Bosnia and Herzegovina (BiH) continues to lose ground as a regional electricity exporter, with the country’s electricity trade balance narrowing sharply and growing concerns over the increasing impact of the EU Carbon Border Adjustment Mechanism (CBAM). Once recognized for exporting substantial volumes of electricity abroad, BiH is now increasingly relying on imports to cover domestic demand.
Official data show that electricity exports in the first two months of 2026 amounted to €63.1 million, down from €75.1 million in the same period a year earlier. This marks a decline of roughly €11.8 million and confirms a downward trend that has been visible for some time. Export revenues had already slipped to €65.6 million in January–February 2024, highlighting the gradual erosion of BiH’s position in regional electricity trade.
Imports also declined compared to last year, but they remain historically high. BiH purchased €51.6 million worth of electricity in the first two months of this year, compared with €78.3 million in the corresponding period of 2025. Even with this reduction, import levels remain well above early 2024 levels, when electricity purchases from abroad totaled only €13.8 million.
A more favorable hydrological situation at the start of the year may have helped reduce the need for imports, as stronger water inflows likely supported hydropower generation. Nevertheless, the broader picture points to a system under increasing strain, with domestic production no longer delivering the export surplus that once characterized the market.
Additional pressure is coming from the European Union’s Carbon Border Adjustment Mechanism (CBAM), which has become a growing concern for BiH’s electricity sector. The measure imposes a carbon-related cost on electricity imports into the EU from countries that do not apply equivalent carbon pricing. This creates a new competitive disadvantage for BiH’s exports and raises the stakes for domestic regulatory reform.
Officials in Sarajevo have warned that the country urgently needs legislation governing the electricity regulator, transmission system, and electricity market. Without such reforms, revenues linked to carbon-related charges would effectively flow to EU institutions, rather than staying within BiH’s energy system. According to estimates prepared with technical support from the EU for Energy project, BiH could face losses of up to €644 million under the most adverse scenario in the electricity segment alone. This figure reflects the scale of risk the sector faces without effective domestic action.
Energy analyst Nihad Harbas noted that electricity markets are shaped by more than just price, as supply security and the ability to meet end-user demand remain the top priority. He said BiH may still remain competitive during certain periods of the year, depending on market fluctuations, Europe’s generation mix, and the variable output of renewable energy sources.
Even so, he argued that waiting for market conditions to improve is not a viable strategy. In his view, introducing a domestic carbon pricing framework, accelerating decarbonization, and expanding investment in renewable energy are the only durable ways to protect BiH’s electricity exports from CBAM and similar measures, which are likely to make regional electricity trade increasingly challenging.
