Energy Community: Prolonging operation of coal plants in BiH is breach of treaty

The Federation of BiH intends to operate two coal plants past their allowed time limits, which the Energy Community Secretariat says is a clear breach of obligations.

The Energy Community Secretariat said the decision by the Federation of Bosnia and Herzegovina to extend the operation of two units in coal-fired thermal power plants until 2028 increases environmental concerns. Of note, the international organization already opened a case last month against Bosnia and Herzegovina for failing to meet the ceilings for air pollutants that it set in its National Emission Reduction Plan.

The House of Peoples of the Parliament of the Federation of Bosnia and Herzegovina endorsed conclusions on March 24 to cancel the application of the opt-out regime of the EU’s Large Combustion Plants Directive for coal power plants Tuzla 4 and Kakanj 5. The intention is to extend their operation until 2028. In the secretariat’s opinion, such a unilateral decision is a clear breach of the obligations of Bosnia and Herzegovina under the Energy Community Treaty.

Tuzla 4, Kakanj 5 are at end of their 20,000-hour limits

The two units were approved for opt-out by the Energy Community Ministerial Council in 2016. Tuzla 4 and Kakanj 5 are at the end of their 20,000-hour limits.

Operation beyond that point has a negative impact on the interest of all citizens in Bosnia and Herzegovina as air pollution is responsible for severe health and environmental damages, including premature deaths due to respiratory diseases, and also causes extremely high costs that societies have to bear as a whole, the secretariat stressed.

Thermal power plants Tuzla and Kakanj are run by state-owned Elektroprivreda Bosne i Hercegovine (EPBiH), one of three such utilities in the country. The company has renewable energy projects in the pipeline, too.

The Federation of Bosnia and Herzegovina is one of two entities that make up BiH, the other one being the Republic of Srpska.

BiH in breach of rules also with Tuzla 7 coal plant project

As for the planned new lignite-fired power plant Tuzla 7, financed by a loan from the Chinese Export-Import Bank, the Ministerial Council decided last year that the decision of the State Aid Council was in breach of Article 18 of the Energy Community Treaty, as the guarantee was not issued on commercial terms.

The secretariat said the country is expected to notify it by July 1 on measures taken to rectify the breach of the Energy Community acquis.