The European Parliament wants the EU to use the proceeds from the upcoming CO2 border tax to support the least developed countries in climate mitigation, European lawmaker Petros Kokkalis said at a panel discussion in Brussels. Many member states are prioritizing energy security over decarbonization and reviving retired coal power plants, he noted and stressed that he opposes penalizing the Western Balkans for coal-fired electricity as long as the EU is doing the same.
Within the LIFE ETX project, a panel discussion was held in the European Parliament with the title ‘Can EU policy drive the decarbonisation in the Western Balkans? – EU ETS and CBAM impacts in the Western Balkan countries’. Emissions Trading Extra or ETX promotes broader and robust civil society participation in policymaking and monitoring, as well as greater international collaboration to ensure that the ETS benefits the climate and the people.
CBAM – Carbon Border Adjustment Mechanism, essentially a carbon tax for imported commodities and electricity, is scheduled to be introduced on January 1. A three-year adaptation period without charging the CO2 levy would be followed by a gradual increase until 2030.
Countries that export electricity and selected commodities to the European Union can avoid paying the CO2 border tax by rolling out their own carbon pricing schemes
Countries that export power and the targeted materials to the European Union have the opportunity to avoid it by rolling out their own carbon pricing schemes, and they would use the proceeds for decarbonization. Such systems need to mirror the EU’s Emissions Trading System (ETS). Energy Community contracting parties, which include the Western Balkans, have strict conditions to meet to be exempted from CBAM for electricity until 2030.
EU member countries are prioritizing energy security over decarbonization
Member of European Parliament Petros Kokkalis (pictured third left), the event’s host, explained that CBAM is envisaged to contribute to a cyclical transformation in the EU to an economy where the producer is responsible for the product’s entire lifetime. He noted that thousands of products need to be tested so that the tax accurately reflects their carbon content.
Thousands of products need to be tested so that the CBAM price accurately reflects their carbon content
The European Parliament wants the EU to use the CBAM revenue to support the least developed countries in climate mitigation, Kokkalis noted. He also pointed to the fact that numerous member states have been returning retired coal power plants into service after the start of Russia’s invasion of Ukraine, to make up for Russian fossil fuels. They are prioritizing energy security over decarbonization, the MEP said.
“We cannot produce coal-fired electricity and penalize its production in the Balkans. We cannot export dirty low-margin production and penalize its import. We cannot tax CO2 emissions and allow tax evasion,” Kokkalis stressed and called for joint efforts with the Western Balkans to get climate action back on track.
Western Balkans would collect EUR 2.8 billion per year if they introduce carbon pricing
With CBAM, the EU would collect EUR 537 million per year from the four Western Balkan countries that export electricity directly to the European Union, Bankwatch wrote in a new report. The calculation is based on CO2 emission costs of just EUR 50 per ton.
If the countries of the region introduce their own carbon pricing schemes, they would collect an estimated EUR 2.8 billion per year, said Ioana Ciuta (second left) from Bankwatch.
Degraded land is key to economic development of coal-dependent areas
Two representatives of local authorities from Bosnia and Herzegovina participated in the discussion. Živinice Mayor Samir Kamenjaković (second right) said his city and the Tuzla Canton are both ready for the necessary transformation. It requires aligning strategic documents with the Sofia Declaration, Paris Agreement, Energy Community rules and other international obligations, he asserted.
Živinice hosts a coal mine. The city is located near the Tuzla thermal power plant. Kamenjaković said degraded land is the key to local economic development and that a sanitary landfill has already been built on one such site.
The local authority has the ambition to use the waste as biomass for energy production, the mayor underscored. He added that the degraded land should be used for solar power plants and green hydrogen production. Moreover, Kamenjaković recently proposed to allow citizens and firms to install rooftop photovoltaic systems without construction permits.
Municipality of Kakanj in BiH hit by job losses in coal mine
Head of the Municipality of Kakanj Mirnes Bajtarević (first left) told the audience that the number of workers in a coal mine on its territory has dropped to 1,300 from 5,500 in 15 years and highlighted the impact of the massive job loss. The town is near Sarajevo and also has a coal plant and cement factory.
The municipal authorities in Živinice and Kakanj want solar power plants to be built on the land left after coal exploitation
Kakanj is using the revenue it gets from the power plant to support entrepreneurship and expand the district heating system, Bajtarević said. The municipality also intends to facilitate the construction of solar power plants on degraded land and simplify the procedure for setting up small photovoltaic systems on roofs and privately-owned land, he revealed.
Both Živinice and Kakanj have geothermal waters and they are considering the possibility to use them for heating. Kamenjaković and Bajtarević said the two municipal authorities require the EU to share knowledge and assist them in finding funds and technology for the local energy transition.