Serbia to introduce national carbon tax from 2026

On January 1 next year, laws on greenhouse gas emissions and imports of carbon-intensive goods will come into force in Serbia, according to Balkan Green Energy News.

Both taxes will be levied at a rate of €4 per ton of CO2 equivalent. According to the publication, this is the country’s response to the European Cross-Border Carbon Adjustment Mechanism (CBAM) and its equivalent. However, several subordinate acts still need to be adopted to ensure compliance with the new legislation.

The adopted laws aim to reduce pollution, increase energy efficiency, stimulate the introduction of renewable energy, and ensure a more stable position for Serbian industry in domestic and international markets.

The first of the two taxes, on greenhouse gases, applies to large industrial polluters in the cement, fertilizer, iron and steel, aluminum, and electricity sectors, which are required to have a license for their emissions. Among other things, this law provides for the possibility of granting incentives to taxpayers who implement projects aimed at decarbonisation.

The law on the tax on imports of carbon-intensive products does not apply to electricity due to technical limitations and the lack of a clear taxation methodology. It also applies only to businesses that import five or more tons of certain products per year. The tax covers goods from four groups: cast iron or steel, cement, fertilizers, and aluminum.

It should be recalled that in the summer of this year, Serbia called for the phased introduction of the European Cross-Border Carbon Adjustment Mechanism (CBAM) in order to maintain the competitiveness of the national economy. Belgrade fears an economic shock from a sudden increase in carbon duties to €70/t.