Sarajevo Energy and Climate Week (SECW), a conference of international character, designed as five climate areas for five conference days, will be held from September 23 to 27, 2024. The first day of the conference is dedicated to carbon neutrality, the second to just transition and critical mineral raw materials, the third to shaping the future of electricity, then a whole day is dedicated to Emeric Blum, and on the last day they will talk about shaping energy security and independence.
Given the current challenges and opportunities, SECW 2024 represents an important platform for discussing the future of energy and climate policies in Bosnia and Herzegovina and the Western Balkans region. Participants will have the opportunity to exchange experiences and ideas that can contribute to sustainable development and reduction of carbon emissions in the region and help decision makers.
Ahead of the second Sarajevo Energy and Climate Week 2024, we spoke with Mirsad Jasarspahić, president of the FBiH Chamber of Commerce, about the key panels at SECW 2024.
How do you see the role of the EU ETS in the context of Bosnia and Herzegovina and its approach to climate change?
– Back in 2005, the European Union introduced the Emissions Trading System (ETS) defined by the EU Directive on the Carbon Dioxide Emissions Trading System as a mechanism for reducing greenhouse gas emissions. At the same time, the total level for greenhouse gas emissions in the country is determined, and within that measure, emissions trading is enabled through emission permits. It represents a framework that enables the trading of carbon emissions within the EU. For Bosnia and Herzegovina, which shares the fate of this part of Europe without an established trading system, the establishment of the EU ETS could be crucial for integration into European energy and climate policies and avoiding the negative effects of applying the CBAM mechanism. In order to equalize the market conditions for all companies and avoid moving energy-intensive industry outside the Union, the EU is introducing the CBAM (Cross Border Adjustment Mechanism), i.e. carbon fee for products imported into the EU from countries that do not have a carbon dioxide emission fee payment system in place. Through the National Energy and Climate Plan (NECP), BiH planned the introduction of the EU ETS until 2026, and we are the only country in the region that planned this in the NECP. The funds collected through the EU ETS would be focused on transition projects, renewable energy sources, energy efficiency and thus the funds would be kept in our country and through project financing could help companies maintain their positions in global supply chains. This would not only encourage the reduction of emissions, but also open the door for investments in renewable energy sources and sustainable technologies.
What danger does CBAM bring to countries struggling with carbon emissions, including BiH?
– CBAM is in fact a subset of the EU ETS system, which is designed to create a balance between competitiveness and climate goals, and at the same time protect European producers from competition outside the EU from regions that have not burdened their producers with these fees. For Bosnia and Herzegovina, and for its export-oriented processing industry, this is a big challenge due to the use of energy that primarily comes from thermal plants, but it is also a chance to redirect investments and modernize industries, invest in renewable energy sources and energy efficiency in production facilities, thus strengthening its competitiveness in the market. If properly answered by the BiH authorities, CBAM can encourage our producers to reduce emissions, which would lead to sustainable development in the long term and enable new investments in RES. The panel discussion within the Sarajevo Energy and Climate Week is an opportunity to see the thinking of the EU and regional actors on how to deal with CBAM, given that none of the countries in the region will probably be able to avoid it. BiH, as a net exporter of electricity, will be particularly affected through CBAM, so this is an opportunity to send a message to decision makers about the importance of solving this problem in BiH and the countries of the region that are in a similar position as BiH.
At SECW, there is a panel related to the electricity market. What is needed to establish an organized electricity market in Bosnia and Herzegovina?
– In the EU, the electricity market is based on established competition in the production and supply segment and in free access to electricity networks. The establishment of such an organized electricity market is defined by clear regulations and the obligations of Bosnia and Herzegovina from the Agreement on the Establishment of the Energy Community define the harmonization of our legislation with the III energy package. The obligation is to ensure complete transparency, and political will is also necessary in order to finally adopt the Law at the state level, which would enable the establishment of an organized electricity market in Bosnia and Herzegovina, and thus the establishment of an electricity exchange. Such a regulated system would be a favorable framework that will attract investors and enable competition. Also, a clear separation of electricity production, distribution and trade is crucial for the efficiency of the electricity market.
How do you comment on the fact that Bosnia and Herzegovina is the only country in Europe that does not yet have an electricity exchange?
– First of all, I want to point out that realistically, considering the number and size of already existing production capacities, Bosnia and Herzegovina is the only one in our region that has the prerequisites and the need for the existence of an electricity exchange, and the situation is the opposite – the only one in the region that does not have an exchange. This is worrying and is a clear example of the politicization of something that should be an energy and, we can say, security issue. This is a big challenge for our energy policy. The electricity exchange is not only of an economic nature; it is also a symbol of progress towards integration into the European energy system. The establishment of the stock exchange would enable a better allocation of resources, encourage competition and increase investor confidence. The condition is the adoption of laws at the state level in order to establish an electricity exchange. The same would, after submitting the request, become a market operator and enable the connection of the BiH electricity market with neighboring markets. This is also one of the conditions for the exemption from payment of the tax on CBAM for electricity until 2030.
What are the key steps that BiH should take in order to successfully integrate into the European energy system?
– Fulfillment of all the obligations assumed through the Treaty on the Establishment of the Energy Community, the Paris Agreement and the Sofia Declaration, then the improvement of regulations and legislation in order to create an energy and climate framework for the implementation of the assumed obligations in order to enable the establishment of the electricity exchange, which is very important , both due to the transparency of the process and the increase in the volume of trade from renewable energy sources. In parallel, work on strengthening infrastructure capacities and actively participate in regional and European initiatives, which is essential for our integration into wider energy networks.
Energy portal
Source: energetskiportal.rs
