Energy Community opens case against BiH for refusing to close two coal plant units

The Energy Community Secretariat has initiated a dispute settlement procedure against Bosnia and Herzegovina because it has not closed two units in coal-fired power plants Tuzla and Kakanj.

The Energy Community Secretariat said it had sent an opening letter to BiH to address its breach of the Large Combustion Plants Directive (LCPD) in the case of two units in thermal power plants Tuzla 4 and Kakanj 5, which continue to operate despite the expiry of their limited lifetime derogation period (also known as opt-out mechanism).

It added that operating them after the end of the derogation period has a negative impact on citizens in BiH as air pollution is responsible for severe health and environmental damage. The same procedure was initiated in April 2021 against Montenegro. Serbia also had an opt-out mechanism granted for some of its power plants.

The Energy Community Ministerial Council has approved the introduction of opt-out schemes for ten units

By sending the opening letter, the secretariat initiated a preliminary procedure during which BiH has the opportunity to react to the allegation of non-compliance with Energy Community law within two months.

Following written declarations for ten units that they wouldn’t operate for more than 20,000 hours after January 1, 2018, the Energy Community Ministerial Council approved the introduction of opt-out schemes. The alternative was to comply with the emission limits set by the LCPD. After expiry, the plants concerned can only remain in operation if they meet the (stricter) standards of the Industrial Emissions Directive. This is, however, not the case for the 200 MW unit 4 in TPP Tuzla and the 110 MW unit 5 in TPP Kakanj.

The secretariat: BiH clearly breached obligations from the Energy Community Treaty

The Parliament of the Federation of BiH voted in March to prolong the work of Tuzla 4 and Kakanj 5 units until January 1, 2028. It adopted the proposal from the Government of FBiH. State-owned power utility Elektroprivreda BiH owns both coal plants.

At the time, the secretariat made it clear the decision was a clear breach of the obligations of BiH under the Energy Community Treaty.

Since the LCPD entered into force on January 1, 2018, the secretariat regularly publishes data on the opt-out period for all plants in the mechanism. It is done in its Annual Implementation Reports.