Companies from Bosnia and Herzegovina could lose more than 250 million euros annually if the country does not join the cross-border carbon export tax payment system (CBAM) introduced by the European Union to encourage non-member countries to stop producing electricity from fossil fuels.
From October 1, 2023, the European Commission introduced the Carbon Border Adjustment Mechanism (CBAM), which applies to non-member states that export goods to the EU, reports Hina.
Until the beginning of 2026, those countries can join that mechanism and pay cross-border tax within those countries, and if they don’t do it, their goods will be additionally taxed in the EU.
“We came to the result that the possible losses for BiH, if we do not soon enter the carbon trading system, would amount to between 150 and 250 million euros,” said the president of the Foreign Trade Chamber of BiH Vjekoslav Vuković on Tuesday.
He explained that companies from BiH export 70 percent of goods to the European Union market and warned that goods will become uncompetitive if companies have to pay additional taxes in the EU.
CBAM includes products from the fields of cement, aluminum, fertilizer, electricity, iron and steel production. By introducing the obligation to pay a cross-border tax, the European Union is trying to encourage non-member countries to start the energy transition and invest in renewable energy sources.
Bosnia and Herzegovina produce the largest amount of electricity by burning coal in thermal power plants. Out of a total of 17 terawatt hours of electricity, as many as 10 relate to production in thermal power plants in two power companies based in Sarajevo and Trebinje. Only Elektroprivreda HZHB with headquarters in Mostar produces all energy from renewable sources using water and wind.