Serbia is set to introduce two key laws supporting its green transition, as draft legislation on a greenhouse gas emissions tax and a carbon-intensive imports tax is open for public consultation until October 21. The goal of these laws is to reduce pollution and improve energy efficiency while imposing a new levy on industry that could protect local companies from higher EU charges. The laws are expected to be adopted and come into force on January 1 next year, requiring all companies producing electricity, cement, iron, steel, aluminum, and synthetic fertilizer to pay environmental taxes. Importers of “dirty” products will also be subject to the tax.
Experts note that while the taxes are an additional cost for businesses, they could help Serbian companies avoid the EU’s Carbon Border Adjustment Mechanism (CBAM), which imposes much higher fees that local firms could not easily afford.
The National Association for Local Economic Development (NALED) estimates that the new domestic tax will cost Serbian companies around €100 million, whereas CBAM fees in the EU are significantly higher. CBAM is part of the EU’s efforts to reduce carbon dioxide emissions and prevent “carbon leakage,” where companies relocate production to countries with less strict environmental regulations. By paying the national tax, Serbian companies would be exempt from CBAM charges. The EU currently charges €65 per ton of CO2 under CBAM, while Serbia’s national tax will initially be €4 per ton.
Energy expert Željko Marković explained that the EU proposed two options for Serbia: adopt the CBAM system directly, which would be unaffordable for domestic companies, or implement a national CO2 tax at a level suitable for the local economy. Serbia opted for the latter. Companies investing in green projects, such as wind or solar plants, can receive tax credits of up to 80% of their obligations. However, tax credits do not apply to cement, steel, aluminum, or fertilizer producers. Over the next decade, these taxes are expected to gradually rise to EU levels.
Dragoljub Rajić, coordinator of the Business Support Network, highlighted that in the EU, funds collected from such taxes are typically placed in dedicated green transition funds, allowing companies to finance cleaner production. In Serbia, while the new taxes will not be directed into a specific fund, EU financial support for decarbonization remains available.
The Ministry of Finance emphasized that the laws aim to encourage investment in renewable energy, green construction, and industrial decarbonization, improve air quality, reduce health risks, ensure fair competition between domestic producers and importers, and align Serbia with EU climate policies and markets. Importers will pay taxes based on embedded emissions in imported products but can claim credits for emissions already taxed in the country of origin. This obligation applies to importers of more than five tons of relevant products.
According to the Ministry, keeping the funds within Serbia ensures they support cleaner environments, healthier living, investment in green projects and energy efficiency, increased competitiveness of Serbian industry in the EU market, and protection of domestic producers from unfair foreign competition.
