If the Western Balkan countries act quickly and introduce their own coal prices for electricity generation, they could mitigate the impact of the Cross-Border Adjustment Mechanism (CBAM) and raise up to €4.2 billion per year to finance a sustainable energy transition.
Namely, this is written in the report of the “CEE Bankwatch Network”, one of the largest networks of environmental non-governmental organizations in Central and Eastern Europe with headquarters in Prague.
“CBAM will come into force in full on January 1, 2026. However, the lack of preparation by Western Balkan governments increases the risk of a catastrophic and unfair energy transition. Under CBAM, importers of certain goods from the EU, including electricity, outside the bloc will have to pay for the carbon dioxide emissions associated with the production of such goods in the exporting country. This will make imports into the EU from countries with high levels of coal, oil and gas use much more expensive than before. Electricity importers from “The EU from the Western Balkans – Italy, Croatia, Hungary, Romania, Bulgaria and Greece – will have to find other suppliers or face high costs of CBAM. Electricity imports to the EU will likely decrease overnight, reducing the revenues of electricity companies in the Western Balkans. Bosnia and Herzegovina, Montenegro and North Macedonia will not pay fees for CBAM themselves, but will be affected by the decrease in electricity export revenues, as well as to some extent Serbia.”
It is added that until now the EU has helped in the maintenance of highly polluted coal-fired thermal power plants in the Western Balkans.
“If electricity exports continue at recent levels, the EU’s annual income from this alone could reach almost 965 million euros.
If the governments of the Western Balkan countries had started preparations for CBAM earlier, instead of allowing the EU to generate revenue from electricity exports, they could have generated revenue for their own energy transition by introducing national coal pricing systems.
However, by introducing domestic coal pricing, countries could mitigate the impacts of CBAM and generate significant revenues to spend on a just and sustainable energy transition,” the CEE Bankwatch Network report states.
Does this mean that coal prices could skyrocket next year in Bosnia and Herzegovina in order for the power companies to compensate for the money that would be lost due to the drastic reduction in electricity exports?
Nihad Harbaš, an energy expert, tells “Nezavisne novine” that there has been a debate for years about the impact of the CBAM regulation on the electricity sector, and pending the financial commitment of CBAM in 2026, the whole story has intensified.
“BiH has over 70% of its exports to EU countries. With an additional tax (CBAM in this context) on electricity, the prices at which it is imported into the EU from BiH would increase for importers in the EU, which would only mean that the EU will turn to other sellers who have green energy or that exporters from BiH will reduce the price of electricity, if at all for export,” explains Harbaš.
According to him, this would directly affect our country’s total export of electricity, reducing the total export capacity, a part of it might be “shifted” to Serbia and Montenegro, but it is undeniable that the export would be lower, they write. Independent newspaper.
“With lower exports, we get a less favorable situation in interstate exchanges, and that can only mean more expensive electricity for BiH citizens. The conclusion is that we must not wait for the situation to unfold, that is, potential prolongations and exemptions, but try to partially protect ourselves with the internal system of taxation of emissions, the introduction of larger capacities from RES and other mechanisms,” concluded Harbaš.
