Products that Bosnia and Herzegovina exports to the European Union could become up to 20 percent more expensive starting in 2026, because the country produces most of its electricity from fossil fuels that generate large amounts of carbon dioxide (CO2), which the EU will begin taxing in early 2026.
Source: n1info.ba
The aim of the tax, known as the Carbon Border Adjustment Mechanism (CBAM), is to reduce pollution and carbon dioxide emissions and to increase the competitiveness of environmentally friendly industries.
The Director of the Economy Department of the Foreign Trade Chamber of BiH, Ognjenka Lalović, warned that the new rules will significantly affect the prices of products from Bosnia and Herzegovina, which are mainly exported to the EU.
According to the same source, price increases will range from two to six percent, and in some cases even up to 20 percent, depending on the type of product.
Lalović also warned that as of January 1, 2026, reporting and calculation of CO2 emissions will be mandatory, which will place an additional burden on industry.
Currently, CBAM payments apply to the cement, iron, steel, aluminum, fertilizer, and electricity industries.
Bosnia and Herzegovina generates the majority of its electricity by burning coal in thermal power plants. Out of 17 terawatt hours of electricity, ten come from production in thermal power plants operated by two power companies headquartered in Sarajevo and Trebinje. The power utility of the Croatian Community of Herzeg-Bosnia, based in Mostar, claims that it produces all of its energy from renewable sources, namely water and wind.