Low-carbon development in Bosnia and Herzegovina – an opportunity for economic development

Author: Nejra Spahić, mechanical engineer, Expert Associate, Energy Projects, the Regional Education and Information Centre for Sustainable Development in South-East Europe (REIC)

Changes in the energy sector brought about by the start of market liberalization in the 1990s and the setting of the European Commission’s ambitious targets for cuts in greenhouse gas (GHG) emissions in the EU in the early 2000s made energy decarbonization imperative amid intensifying climate change.

In the electricity generation sector, this means a reduction of carbon intensity or CO2 emissions per unit of generated electricity, which requires systemic changes to the economic system. The only practical way to cut anthropogenic CO2 emissions from thermal power plants is to replace fossil fuels with renewable energy sources.

Low-carbon development – an opportunity for job creation in BiH

According to the Third National Communication of Bosnia and Herzegovina (BiH) under the United Nations Framework Convention on Climate Changes, the energy sector was the leading source of GHG emissions in the reporting period (2002-2013), accounting for 53% of the country’s overall GHG emissions.

GHG emissions per capita were relatively low in 2013 (at around 6.9 tons of CO2eq), while emissions per unit of GDP were high, leading to the conclusion that energy (dominantly from coal-fired thermal power plants) is inefficiently used in the creation of added value. Therefore, reducing the share of energy from fossil fuels should go hand in hand with improving energy efficiency, especially in the industrial sector.

In the years to come, the EU’s energy policy will increasingly shape BiH’s energy sector, especially electricity production, which represents both a threat and an opportunity for not only power utilities, but also the entire economy. Decarbonization also brings the energy system decentralization and the emergence of a large number of production facilities with relatively low capacities. The citizens of BiH can find it easier to invest in such facilities as they are less cost intensive. At the same time, BiH companies can have a major share in the production of equipment, construction works, operation, and maintenance of such facilities, whereas they cannot be objectively expected to participate significantly in the development of large facilities.

In the context of low-carbon development, biomass should be highlighted, as coupled with sustainable supply chains, it can help create sustainable local jobs in BiH. BiH is already registering noteworthy results in the area of pellet production and use. Five local companies are manufacturing sophisticated pellet boilers. According to the statistical report of the European Biomass Association (AEBIOM), the overall production of pellets in the EU28 stood at 14.1 million tonnes in 2015. According to the report, BiH is in the group of countries producing around 300,000 tonnes of pellets annually, similarly to Croatia and Serbia, while Montenegro produces about 100,000 tonnes of pellets annually. This means that BiH and neighboring countries produce a combined 1 million tonnes of pellets a year, or about 5% of the EU28’s annual pellet consumption (the EU28 consumes some 20.3 million tonnes of pellets annually), meaning that the sector has a potential for further growth, assuming a well-functioning boiler and pellet market.

Still, decarbonization in recent years has been the most intense in the district heating sector, with a noticeable trend of converting from fossil fuels to local biomass (wood chips) and new operating models including private heating plants and public-private partnerships.

Concerning other renewables, the solar water heating potential is significant for decarbonization, while approach needs to be changed and a more active role assigned to local communities for sustainable hydropower and wind energy projects in the future.

Transition to low-carbon society in Bosnia and Herzegovina

Securing low-carbon development requires a comprehensive change of the energy system and consequently energy transition (German: Energiewende), which entails 4 transition elements.

Local communities have an important role in energy transition, which is why the non-governmental organization (NGO) Regional Education and Information Centre for Sustainable Development in South-East Europe (REIC) is implementing the project Low EMision DEvelopment at Local level – LEMDEL, whose direct beneficiaries are the representatives of:

1. Local communities in BiH;
2. Small and medium-sized enterprises;
3. NGOs;
4. Development agencies; and
5. Line ministries.

The project is implemented with the financial support of the Heinrich Böll Foundation, on the territory of BiH, with the main goals being to raise awareness and building knowledge of the main aspects and significance of low-carbon development. As part of the LEMDEL project, seminars on low-emission development at the local level have been held in Banja Luka, Bijeljina, and Mostar.

The final phase of the project will include a workshop for representatives of local communities from the entire BiH, whose main result will be a Roadmap for Low-Emission Development at the Local Level in BiH, which will lay out the opinions of representatives of local communities concerning measures that need to be taken to achieve a low-emission development of local communities in BiH. The roadmap will be sent to line ministries and other decision-makers in the energy sector so that it can be taken into account when new strategic documents in the field are drafted.