The Aarhus Center in Bosnia and Herzegovina (BiH) has raised serious concerns about the planned Southern Gas Interconnection project between Croatia and the Federation of Bosnia and Herzegovina (FBiH), questioning both its economic feasibility and environmental sustainability.
The project, jointly promoted by Croatian operator Plinacro and BH-Gas, envisions a 243-kilometer pipeline with a capacity of 1.5 billion cubic meters per year—six times BiH’s gas consumption in 2022. It aims to transport liquefied natural gas (LNG) from Croatia’s Krk terminal and potentially Azerbaijani gas via the Ionian-Adriatic pipeline, expanding gas access to Herzegovina and other underserved regions.
However, critics argue that the initiative contradicts BiH’s commitments to decarbonize by 2050. They warn that building long-term fossil fuel infrastructure undermines the shift toward clean energy and risks locking the country into a dependency on gas, especially in light of the recent energy crisis that revealed the vulnerabilities of such reliance.
Aarhus Center’s analysis highlights several key issues:
- Outdated planning: BiH still lacks an updated energy strategy and has yet to adopt its Integrated Energy and Climate Plan (NECP). The current energy framework, last revised in 2018, does not reflect modern climate goals or EU-aligned environmental standards.
- Overstated benefits: The project’s feasibility study—funded by the EU and completed in 2018—relies on outdated demand forecasts. Even under optimistic scenarios, by 2049 the pipeline is projected to operate at only one-third of its capacity.
- Environmental impact: Burning the transported gas could produce an estimated three million tons of CO₂ annually, a figure not adequately addressed in project assessments. The study also fails to consider the implications of future carbon pricing and decarbonization policies.
- Dubious cost estimates: The estimated project cost of €100 million is seen as unrealistic, with similar regional projects showing significantly higher expenses due to inflation, terrain challenges, and regulatory requirements.
- Funding challenges: With the European Investment Bank and other major institutions moving away from financing fossil fuel infrastructure, securing investment remains a significant hurdle. Past failures—such as the EBRD-backed but non-operational pipeline in central Bosnia—also fuel skepticism.
- Early-stage and unresolved issues: The project still lacks secured funding, final approvals at the state level, resolved land expropriation, and plans for additional distribution infrastructure.
Although the United States has strongly supported the initiative—likely to promote its LNG exports—the fast-tracked legislation passed in late 2024 and early 2025 has drawn criticism for containing provisions that may undermine environmental safeguards.
Given that natural gas makes up only about 3% of BiH’s current energy mix, the Aarhus Center believes the country has a unique opportunity to avoid deepening its fossil fuel dependence. Instead of investing public resources and political capital in gas infrastructure, the report calls for a strategic focus on clean, renewable energy solutions that align with long-term climate goals.
With many obstacles still unresolved, the Southern Gas Interconnection project appears unlikely to be completed within the next decade.
