The moderator of the panel titled “Decarbonization of Industry and Business as a Response to the Green Agenda and CO2 Taxation” at the Belgrade Energy Forum 2024, held on May 13, 2024, at the Crowne Plaza Hotel Belgrade, was Ankica Barbulov, director of Negawatt Solutions.

The panel included participants such as Dimitrije Knjeginjić, General Director of Lafarge Serbia; Branko Zečević, President of Metalfer Group; Mirjana Jukić, Head of Procurement and Export at Messer Tehnogas; and Matthias Predojević, Vice President for Corporate Development at Elixir Group.

Key topics discussed during the panel included what needs to be done now to achieve a CO2-neutral future on time, which technologies are identified as the most effective for reducing CO2 and other harmful gas emissions, and how the Serbian economy will embrace these changes.

To reduce CO2 and other harmful gas emissions, the European Union began implementing its Emissions Trading System (EU ETS) in 2003 as part of its climate policy. This system covers a range of industries and energy production facilities. The Paris Agreement and the European Green Deal (EU Green Deal) have set a clear goal: the EU must be carbon-neutral (GHG = 0) by 2050. A direct consequence of this was the introduction of the Carbon Border Adjustment Mechanism (CBAM).

CBAM is a mechanism aimed at addressing the issue of carbon leakage while maintaining the competitiveness of the European economy by ensuring price parity for CO2 emissions for both EU-made and imported products.

For the Republic of Serbia, CBAM means aligning its climate policies with those of the EU, finalizing the regulatory framework so that the Climate Change Law from 2021 can be fully implemented, and potentially establishing its own system for charging greenhouse gas emissions.

CBAM covers products from industries such as iron and steel, cement, aluminum, hydrogen, fertilizers, and electricity. Its scope will expand in the coming years to include all products covered by the EU ETS, given the close link between these two mechanisms.

For businesses, especially in the six industrial sectors—steel, cement, fertilizers, hydrogen, and electricity—which will first be affected by this mechanism starting January 1, 2026, this is a final call to adopt decarbonization technologies to reduce GHG emissions and maintain competitiveness. However, stating that the solution to CBAM lies in the adoption of “decarbonization technologies,” particularly carbon capture technology, is not entirely accurate. Carbon capture should be the last resort, as it only addresses emissions after they have occurred. There are several other measures that can be applied first to prevent or avoid emissions throughout the product lifecycle.

Panel participants agreed and jointly concluded that the industry is ready to make its capacities, people, and knowledge available to the government, to participate in its working groups, with the aim of adopting a special law for industries affected by CBAM, fully regulating the waste management system in line with the principles of the circular economy, decarbonizing the state-owned power utility (EPS), and introducing identical rules to those within EU countries regarding CO2 emissions. This would practically involve establishing a national CO2 tax system (which would have the positive effect of prohibiting the import of goods with a higher carbon footprint than similar products produced in Serbia, without charging a carbon tax).

Creating such a comprehensive national regulatory system that will provide energy-intensive industries with the mechanisms and tools to respond to CBAM (reducing their GHG emissions) will be one of the greatest challenges for decision-makers in Serbia.