Panel III – Carbon Pricing – Not Just a Challenge but an Opportunity!

The energy transition in Bosnia and Herzegovina is a reality. The dynamics with which it will be implemented depends on the results of public discourse in prioritizing consumers’ expectations, bearing in mind a wide range of social, economic, and environmental requirements, and risks. Carbon neutrality on the one hand, and socio-economic development on the other, set a network of different, sometimes completely opposite demands on the energy transition. How much BiH is ready to respond to this complex matrix depends precisely on the quality of public discourse, and the connection of different levels of interest groups targeting most segments of society. 

The EU has already adopted a timeline for rolling out the Carbon Border Adjustment Mechanism (CBAM) which will also apply to Bosnia and Herzegovina if the right measures are not taken. MOFTER announced a process of preparation and adoption of emission trading scheme before the end of 2025. This process is currently supported by the Word Bank and EU. Without carbon pricing on carbon intensive products manufactured in non-EU countries and intended for export to the EU, BiH will face the burden of the payment differential between the carbon price in the EU and in the producing country. This may also apply to electricity exports produced by burning coal and put a disadvantage in activities related to the coal mining sector. The possibility of both coal-based electricity incumbents for cross-subsidization of household consumers could seriously deteriorate. Some companies in BiH are already aware of the new trends, such as EP BiH, who was among the first to introduce the internal carbon pricing.

This panel will address the issues of carbon pricing (ETS and CBAM) and what effect they might have on BiH, particularly on how policymakers, economists, and energy experts can support and influence the affordability of the energy transition.