Firms in BiH plan joint solar power plant to avoid paying EU carbon border tax

Firms in Konjic, a town located in the south of Bosnia and Herzegovina, have established a joint company for the production of green electricity for self-consumption to fulfill conditions to continue exporting goods to the European Union without paying the upcoming cross-border CO2 tax.

The businesspeople that established the group are aware they will require carbon-free electricity for manufacturing to remain competitive in exports as taxes for CO2 emissions will be charged, so they want to secure green energy on time. The European Union, one of the most favorite export destinations for BiH firms, will introduce a carbon border adjustment mechanism (CBAM) in 2026.

It will be applied for various countries including BiH and other Western Balkans states, so some of them are planning to introduce CO2 taxation to avoid CBAM. For instance, Serbia recently revealed such a blueprint.

Nikšić: We all know that in the near future carbon-free energy will be a condition for exports

In order to present their plans, but also to ask the support of the local authorities, the investors from Konjic that founded the firm Neretva Sol met with Mayor Osman Ćatić. According to the Municipality of Konjic, they united around a common goal to secure the future of their mostly export-oriented firms by investing in solar energy production.

During the meeting, they presented the renewable project to be implemented by Neretva Sol.

After the meeting, Orhan Nikšić, representative of the firm Zanat, one of the founders of the joint company, said everyone knows that in the near future carbon-neutral energy would be a condition for export while that penalties for CO2 would be charged.

Alikadić: For several years now, buyers have been asking what kind of energy we use

“We are aware of that and we want to ensure the future of our company’s exports and contribute to the development of renewables in the Konjic area, which is also the strategy of local authorities,” said Nikšić.

Nihad Alikadić from Niho Motors Konjic noted that the business’s clients have been asking for several years how much green energy it consumes.

The power plant should be put into trial operation by the end of the year

Six investors have joined forces and established Neretva Sol. It has already bought land and now it is in the process of obtaining permits for the solar project.

“We hope to finish the first phase and start trial operation by the end of the year, while next year will be dedicated to the second phase,” Alikadić said.

Mayor Osman Ćatić said the municipality intends to use clean energy, because it is located in an area where there is potential for hydro, wind and solar power production.

Konjic has enough potential to cover energy needs from locally available renewable sources

It is good news that after the adoption of the study on the potential of renewables and the energy needs of the City of Konjic, businesses started to get involved, Ćatić stressed.

After Konjic adopted the study, at the end of 2022, Professor Mirza Kušljugić, the chairman of RESET’s managing board, said the decision is a way to orderly start the energy transition at the local level.

The potential identified in the study indicates that Konjic could reach climate neutrality by using locally available renewable sources, he said.