EU Commission: Serbia makes limited progress on energy, climate change yet to receive adequate attention

Serbia made limited progress in the area of energy, while the policy areas of environment and climate change have yet to receive adequate attention, according to the European Commission’s latest annual assessment of the implementation of reforms in the country, adopted today.

The European Commission’s annual assessment deals with Serbia’s progress across 35 chapters of membership negotiations with the EU. Some highlights of assessment concerning Chapter 15: Energy and Chapter 27: Environment and Climate Change are as follows.

Chapter 15: Energy

Serbia should, among other matters, strengthen human resources capacity and promote investment in energy efficiency including through establishing a sustainable financing system and initiate reforms to introduce cost-reflective electricity tariffs fully taking into account investment needs, climate change commitments, and social security implications, as well as reform electricity price regulation accordingly, the European Commission said in the report.

In 2017, the non-regulated market accounted for 44.4% of total end-user electricity consumption. However, households and small customers have the right to be supplied under regulated prices. Some 3.57% of delivered electricity quantities were subject to supplier switching in 2017.

The unbundling of state power utility and distribution system operator Elektroprivreda Srbije (EPS), has been formally completed. However, concerns related to the effective implementation of functional unbundling related to independent decision-making remain.

Any further development of hydropower should be in line with EU environmental legislation

The energy agreement between Serbia and Kosovo* must be implemented without further delay, while Serbia needs to set up regionally coordinated auctions with its Western Balkan neighbors.

Functional unbundling of the electricity transmission system operator Elektromreža Srbije (EMS) needs to be completed in line with the Energy Community Treaty requirements.

Serbia needs to intensify its efforts to switch from feed-in tariffs to feed-in premium support schemes

The Renewable Energy Directive is partially transposed into Serbia’s law on energy. Adoption of the implementing legislation on bio-fuels is still pending, as well as actual use in the transport sector.

Serbia needs to intensify its efforts to switch from feed-in tariffs to feed-in premium support schemes, as well as to ensure transparent procedures for the connection of renewable energy producers to the grid in the framework of an auction-based program. Any further development of hydropower should be in line with EU environmental legislation.

Chapter 27 – environment and climate change

Serbia has achieved some level of preparation in the area of environment and climate change. Limited progress was made in further alignment with the acquis and on strategic planning, the European Commission said.

In the coming year, Serbia should in particular:

• enhance administrative and financial capacity of the public central and local administration authorities including the Environmental Protection Agency, operationalizing and adequately resourcing the Green Fund and further improving inter-institutional coordination, in particular between central and local levels;
• intensify implementation and enforcement work, such as closing non-compliant landfills, investing in waste reduction, separation and recycling, reinforcing air quality monitoring, advancing river basin management and preparing for Natura 2000;
• implement the Paris Agreement, including by adopting a comprehensive climate strategy and law, consistent with the EU 2030 framework for climate and energy policies and well integrated into all relevant sectors and develop a National Energy and Climate Plan, in line with Energy Community obligations.

The European Commission also notes that legislation on greenhouse gas emissions monitoring, reporting and verification in line with the EU emissions trading system (ETS) and Effort Sharing Regulation was finalized in 2017 but is not yet adopted.

Increasing investments in clean energy and considerable strengthening of administrative capacity is needed, together with awareness-raising activities, the EU executive noted.