BiH's NECP: coal power plants to be closed, 2 GW of renewables installed

• Bosnia as well as Herzegovina's draft nationwide energy and also climate plan up until 2030 envisages the shutdown of a part of coal-fired power plant capacity as well as the addition of renewable electricity plants of more than 2,000 MW in total amount. The document anticipates the intro of the European Union's Emissions Trading System (EU ETS) design to stay clear of paying the EU's upcoming CO2 border tax.

The draft nationwide energy and also climate plan (NECP) of Bosnia and also Herzegovina existed for the first time at the Energy Summit 2023 in the country's only seaside community of Neum.

Admir Softić, Assistant Minister of Foreign Trade and also Economic Relations, said the final proposal of NECP must be submitted to the Energy Community Secretariat by June.

The plan envisages a reduction of greenhouse gas emissions by 41.21% from the 1990 level to 15.65 million tons of CO2, a renewable energy share of 43.62%, key energy consumption of 6.84 million tons of oil matching as well as final energy consumption of 4.34 million tons of oil matching. Measures to attain the goals are additionally an integral part of NECP.

If BiH does not carry out the measures, including the establishment of a power exchange and the intro of an EU ETS design, both companies and also citizens will endure, Softić cautioned.

He said all essential decisions require to be made asap, such as the fostering of a roadmap for the transition of coal regions to enable accessibility for BiH to funds for a coal phaseout.

BiH needs to ask EU establishments to deal with the nation's coal the same as their equivalents in the EU so that they can get the same decarbonization funding, Softić added and warned that BiH can not be decarbonized without such funds and personal capital.

He kept in mind that BiH has accepted the responsibility to prepare the NECP, reduce CO2 emissions and also come to be climate neutral by 2050 by authorizing the Energy Community Treaty, the Sofia Declaration as well as the Paris Agreement.

No more coal power plants will certainly be developed

The energy sector is responsible for greater than 70% of emissions in BiH, so it must be transformed, he claimed. NECP envisages the shutdown of coal power plants with a total capacity of 410 MW and no new projects while a few of the existing ones would be switched to biomass.

The draft plan is to install over 2,000 MW of renewable electricity plants, of which 1,500 MW in solar energy, Softić stated.

He particularly worried the plan to establish arranged power and natural gas markets and also argued that without a power exchange there is no energy transition.

BiH will certainly soon be the only country in the region without an exchange, so the Ministry of Foreign Trade as well as Economic Relations is working to transform that, the main explained.

Amongst the anticipated measures is the intro of systems for trading emissions and also guarantees of origin. He pointed out that BiH plans to develop an EU ETS model to prevent paying taxes under the EU's Carbon Border Adjustment Mechanism (CBAM).

According to the associated analysis, BiH would contribute EUR 220 million a year to the EU budget with CBAM. With an EU ETS model, the residential budget would get EUR 440 million a year. The estimation was produced a CO2 price of EUR 50 per ton of co2 comparable and only for electricity.

Highlighting that more than 70% of BiH's exports go to the EU, Softić emphasized it would certainly be a catastrophe if the country does not meet its responsibilities.

In the NECP, required financial investments are estimated at EUR 6.7 billion to EUR 8 billion. They include a just transition for the country's coal regions, for which in between EUR 465 million to EUR 1.4 billion would be required, the document shows.

The preparation of the plan started in 2019, led by the Ministry of Foreign Trade and also Economic Relations and also entity ministries accountable of energy as well as the atmosphere. GIZ, USAID, UNDP, as well as the World Bank.