Bosnia-Herzegovina intends to implement a system for CO2 pricing and trading by January 2026, as the country aims to avoid paying the European Union's carbon border tax. Indeed, the EU will apply a Carbon Border Adjustment Mechanism (CBAM) from 2026 on energy-intensive products (such as iron, steel, aluminum, cement, fertiliser) and electricity from countries without a national carbon pricing scheme.
In addition, the two entities that make-up Bosnia-Herzegovina - the Federation of Bosnia and Herzegovina and the Republika Srpska - have pledged to invest a total of BAm3.6bn (€1.8bn) in renewables over the next five years. The Federation of Bosnia and Herzegovina (FBiH) will invest BAM1.5bn (€770m) on renewables over the next three years to add about 600 MW of capacity. Similarly, the Republika Srpska aims to add 600 MW of renewable projects over the next five years worth about BAM2.1bn (€1.1bn). However, the Federation of Bosnia and Herzegovina will continue to operate most of its coal-fired plants until at least 2035.