BiH exporters in trouble: Challenges in CBAM implementation, long-term access to the EU market at risk

This meeting, organized by the American Chamber of Commerce in BiH (AmCham BiH), aimed to analyze the current status of CBAM implementation in BiH, assess its economic impact, and identify possible solutions to mitigate the negative effects of this levy.

CBAM is a European Union mechanism designed to prevent “carbon leakage” by discouraging companies from relocating production to countries with less stringent environmental standards. As of January 1, 2026, it will become mandatory for EU importers of cement, iron, steel, aluminum, fertilizers, electricity, and hydrogen from outside the EU, requiring them to purchase CBAM certificates to cover CO₂ emissions. CBAM operates in parallel with the EU Emissions Trading System (ETS), ensuring that imported goods adhere to the same environmental standards. Although the responsibility formally lies with EU importers, the cost is expected to be transferred to BiH exporters, reducing their competitiveness in the EU market.

BiH faces challenges in implementing CBAM due to its high reliance on fossil fuels in its energy mix. A particular issue is that products from sectors initially covered by CBAM in 2023 accounted for around 15% of BiH’s total exports to the EU.

Since BiH has not yet introduced an Emissions Trading System (ETS) or alternative mechanisms for reducing CO₂ emissions, local businesses will not be able to offset any carbon taxes paid in BiH when calculating CBAM obligations. This increases the cost of importing BiH products into the EU, reduces their competitiveness, and threatens long-term access to the EU market.

Key Takeaways from the Roundtable:

• As of January 1, 2026, BiH exporters will have to pay CBAM taxes on products such as iron, steel, aluminum, cement, and electricity.
• EU importers of BiH products covered by CBAM will have to purchase CBAM certificates from January 1, 2026, since BiH lacks a national emissions accounting model.
• Bosnia and Herzegovina has opted to implement the EU ETS system, but its introduction will not be feasible before 2026 and is only planned by 2030. Progress has been delayed due to the BiH Council of Ministers’ failure to adopt the Roadmap for establishing the MRV (Monitoring, Reporting, and Verification) and ETS models, despite the deadline being the end of 2024.
• Until then, BiH exporters in CBAM-covered sectors will remain exposed to this levy, which will be charged upon import into the EU.
• Funds collected through CBAM will remain in the EU budget instead of being reinvested in the decarbonization and modernization of BiH’s economy.

It is crucial to provide urgent financial and regulatory support measures for BiH exporters to mitigate the negative effects of CBAM. These measures should include subsidies for emissions reduction, investments in decarbonization, and incentives for adapting production processes to ensure BiH companies remain competitive in the EU market. So far, most reforms have only increased business costs, making it essential to rapidly develop support mechanisms to help businesses transition toward sustainable operations.

BiH’s energy policy should enable industries to access more competitive and cleaner electricity to reduce their carbon footprint and exposure to CBAM. Key steps include increasing renewable energy production, improving energy efficiency, and regulating electricity trade between businesses. Currently, companies that have invested in renewable energy cannot sell excess electricity, limiting market flexibility. Facilitating the purchase and sale of green energy would lower business costs and enhance BiH’s economic resilience against EU climate regulations.

Given the complexity of CBAM adaptation and the high, non-recoverable costs, all roundtable participants agreed on the urgent need for a public dialogue between authorities and BiH exporters, streamlining procedures, and securing access to financial mechanisms to maintain their competitiveness.

The roundtable brought together representatives from key institutions, including the EU Delegation to BiH, the Directorate for European Integration, the BiH Ministry of Foreign Trade and Economic Relations, both entity ministries of energy and mining, the Ministry of Spatial Planning, Construction, and Ecology of Republika Srpska, the Federation of BiH Employers’ Association, the Foreign Trade Chamber of BiH, the Federation of BiH Chamber of Commerce, as well as representatives from the private and financial sectors. The goal was to analyze the impact of CBAM and ETS on BiH’s economy and identify possible courses of action.

AmCham BiH will continue supporting BiH businesses in navigating new regulatory challenges and will encourage relevant government institutions to ensure that the voices of manufacturing firms and exporters are included in national decision-making processes.