What it is
This is about old coal-fired power plants in the Western Balkans that were supposed to reduce emissions under Energy Community rules. Bankwatch's Comply or Close report of 23 June 2026 looks at 2025: the eighth year after new limits entered force for large combustion plants.
Which limits are checked
The main indicators are sulphur dioxide SO2, dust, and nitrogen oxides NOx. Some old units are covered by national emission reduction plans, or NERPs: the state has an overall emissions ceiling for a group of plants and must either bring them into compliance or close units that no longer have the right to keep operating in the old regime.
What the 2025 report shows
According to Bankwatch, coal plants in the NERPs of Bosnia and Herzegovina, Kosovo, North Macedonia, and Serbia emitted SO2 at 6.6 times the allowed level in 2025. Regional dust pollution was 2.9 times above the limit, and NOx was 1.4 times above the limit. Bosnia and Herzegovina was the largest SO2 source with 196,940 tonnes and a 12.7-fold exceedance; Serbia was second with 177,756 tonnes and a 5.1-fold exceedance.
Serbia's position
For Serbia, the report identifies TENT B as the largest NOx source among Serbian coal plants: 11,247 tonnes in 2025. Bankwatch also says Morava and Kolubara A are operating more than two years after their closure deadline. This is not a single accident: it is regular power-system operation in which old units remain in production even though their environmental and legal status is contested.
Promises and current status
The Energy Community model promises that large coal plants will either comply with limits or be taken out of operation. The current status, according to Bankwatch: breaches continue, Western Balkan governments are not fining operators for those exceedances, and there are no clear, updated, realistic compliance or closure plans. Readers therefore need to separate modernisation claims from verifiable results on emissions and closure deadlines.
Where CBAM fits
CBAM is the EU's carbon border adjustment mechanism. Its full regime started on 1 January 2026; according to the EU and the Energy Community, it covers electricity among other goods, and EU importers must track embedded emissions and cover them through CBAM certificates. For Serbian electricity this is not a local fine for SO2 or dust, but a separate export pressure: the more carbon-intensive the generation, the greater the risk of extra costs when selling into the EU.
Why it matters
For residents this is about air quality and health, especially near energy and industrial zones. For the economy it is about the reliability of old capacity, future energy investment, and export competitiveness. For the state it is about meeting international commitments: if units are formally supposed to comply or close, but keep operating without penalties, the public does not see a clear timetable for who reduces pollution and when.
Next deadline or open decision
Since 1 January 2026, CBAM has already created administrative and financial obligations for electricity imports into the EU. The open question for Serbia is when verifiable updated plans will appear for modernising or closing old coal units, including Morava and Kolubara A, and whether regulators will enforce penalties for limit breaches.