The Ministry of Finance conducted a public consultation from October 1 to 21 on the Draft Law on the Tax on Greenhouse Gas Emissions and the Draft Law on the Tax on the Import of Carbon-Intensive Products, which aim to establish a system for charging taxes on greenhouse gas emissions.

The EU Regulation establishing the Carbon Border Adjustment Mechanism (CBAM) entered into force in May 2023. Since October 2023, there has been an obligation to report carbon dioxide emissions, and as of January 2026, companies in the EU will be required to pay a levy on goods imported from countries that do not have an established carbon pricing system. For anyone seriously engaged in energy and climate policy, CBAM could not have come as a surprise. On the other hand, the response of the Republic of Serbia to the introduction of CBAM is coming only two months before the start of payments in the EU and represents a surprise, considering that the public was not aware that these laws were being prepared.

Serbia’s exposure to CBAM is significant, as nearly two-thirds of total exports are placed on the EU market. An additional challenge is the fact that the domestic economy has a significantly higher carbon footprint per unit of product compared to EU competitors, which directly reduces the competitiveness of Serbian products. The most pronounced difference is visible in electricity generation, where emissions in Serbia are three to four times higher than in the EU.

Given the global fight against climate change, the international obligations undertaken by the Republic of Serbia by signing the Paris Agreement, as well as the process of European integration and the goal for Europe to become a carbon-neutral continent by 2050, the establishment of a carbon pricing system is inevitable. However, due to numerous procedural and substantive shortcomings, we believe that the proposed solutions do not meet the basic requirements for implementing effective fiscal and climate policy, and we point to the following key deficiencies of the proposed laws:

1. Failure to comply with public participation procedures

Establishing a GHG emissions pricing system requires a joint response from all social actors, especially the business sector, which will be most directly affected by these measures. Unfortunately, publicly available information indicates that businesses and citizens were not involved in the early stages of drafting the laws, and the Ministry of Finance allowed only 20 days for participation in the public consultation, which is the legal minimum. Meeting only the minimum standards for public participation is insufficient, particularly given that these are entirely new instruments being introduced into the tax system of the Republic of Serbia.

The Law on State Administration obliges state authorities to ensure conditions for public participation during the preparation of draft laws, including the publication of background documents and the organization of consultations prior to the public debate. In addition, the documents published by the Ministry do not include information on the members of the working group, although the Government’s Rules of Procedure require this, meaning that the public is not informed about who participated in drafting these regulations. This approach constitutes a violation of several regulations of the Republic of Serbia, primarily the Law on the Planning System and the Aarhus Convention. The Ministry of Finance failed to timely inform the public about the commencement of work on these laws, and relevant stakeholders, including representatives of the business community and civil society, were excluded from early consultations.

2. Disregard for the existing strategic and legal framework

The explanatory memorandum published with the Public Consultation Notice states that the laws are aligned with the Development Strategy of the Republic of Serbia until 2030 and the National Climate Change Action Plan (2019–2030). However, these documents do not exist. They have never been adopted and therefore have no legal effect. The currently valid Action Plan for the Implementation of the Government Programme covers the period 2024–2027, while the explanatory memorandum refers to alignment with the Government Programme for the period 2022–2026. Serbia does not have a Development Strategy, and the Development Plan of the Republic of Serbia has never been adopted.

3. Non-earmarked use of collected revenues

The Draft Law does not provide that the revenues collected from the GHG emissions tax will be used to support businesses in decarbonization efforts. Given that in the Republic of Serbia there is no earmarking of budget revenues nor an established mechanism for financing climate action, it is particularly concerning that the Law does not clearly define how revenues from the GHG tax will be used. If adopted in its current form, the revenues collected from the tax on greenhouse gas emissions would go into the general state budget, which the Government may allocate without any legal obligation to use these funds for decarbonization projects.

What next?

The Ministry of Finance should immediately withdraw from the procedure the draft laws that are contrary to the legal order of the Republic of Serbia and strategically grounded in non-existent documents. It is irresponsible to initiate a public consultation on the introduction of a greenhouse gas emissions tax without first conducting and publishing a regulatory impact assessment, particularly with regard to the social and economic consequences for businesses and citizens of the Republic of Serbia.

The application of the laws is planned as of January 1, 2026, leaving companies directly affected by these regulations just over two months to prepare.

Organizations signing the statement:

• Belgrade Open School

• Center for Environmental Improvement

• Regulatory Institute for Renewable Energy and Environment

• Javnost na potezu

Public's Turn

In order to facilitate participation in this process for all citizens who wish to take part but feel they lack sufficient expertise or time to analyze the document, we have prepared comments that you can download and submit to the Ministry of Finance in your own name. The link to the comments is available HERE.

This activity is part of the project “Green Agenda Navigator,” supported by the European Union and implemented by Belgrade Open School in cooperation with six regional partners: Aarhus Center Association, Eko-tim, Eco-Zone, Center for Environmental Research and Information Eko-svest, Protection and Preservation of Natural Environment, and CEE Bankwatch Network.