Bosnia and Herzegovina could lower the carbon cost applied to electricity exports to the European Union after proposals were incorporated into draft revisions of the EU Carbon Border Adjustment Mechanism (CBAM). The Ministry of Foreign Trade and Economic Relations said the changes have been forwarded to the European Parliament and the Council for consideration. The proposals are aimed at reducing the risk that electricity exporters using carbon-intensive but mixed-generation systems face charges based on default values that do not reflect renewable and lower-carbon output.
Proposed CBAM changes for calculating electricity emissions
One amendment would permit carbon content for exported electricity to be calculated using the exporting country’s actual generation mix. The approach would include hydropower, wind and solar generation within the calculation. A second proposal would simplify verification requirements and recognise electricity supplied under power purchase agreements. This includes cases where contracts are arranged through intermediaries.
The Ministry said the distinction is financially significant for Bosnia and Herzegovina. The country remains dependent on coal-fired generation, while also operating a substantial hydropower fleet. It added that a methodology relying only on conservative default factors can overstate emissions linked to specific export transactions. This could in turn weaken the commercial value of renewable electricity exports.
Retrospective application and estimated impact on export costs
The draft revisions would apply revised treatment retrospectively from 1 January. The Ministry said this could address costs incurred from the start of the definitive CBAM phase. It estimated that combining revised EU rules with a domestic methodology could reduce the annual burden on Bosnian electricity exports by as much as €13 million.
The Ministry noted that any saving would depend on evidence rather than on the national generation mix alone. Exporters would need metering records, dispatch data, contractual matching, and verifiable information showing the origin and emissions intensity of supplied electricity. It said power purchase agreements would carry greater value only where contracted generation can be traced through scheduling, nomination, settlement, and meter data.
Domestic methodology and verification requirements
The Ministry has prepared a methodology for calculating the carbon dioxide emission factor of Bosnia and Herzegovina’s electricity system. It described this as an essential step in preparing for CBAM-related reporting. At the same time, it said a national factor cannot replace plant-level and transaction-level monitoring when exporters seek preferential treatment for renewable or lower-carbon electricity.
The Ministry said the proposed changes could improve conditions for hydropower producers and suppliers able to structure credible renewable export products. It also stated that coal-based electricity would remain exposed to carbon costs. This exposure is expected to continue as EU importers strengthen due diligence on the accuracy of embedded-emissions declarations.
Next steps in EU legislative process
The legislative process is not yet complete. The draft must still pass through the European Parliament and the Council before final adoption. The Ministry said final commercial benefit will depend on detailed implementing rules and the standard of verification evidence accepted by EU authorities.