The Second Day of SECW Focused on the Economic Benefits of Transitioning to Renewable Energy
(Sarajevo, September 27, 2023) On the second day of the “Sarajevo Energy and Climate Week”, discussions were held on the economic aspects of the energy transition, its benefits, and the potential financial losses if Bosnia and Herzegovina does not implement a carbon dioxide emissions trading system (ETS). Emissions trading is a market-based approach to reducing carbon dioxide emissions. The concept is also known as “cap and trade” (CAT) or an emissions trading scheme (ETS). The EU and other countries have introduced emissions trading for CO2 and other greenhouse gases as a key tool to mitigate climate change.
“Our goal is to adopt the practice of using these mechanisms in BiH. The activities are supported by all stakeholders in BiH, but we still do not have an official political decision. We are aware of what we stand to lose if we do not adopt the ETS model, both in terms of financial losses and environmental consequences, which is why it is important that we adopt these provisions as soon as possible,” stated Admir Softić, Assistant Minister for Energy at the Ministry of Foreign Trade and Economic Relations of BiH. By adopting this system, our country can increase the production of decarbonized energy by about 40% in just ten years.
“We in the EU have ambitious goals for the energy transition, and we support BiH in this direction. We are here to help the countries of the Balkans move in this direction. Connecting markets is a key element for the sale of electricity and is a basic condition for trading clean energy in BiH. The EU will not make an exception for BiH, you are a middle-income country, and there is no reason why you cannot implement this,” emphasized Stefano Ellero, Head of Cooperation at the EU Delegation to BiH, adding that Bosnia and Herzegovina has great potential for producing energy from renewable sources.
The World Bank and the European Investment Bank are directly financing the EU’s green policy in the process of transitioning to renewable energy sources.
“At the end of 2022, the EU announced an energy support package of one billion euros, and so far, we have paid out around 240 million euros for energy projects in the Western Balkans. This support package is exclusively intended for renewable energy production projects, aimed at strengthening the impact of the EU’s green transition policy,” said Sandrine Fiscia from the European Investment Bank.
It was emphasized that private companies cannot be the sole bearers of the energy transition, and green policies must be recognized at all levels of government through budgets and transition plans.
“In the context of the economic investment plan, the EU’s priorities remain the same as at the beginning. BiH is currently at a crucial moment in its energy transition, and in addition to utilizing foreign investments, it is also necessary to work on planning local budgets for the implementation of green agendas in Bosnia and Herzegovina,” stated Tarik Hubana, from the EU Delegation in Bosnia and Herzegovina.
Bosnia and Herzegovina needs about 14 billion BAM for the complete energy transition by 2030. Recently, Bosnia and Herzegovina’s sovereign credit rating was raised, as public debt is still relatively low, which allows for the demand for foreign investments and credit support packages for the development of renewable energy projects.
The Sarajevo Energy and Climate Week is programmatically and financially supported by partner countries the Czech Republic and Norway, the British and Swedish Embassies in BiH, the World Energy Council, the USAID EPA Project, UNDP, GIZ, UNECE, IRENA, EBRD, the World Bank, the EU4Energy project, SEI, PIN, FIC, EPBiH, EPHZHB, Procredit Bank, NLB Bank, Cementare Lukavac and Kakanj, GGF, KFW, PRANA, GS-Tvornica Mašina Travnik, RCB Nanotechnologies, Thermoflux, Messer, Porsche Sarajevo, Mega Tel, Hitel Hills, GEIA, People in Need, as well as the Faculty of Economics, Mechanical Engineering, and Natural Sciences and Mathematics at the University of Sarajevo.
