Products that Bosnia and Herzegovina (BiH) exports to the European Union (EU) could increase in price by up to 20 percent starting in 2026, because the country produces the majority of its electricity from fossil fuels, which generate large amounts of carbon dioxide (CO2), on which the EU is introducing a tax from the beginning of 2026.
The goal 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.
Ognjenka Lalovic, Director of the Economy Department of the Foreign Trade Chamber of BiH, warned that the new rules will significantly affect the prices of products from BiH, which are mostly 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.
Lalovic warned that starting January 1st, 2026, it will also be mandatory to submit reports and calculate CO2 emissions, which will further burden the industry.
CBAM currently covers the cement, iron, steel, aluminum, artificial fertilizers, and electricity industries.
BiH produces the largest amount of electricity by burning coal in thermal power plants. Of the 17 terawatt-hours of electricity, ten come from production in thermal power plants in two electric utility companies based in Sarajevo and Trebinje. The Electric Utility of the Croatian Community of Herzeg-Bosnia, based in Mostar, claims that it produces all its energy from renewable sources, i.e., water and wind.
