Bosnia and Herzegovina: EPBiH to calculate CO2 costs

, SEE Energy News

The goal of Bosnian state-owned power utility EPBiH is to find ways for sustainable and fair transition of the electricity sector while maintaining security of energy supply, by taking into account the specific circumstances in BiH, especially in the coal sector.

Director of the Energy Community Secretariat Janez Kopac and the Minister of Energy, Mining and Industry of the Federation of Bosnia and Herzegovina (FBiH) Nermin Dzindic discussed the obligations stemming from the Energy Community Treaty with the General Director of EPBiH Admir Andjelija.

A Letter of Intent was signed by which EPBiH accepts the Energy Community initiative for the introduction of internal calculation of CO2 costs, which envisages a self-imposed internal price mechanism for CO2 emissions from thermal power plants, as a transitional measure to facilitate the implementation of emission reduction plans.

With the concept of internal calculation of CO2 costs, EPBiH decides in advance to reserve funds and create an internal fund for the needs of transition to low-carbon economy. At the same time, such a calculation serves as a preparation for business conditions with the payment of a CO2 fee that could occur in a few years.

It is especially important to determine the future higher production costs and their impact on electricity sales prices and market competitiveness, as well as on decisions to invest in new generation capacities. In a letter of intent, EPBiH, the first power utility in BiH to do so, confirms its commitment to make a fair contribution to the decarbonization and modernization of the energy sector by introducing instruments to calculate CO2 costs in order to actively accelerate the transition to a climate-sustainable energy sector. The aim is also to identify exposure to the risks of future regulation and climate policy, eliminate business and investment risks in relation to future carbon pricing legislation, seize the opportunities created by a low-carbon economy, and choose the right transition path compatible with long-term sustainable development. By accepting the initiative of the Energy Community, EPBiH expresses understanding that the process of decarbonization is inevitable and an obligation based on the Energy Community Treaty and other international agreements.

The Sofia Declaration on a Green Agenda for the Western Balkans commits member states to continue aligning with the EU ETS, as well as to work on introducing other carbon price instruments to promote decarbonization in the region and achieve net zero carbon emissions by 2050.