The European Green Deal is an opportunity for development in BiH and the country can modernize its energy system and make it competitive and sustainable with regard to the environment, experts from RESET said in a policy brief on the energy sector and its perspectives.

Regional center for sustainable energy transition – RESET, a new think tank gathering experts and members of the academic community in Bosnia and Herzegovina, published its first strategic document on the country’s energy policy “EU Green Deal – the last chance for sustainable and inclusive development of energy sector in BiH”.

By promoting an energy transition that would decarbonize BiH in the decades to come and lead to a switch from fossil fuels to renewable energy sources alongside the electrification of the heating and transportation sectors and improvements in energy efficiency, RESET plans to become an influential stakeholder in the creation of a comprehensive sustainable energy transition policy.

The center’s activities are based on a multidisciplinary and innovative approach in creating policies and transformation measures for the energy sector while taking into account the aspects of socioeconomic sustainability and just transition.

Joining EU Green Deal would open way for energy investment

The authors of the policy brief on BiH’s energy sector and its perspectives are Mirza Kušljugi?, Vjekoslav Domljan, Damir Miljevi? and Ognjen Markovi?. The experts analyze the effect of the European Green Deal on BiH and other Western Balkan countries, but also underscore that joining the plan enables states in the region to obtain the necessary investment in sustainable energy capacities.

The European Green Deal envisages complete decarbonization of the energy sector by 2050. and the reduction of greenhouse gas emissions by 55% by 2030, with the possibility to increase the ambition in the meantime, as well as total decarbonization by mid-century.

The first step in the process for all EU countries, but also the countries in the region, including BiH, is to bring and implement a National Energy and Climate Plan – NECP.

EU preparing tax on carbon dioxide

The authors warn that Western Balkan countries that don’t opt for decarbonization can expect the union to introduce measures to protect its climate policy, energy sector, and the economy from unfair competition. They point to the possibility, among others, for a cross-border tax on carbon dioxide, the so-called Carbon Border Adjustment Mechanism or CBA, to be rolled out by mid-2021.

Namely, power exports from non-EU members from the region that don’t apply the emissions trading system or ETS (a scheme for limiting CO2 emissions and trading the allowances) into the EU will be burdened with an additional levy, CBA, on the export price of electricity.

Also, the introduction of the CBA mechanism is not intended only for power exports but also for exports of goods that are produced by using electricity from fossil fuels.

In order for BiH to participate in the European Green Deal, it must regulate the electricity, natural gas, oil and derivatives markets, and separate energy companies, the policy brief reads.