Serbia is introducing a new financial obligation for domestic polluters: a tax of four euros per tonne of emitted carbon dioxide (CO2) and equivalent gases.
This measure, defined in the Draft Law on the Tax on Greenhouse Gas Emissions, forms part of Serbia’s response to the European Union’s Carbon Border Adjustment Mechanism (CBAM).
The aim of introducing this domestic tax is twofold: to encourage local companies to reduce pollution and, crucially, to allow them to deduct that amount from the CBAM levy when exporting to the EU. In this way, funds that would otherwise entirely flow into the EU budget remain in Serbia.
At the same time, another law concerning the tax on the import of carbon-intensive products is under public discussion. Its purpose is to protect Serbian producers from cheaper competition from countries that do not impose similar levies.
Who is subject to the tax?
The emissions tax will not apply to all businesses, but only to legal entities and entrepreneurs who, as plant operators, are required to hold a permit for emitting greenhouse gases (GHG).
The law specifically targets the five most energy- and emission-intensive sectors:
* Production of artificial fertilisers and nitrogen compounds
* Cement production
* Production of iron, steel, and ferroalloys
* Aluminium production
* Electricity generation
These activities are estimated to account for over 57 percent of total GHG emissions in Serbia, making them a priority for the introduction of pollution-reduction measures.
How is the tax calculated and what are the incentives?
Although the tax rate is fixed at four euros per tonne of CO2 equivalent, the taxable base does not include total emissions. From the total amount of emitted gases, a so-called “reference emission” is deducted, representing the technologically unavoidable level of pollution. This means that only the “excess” pollution above the prescribed standard is taxed – something the legislator considers a direct incentive for investment in efficiency and modernisation.
According to the law’s impact analysis, a typical large industrial emitter (such as a cement plant or power station) with annual emissions of around 250,000 tonnes of CO2 equivalent could face an annual tax expense of one million euros.
To ease the financial burden and stimulate a “green transition,” the law also provides for tax incentives. The most significant one is aimed at entities in the power generation sector, allowing them to claim a tax credit equal to 20 percent of the value of investments made in prescribed emission-reduction measures. However, this credit is capped at 80 percent of the total tax liability.
Both laws are currently under public consultation and are scheduled to take effect on 1 January 2026, coinciding with the implementation of the CBAM mechanism in the EU.
(Biznis i Finansije, 03.10.2025)
https://bif.rs/2025/10/uvodi-se-porez-u-srbiji-od-cetiri-evra-po-toni-emitovanog-ugljen-dioksida/