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S1E07

Transposing the Clean Energy Package 2019 in Balkans with Dr. Rozeta Karova - TEB Podcast - S1E7

with Dr. Rozeta Karova· 49m

TL;DR

The Energy Community facilitates EU energy law transposition in the Western Balkans, facing challenges in carbon pricing and market integration.

Synopsis
Dr. Rozeta Karova discusses the Energy Community's role in aligning Western Balkan energy markets with EU legislation, acting as a bridge for pre-accession. She highlights the gradual liberalization of electricity markets, the challenges of transposing complex EU regulations like the Clean Energy Package, and the need to adapt to national specifics.The conversation also covers the critical impact of the Carbon Border Adjustment Mechanism (CBAM) on electricity exports, pushing countries to implement national carbon pricing. While coal phase-out commitments exist, the region faces varying speeds of decarbonization and requires significant internal capacity building and coordinated international support to accelerate its energy transition.

Key metrics

by the numbers · 7
  • 2005
    Energy Community established
  • 13 years
    Dr. Karova's tenure
  • 2019
    EU Clean Energy Package adoption
  • 2022
    EC Clean Energy Package adoption
  • 24 per ton of CO2
    Montenegro carbon price
  • 80 and 100 per ton
    EU ETS carbon price range
  • Q4 2026 Q127
    Market coupling go-live window

Topics

8 tags
Energy CommunityEU accessionLegal transpositionElectricity market liberalizationCarbon pricingCBAMCoal phase-outRenewables policy
Stats
Duration
49m
Words
8.2k
Questions
25

Timeline

10 chapters

  1. Introduction to carbon pricing in Montenegro

    Host introduces the concept of thermal power plants being liable for carbon prices, noting Montenegro's compliance while other Western Balkan countries are not yet.

  2. Dr. Karova's background and entry into energy law

    Dr. Karova shares her journey from studying law in Macedonia to specializing in European business law and becoming interested in energy law during her master's thesis on market liberalization.

  3. Energy Community Treaty signed

    Dr. Karova recounts the signing of the Energy Community Treaty, a legally binding agreement between the EU and Western Balkan countries, aiming to integrate their energy markets with the EU.

  4. Dr. Karova joins Energy Community Secretariat

    She describes joining the Energy Community Secretariat as a lawyer, where she spent 13 years helping countries align their national legislation with European rules.

  5. Energy Community's 20th anniversary

    Discussion on the Energy Community celebrating its 20th birthday, having expanded its geographical scope and legislative focus beyond energy to include climate and environmental rules.

  6. Clean Energy Package transposition delays

    Dr. Karova explains that EU legislation like the Clean Energy Package (adopted in EU in 2019) is adopted by the Energy Community with a delay (2022), and countries face a continuous challenge to transpose it as EU laws evolve.

  7. Status of Clean Energy Package deployment

    Serbia, Macedonia, and Montenegro are in various stages of adopting new energy laws to incorporate the electricity integration package, with Ukraine's draft pending.

  8. CBAM and carbon pricing challenges

    The Carbon Border Adjustment Mechanism (CBAM) is discussed as a new EU regulation that will apply to electricity exports from the region, posing challenges for countries without national carbon pricing.

  9. Renewables framework reforms

    Countries are transposing the second renewables directive (RED II) and moving from feed-in tariffs to market-based support schemes, while also working on guarantees of origin.

  10. Market coupling go-live window

    The first go-live window for market coupling of Energy Community electricity markets with the EU is set for Q4 2026/Q1 2027, which is a precondition for CBAM exemption.

Key insights

5 takeaways
  • 01

    EU Law Transposition Lag

    EU energy legislation, like the Clean Energy Package, is adopted by the Energy Community with a delay (e.g., 2019 in EU, 2022 in EC), and by the time contracting parties transpose it, the EU has already updated its laws, creating a continuous catch-up challenge.

  • 02

    CBAM Drives Carbon Pricing

    The Carbon Border Adjustment Mechanism (CBAM) compels non-EU countries to implement national carbon pricing, as nationally paid carbon prices reduce the CBAM fee on electricity exports to the EU, incentivizing decarbonization.

  • 03

    Direct Application vs. Transposition

    EU regulations apply directly in member states, saving time. However, Energy Community contracting parties must transpose them into national law, a cumbersome process that causes delays and requires redrafting to fit national legal techniques.

  • 04

    Internal Capacity Gap

    Ministries responsible for environment, ecology, and climate in Western Balkan countries often lack the internal capacity to implement complex, detailed legislation like MRVA and ETS, hindering the pace of reforms.

  • 05

    Market Coupling Delay

    Full market coupling of Energy Community electricity markets with the EU, which could exempt electricity exports from CBAM fees, is delayed, with the first go-live window set for Q4 2026/Q1 2027.

Pull quotes

5 quotes
  • It is a legally binding treaty between the European Union on the one hand. So not the member states but the EU itself and the contracting parties at that time only the Western Balkans.
    —
  • The European directives and regulations are being drafted for EU member states. So they are developed by countries with different market levels. So different development of the markets and they're being adapted to the institutional framework and to the national specifics of the contracting parties and they always come with a certain delay
    —
  • The network codes the guidelines the regulations as such they cannot be simply copy pasted as they should be because they should apply in the same manner in the member states and in these countries but the national legal techniques are requiring some reddrafting and this poses a particular challenge.
    —
  • The nationally paid carbon price will be taken into account and lower the sebum fee.
    —
  • The EU is doing is they want to align that what has not been paid in the third country to prevent carbon leakage to prevent more import of those cheaper let's say electricity they're establishing a sebum fee
    —