Report looks at coal subsidies in Western Balkans

A number of Western Balkan countries have their eye on EU membership in the near future. However, according to a newly released study, some of these countries are still using public subsidies to support coal power, which isn’t in line with the EU’s efforts or regulations for decarbonisation.

EU candidate countries have put together the Energy Community, which is an international organisation that gave €2.4 billion in some types of subsidies towards coal-sourced energy in 2017. Of this funding, €1.2 billion came from Serbia, Kosovo, Bosnia, and Herzegovina.

According to the report, European countries have a legal duty to stop some types of subsidies, as they can give companies an advantage. Furthermore, the study claims that coal power plants in the Energy Community wouldn’t be able to operate without the subsidies, and if they did there would be significant losses.

Janez Kopač, director of the Energy Community Secretariat, stated: “The Energy Community Contracting Parties can no longer look away from the consequences of maintaining an unprofitable, inefficient and unsustainable coal-based energy system.”

Western Balkan countries have made agreements with the EU to regulate these subsidies going forward, as part of steps to move towards membership of the bloc.

However, without subsidies, it’s predicted that energy costs in these countries would skyrocket. For example, it’s believed prices would increase by 49% in Serbia, 31% in Bosnia, and 23% in Kosovo. And across the remaining countries, the increases would most likely be just as steep.

In a recent interview, Igor Kalaba of Climate Action Network Europe said: “The Western Balkan governments are setting themselves up for a shock once they enter the EU Emissions Trading Scheme.”

“Carbon prices have not been properly taken into consideration when planning new coal projects, increasing the chances those plants will end up as stranded assets. The widening energy policy gap will move the Contracting Parties, especially the Western Balkan countries, not closer to the EU but further away.”

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