BEF 2023: Decarbonization is essential for economic progress in Southeastern Europe

Accelerating the decarbonization of the electricity sector and energy in general is necessary for maintaining economic development, top officials from Southeastern European countries and the Energy Community Secretariat said today at the kickoff of Belgrade Energy Forum 2023. The transition to cleaner sources, particularly solar and wind power, will make the region more competitive and create jobs in the Western Balkans on the path to joining the European Union, they pointed out. Governments need to integrate electricity markets and introduce emissions trading schemes on a national and regional level to avoid the EU’s upcoming carbon border tax through the CBAM mechanism.

The two-day Belgrade Energy Forum 2023 gathered government officials and major companies in Serbia’s capital city for discussions on the energy transition in Southeastern Europe. Four hundred participants from 28 countries including the representatives of international organizations are attending the biggest energy conference in the region.

“Whichever official energy, economic and climate policies we have in place today or will have tomorrow, we must be aware that if they are not aligned with sustainable development, they are not good. This is why I’m asking you – as energy transition leaders in Southeastern Europe – when you create your strategies and short- and long-term goals, let the sustainability be the key word, along with the awareness that the world is not only the moment in which we currently live, but also the world of tomorrow, the world of our children and future generations,“ Founder and Editor of Balkan Green Energy News Branislava Jovičić told the audience.

Branislava Jovičić, Founder and Editor of Balkan Green Energy News

The event was officially opened by Energy Community Secretariat Director Artur Lorkowski, Director of Lafarge Serbia Dimitrije Knjeginjić and Minister of Mining and Energy of Serbia Dubravka Đedović.

The sectors of aluminum, fertilizer, cement, iron and steel and hydrogen are suffering a heavy burden amid the EU’s strict regulations because of their energy intensity, Knjeginjić stressed. He noted that the exporters of said goods to the EU, together with electricity, would have to start paying a CO2 tax in 2026 through the Carbon Border Adjustment Mechanism (CBAM).

In the meantime, Western Balkan countries are working on introducing their own carbon pricing schemes to avoid CBAM and keep the funds, which are intended for decarbonization.

Knjeginjić: Alternative fuels would enable the domestic cement industry to reduce its footprint

Alternative fuels would enable the domestic cement industry to reduce its footprint, Knjeginjić said. “Our company has a big set of solutions in that segment. For that we need support from the Ministry of Environmental Protection and Ministry of Mining and Energy of Serbia,” he said and explained that the industry has no access to high-calorie fuel.

Dimitrije Knjeginjić, Director of Lafarge Serbia

Serbia plans to set aside EUR 15 billion for priority investment in energy

Serbia must meet its growing industrial demand for electricity and cover the needs of households from domestic sources, Minister Dubravka Đedović said. She announced that the government would adopt a priority investment plan for the energy sector worth at least EUR 15 billion. New capacities are estimated to cost EUR 10 billion and the remainder is envisaged for the transmission and distribution of electricity, oil and gas, the minister revealed.

Đedović highlighted a plan to add solar power plants with a total capacity of 1 GW, which would balance themselves, and the Bistrica pumped storage hydropower unit. At the same time, the feasibility of the Đerdap 3 (Iron Gate 3) pumped storage project is being analyzed, she asserted.

Đedović: The goal is for Serbia to phase out coal by 2050

The goal is for Serbia to phase out coal by 2050, the minister underscored. “There is no magic wand” in the form of quick solutions instead of serious planning, she said. EU countries that are facing the same challenges are aware how costly they are, Đedović stressed and pointed to the example of Romania, saying it had to make difficult decisions practically overnight.

“Whether energy security or the energy transition is more important is not a dilemma. There is no security without a transition as a transition cannot be called successful if there is no security of supply,” Đedović stated.

She said a renewables share of 45% in electricity production is a realistic goal for 2030 and that when it comes to gross final consumption, the goal should be between 30% and 40%, depending on many factors and the energy scenario model.

“Our targets will be ambitious but realistic so that we can ensure security of supply and so that our energy transition process is financially sustainable and socially just for the mining sector and all the employees in that sector,” Đedović said.

Lorkowski: Energy Community contracting parties need to work on securing exemptions from CBAM

Energy Community contracting parties need to work on securing exemptions from CBAM or else the revenue from the CO2 border tax would be collected outside, in the EU, depriving their economies of funds for the transition, Energy Community Secretariat Director Artur Lorkowski warned. “I believe that the lack of action on a government level to maximize the availability of national revenues could backfire also in the political dimension,” he stated at the opening of Belgrade Energy Forum 2023.

Artur Lorkowski, Director of the Energy Community Secretariat

Electricity exporters can be exempted until 2030 only if the electricity markets in the region are integrated with the EU electricity market in the form of market coupling, the top diplomat explained. In addition, the contracting parties need to develop a fully functional emission trading scheme by 2030, Lorkowski added. The Energy Community Secretariat is supporting the Western Balkans in the creation a regionally organized mechanism that would provide a carbon price equivalent to the one in the EU, he told the participants of the forum.

The contracting parties need to develop a fully functional emission trading scheme by 2030

“CBAM is expected to act as a catalyst for countries in the region to take necessary steps towards green transition that, frankly speaking, should have been taken years ago,” he stated. The green transition will strengthen the region, making it more competitive in Europe, in his view.

Speaking ahead of BEF 2023, Minister of Energy and Mining of the Republic of Srpska Petar Đokić said the entity has signed contracts and awarded concessions in the electricity sector worth EUR 1.6 billion. They are envisaged to be completed within five years, he added and estimated it would cut the share of fossil fuels to 30%.

Hristov: overcoming the energy crisis calls for global solutions for energy security and the energy transition

Minister of Energy of Bulgaria Rossen Hristov said that to overcome the energy crisis, it is necessary to come up with global solutions for energy security and the energy transition. “Simultaneously we need to provide energy security, green transition and prosperity in every region of our countries including coal regions. We need to do that in a very short period of time, which means we practically have no room for a mistake,” he underscored.