Serbia prepares to introduce carbon pricing

The country, in particular, assessed the impact of EU regulation on the electricity sector

Serbia is preparing to introduce carbon pricing, according to Jovana Joksimovic, Assistant Minister of Mining and Energy for International Cooperation and European Integration, Balkan Green Energy News reports.

According to her, the authorities are preparing a comprehensive analysis of carbon pricing for all products that will be affected by the European CBAM. In addition, the ministry has assessed the impact of EU regulations on the country’s electricity sector.

“Serbia is the only Energy Community contracting party prepared to implement emissions monitoring, reporting, and verification (MRV) system by transposing the relevant EU legislation. MRV is a prerequisite for introducing a carbon pricing mechanism and can facilitate the implementation of CBAM,” Joksimovic said.

She recalled that the EC had adopted alternative carbon pricing options for the contracting parties of the Energy Community, including carbon taxes and a fixed-price emissions trading system prior to accession to the European Union.

At the same time, Serbia is concerned about the discrepancy between the two CO2 emission factors set by the European Commission: one directly for electricity, the other for electricity used in the production of products subject to CBAM (for calculating indirect emissions).

According to Jokimovic, the economic consequences of implementing the mechanism need to be carefully considered, especially in view of its potentially disproportionate impact on the Western Balkans.

“We expect the European Commission to accept the national electricity mix emission factor in the application of CBAM for electricity, meaning that the cost of the levy decreases as the share of renewable energy increases,” she added.

There are also concerns that the introduction of CBAM could disrupt current efforts to integrate the electricity market.

Earlier, the National Alliance for Local Economic Development (NALED) called on the authorities to protect Serbia’s energy-intensive industries from the impact of CBAM. They warned that the mechanism would threaten jobs and businesses in this sector.

It should be recalled that the European Network of Transmission System Operators for Electricity (ENTSO-E) has proposed that the European Commission extend the CBAM transition period for electricity by one year, until January 1, 2027.