North Macedonia’s ESM to introduce carbon pricing for its power plants by end of 2021

North Macedonian state-owned power utility Elektrani na Severna Makedonija (ESM) intends to start calculating carbon price for the emissions of its power plants by the end of 2021.

The Energy Community Secretariat has invited all electricity producers in the Energy Community contracting parties to design and implement internal carbon pricing with its support, but so far only ESM accepted.

The Energy Community Secretariat has invited all power utilities in the contracting parties to design and implement internal carbon pricing

The call came after the recommendations of the secretariat’s Study on Carbon Pricing Design, which emphasized the gradual introduction of carbon pricing as the most optimal approach for the power sector. The study also points out national emission trading schemes are a better solution than entering the carbon border adjustment mechanism that the European Union is preparing.

ESM will incorporate the carbon price in all investment decisions

“North Macedonia’s state-owned electricity producer Elektrani na Severna Makedonija has expressed its intent to design and implement an internal mechanism to price carbon emissions of its plants and operators by the end of 2021 with the support of the Energy Community Secretariat,” the secretariat said on its website.

The carbon price will be incorporated in all investment decisions and its level will be based on the market price set under the EU Emission Trading Scheme (EU ETS), the announcement adds.

The invitation was sent also to the Serbia’s power utility Elektroprivreda Srbije (EPS), Bosnia and Herzegovina’s Elektroprivreda BiH (EPBiH) and Elektroprivreda Republike Srpske (ERS) and Kosovo’s* KEK.

Of note, Montenegrin power utility Elektroprivreda Crne Gore (EPCG) is already in the carbon pricing system, introduced on the state level in 2020.

Kopač: ESM will be able to identify low carbon, low-risk investment opportunities

The secretariat’s director Janez Kopač has commended ESM for being the first electricity company among the Energy Community contracting parties to commit itself to introduce internal carbon pricing.

“Voluntary bottom-up initiatives such as this one will allow us to actively accelerate the transition to a climate sustainable energy sector. By putting a price on carbon, ESM will be able to identify low carbon, low-risk investment opportunities without having to wait for mandatory legislation to kick in,” he added.

Kovačevski: Derisking our business against imminent carbon pricing legislation is our obligation

Chairman of the Board of Directors and CEO of ESM Vasko Kovačevski said derisking of the business against imminent carbon pricing legislation and gradually reducing its carbon footprint is an obligation to its shareholders, customers and employees.

“I am proud that ESM will spearhead the introduction of internal carbon pricing in the Energy Community,” he said.