Members of Energy Community to propose carbon pricing model by mid-2025

Energy Community contracting parties should propose, by the middle of the next year, a carbon pricing model they intend to introduce, their representatives agreed at the annual meeting of the Ministerial Council in Vienna. The Energy Community Secretariat expects the scheme to be adopted by the end of 2025.

The Energy Community Ministerial Council adopted the first list of Projects of Energy Community Interest and invited transmission system operators (TSOs) of Western Balkan countries to continue preparations for electricity market coupling that was initiated by the Joint Declaration on Regional Coordination.

Representatives of the European Commission have presented the Final Impact Assessment Report for the establishment of a regional emission trading system in the Energy Community contracting parties. It represents an important input for discussion in 2025 on carbon pricing for the Energy Community that would align with the enlargement perspective, according to the council’s conclusions.

The secretariat’s director Artur Lorkowski said it is a very critical issue for the Energy Community.

“Starting from the outcomes of the study presented by the European Commission on the several carbon pricing options, the ministers decided to meet again in mid-2025 to decide what option would be the best one for the Energy Community to move forward the discussion on the carbon pricing,” he stated.

The Decarbonization Map will also be updated

The secretariat expects the decision on the carbon pricing model for the Energy Community to be delivered by the end of 2025.

The topics discussed are crucial for the integration of the contracting parties’ electricity markets with the EU and the creation of a carbon pricing system for the Energy Community that could be aligned with the one in the EU, according to Lorkowski.

The Ministerial Council invited the contracting parties to analyze the results of the report and communicate to the European Commission and the secretariat the preferred carbon pricing policy scenarios well in advance of the so-called informal meeting of the Ministerial Council, scheduled for mid-2025.

The body is then expected to invite the European Commission to present a draft proposal to update the Decarbonization Roadmap, including a commitment to achieve climate neutrality by 2050, with a view to its possible adoption by the Ministerial Council in 2025, the conclusions from the Vienna gathering read.

The first Projects of Energy Community Interest list adopted

The Ministerial Council has adopted the 2024 Projects of Energy Community Interest (PECI) list. It is the first one complying with the EU’s revised Trans-European Networks for Energy regulation (TEN-E).

The list was adopted after a rigorous selection process that sets the stage for transformative energy investments to enhance infrastructure, promote regional integration, and attract further investment.

The Ministerial Council will update the PECI list every two years. There are six projects:

1. increasing the capacity of the power line Trebinje (Bosnia and Herzegovina) – Perućica (Montenegro);
2. strengthening the power interconnection between Moldova and Ukraine;
3. closing the 400 kV internal ring in Albania;
4. grid reconfiguration and new transmission line between Albania and Kosovo*;
5. section of the Trans-Balkan Electricity Corridor from Bajina Bašta (Serbia) to Višegrad (BiH) and Pljevlja (Montenegro)
6. 225 MW of energy storage in Ukraine.

The investments are estimated at EUR 445 million in total.

Cooperation on finalizing the Market Coupling Operator Integration Plan to be accelerated

The Ministerial Council welcomed as a first step the agreement made under the facilitation of ENTSO-E between all TSOs to propose the principles of regional cooperation including a proposal for an alternative configuration of capacity calculation regions (CCRs) in the Western Balkans in line with the Energy Community law.

The submission of the Market Coupling Operator Integration Plan (MCO IP) is an essential prerequisite for adherence to the single day-ahead and single intraday coupling (SDAC and SIDC), according to the council’s conclusions.

The ministers called on the nominated electricity market operators (NEMOs) of EU member states and contracting parties to accelerate cooperation on finalizing the MCO IP to enable its official submission by all EU NEMOs as soon as possible and not later than January.

The Ministerial Council stressed the importance of transposing the Electricity Integration Package (EIP) as a key step towards integrating contracting parties’ electricity markets with the EU. The ministers urged for the finalization of the overdue EIP transposition and implementation, supported by the secretariat, by the end of the first quarter.

New European Commissioner for Energy Dan Jørgensen attended the Ministerial Council’s meeting for the first time. He claimed the package is a unique opportunity for contracting parties to benefit from the EU’s internal electricity market even before accession.