen can provide a way out.

Tsafos: We want to become a supplier

The hope is that the low renewable energy cost, combined with potential interest in shipping hydrogen abroad, will justify long-term investments.

“Our view is that as long as the market is interested, we want to become a supplier,” Deputy Minister of Environment and Energy Nikos Tsafos said at the Hydrogen & Green Gases Forum in Athens.

A potential problem is that green hydrogen plants are not expected to be viable if they only produce during the day, when renewable energy prices are usually lower. “Ten hours of operation are not enough to support producers and there are also technical issues to solve,” said Dimitris Kardomateas, head of the Center for Renewable Energy Sources and Saving (CRES).

He also pointed to the average daily wholesale power price, as it is higher in Greece than in most other European markets. It should be noted that electricity makes up about 70% of the total operating cost of electrolyzers.

Biomethane considered more mature

On the other hand, biomethane is considered much easier to develop.  The technology depends less on power prices and also faces fewer technical hurdles. “Biomethane has a clear role, especially through its ability to enter the gas network, and we want to utilize it”, said Tsafos.

Gas distribution company Enaon EDA emphasized its readiness to include biomethane in its network. Its CEO Barbara Morgante noted that a study is underway to pinpoint the various existing and planned biomethane production plants around the country, as well as their proximity to Enaon’s network.

Biomethane is usually obtained by processing biogas to get methane of the same purity as in fossil gas. The renewable fuel can also be produced from clean hydrogen and CO2.

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May 15, 2025
by in News

Belgrade Energy Forum 2025 – energy market reforms accelerate integration into EU

Electricity market coupling with neighbors in the European Union is a major factor in the EU integration of Energy Community contracting parties and the Western Balkans, alongside deeper coordination within the region, the establishment of energy interconnections, investments in renewables and progress in carbon pricing, top officials pointed out at the opening of Belgrade Energy Forum – BEF 2025.

Founder and Editor of Balkan Green Energy News Branislava Jovičić said the current changes in the energy sector can already be called an energy revolution.

The third Belgrade Energy Forum, BEF 2025, started today in Serbia’s capital city, welcoming four hundred participants from more than 30 countries from the region, Europe and beyond. The two-day conference, organized by Balkan Green Energy News, features eight panels with over 50 officials, executives and prominent energy experts.

Serbia was the first in the region to meet the preconditions for electricity market coupling with neighboring countries in the European Union and Energy Community, said Minister of Mining and Energy Dubravka Đedović Handanović. She added that the technical process would be completed within 18 months after the EU Agency for the Cooperation of Energy Regulators (ACER) and European Network of Transmission System Operators for Electricity (ENTSO-E) conduct the necessary steps.

Electricity market coupling will be completed within 18 months when the technical process starts

“It will be a historic event for our country for its benefits for citizens and companies, as it will ensure a more stable electricity supply and access to more affordable energy prices. It will turn us into an equal member within the region but also the EU as concerns the energy sector,” Đedović Handanović stated.

The SEEPEX power exchange has already prepared implementation projects with its counterparts in Hungary and Bulgaria for market coupling on their borders, the minister stressed.

Up to EUR 15 billion needs to be invested in energy

Đedović Handanović also pointed out that domestic and European regulators certified Serbia’s gas transmission system operator Transportgas for the first time. The start of construction of the Serbia-Hungary oil pipeline is expected to begin early next year at the latest, the minister said.

The baseline for the development plan for energy infrastructure and energy efficiency should be completed by the end of May, she revealed. It identifies the need for EUR 14 billion to EUR 15 billion in investments in the next ten years, according to Đedović Handanović. Renewables and new hydropower potential account for EUR 7 billion, she said.

Serbia will double the electricity transmission capacity with Hungary and increase it with Bulgaria, the minister asserted.

Serbia is frontrunner in region with its progress toward market coupling

As the Western Balkan region confronts the trailing trilemma of decarbonization, affordability, and energy security, the need for an accelerated integration with the European Union has never been more urgent, Energy Community Secretariat Director Artur Lorkowski said.

The organization provides a platform for the process, a strategic window of opportunity to inspire market confidence now, not in years or months to come, he explained. Lorkowski said it implies deeper coordination among Energy Community contracting parties in removing cross-border bottlenecks and harmonizing market operations.

Above all, there is an urgent need to move forward on electricity market integration with the EU, so the region can fully benefit from it in 2027, he noted, underscoring that Serbia is the frontrunner.

Exporters of electricity to the EU can attend a technical consultative meeting in Brussels on July 1

The Carbon Border Adjustment Mechanism (CBAM) is another urgent priority, Lorkowski said. He announced that the Energy Community Secretariat and European Commission would organize a technical consultative meeting in Brussels on July 1 for electricity exporters to the EU.

The establishment of domestic carbon pricing mechanisms is inevitable, Lorkowski warned. The question is how to introduce domestic carbon pricing and keep energy prices affordable for households and competitive for businesses, he told the audience at BEF 2025.

“The way forward is clearly defined, and the conditions linked to energy market reform and decarbonization are well known. And I’m, frankly speaking, very optimistic that progress on these issues can be substantive in months and years to come,” the secretariat’s head stressed.

Jovičić: Energy revolution underway

Energy and climate issues are among the most important ones in the world today, as well as in Southeastern Europe, Founder and Editor of Balkan Green Energy News Branislava Jovičić said. All stakeholders, aware of the necessity of rapid changes and prudent solutions, are working toward a secure energy supply and decarbonization, she added.

“Last year we spoke about the energy transition. This year we can freely call the changes in the energy sector an energy revolution,” Jovičić stated. The five pillars of the energy revolution are solar and wind power, battery storage, digitalization, nuclear energy and decentralized generation and consumption, she stressed.

Balkan Green Energy News is a leading energy media website in the region and one of the top 50 in the world, Branislava Jovičič said.

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