Four euros per ton of CO₂ – Serbia to introduces new pollution tax, here’s who will have to pay it

From January 1, 2026, the implementation of the new Law on Greenhouse Gas (GHG) Emissions Tax should begin in Serbia, which introduces a tax on carbon dioxide, nitrous oxide and perfluorocarbon emissions for the first time.

The aim of this law, the draft of which is currently under public debate, is to encourage industry and the energy sector to reduce emissions and switch to cleaner technologies.

According to the Draft Law, taxpayers will be legal entities and entrepreneurs who are required to have a permit for GHG emissions, and who operate in areas such as: production of artificial fertilizers and nitrogen compounds, cement production, production of pig iron, steel and ferroalloys, aluminum production and electricity generation.

The tax will be calculated at a rate of four euros per ton of emitted CO₂, or per ton of CO₂ equivalent for other gases. The calculated basis will be the difference between the total emission and the reference, which represents the amount of unavoidable emissions and depends on the type of production process.

Companies in the electricity generation sector that generate the majority of their income from this activity will be able to use a tax credit of up to 20% of the invested funds in measures that contribute to the reduction of CO₂ emissions, such as investments in more efficient technologies, the transition to renewable energy sources or the modernization of equipment. This credit cannot exceed 80% of the total tax liability.

The law also provides for additional incentives for decarbonization, which will be allocated from the budget of the Republic of Serbia for projects that contribute to the energy transition, the development of renewable sources, innovative low-carbon technologies, as well as for supporting a just transition and the protection of vulnerable households.

By-laws that will more closely regulate the implementation of this law will be adopted within 180 days from the date of its entry into force, and the implementation of the entire taxation system is expected from January 1, 2026.

I. Z.

See the text of the draft law in the PDF file:

Click for the PDF file.

Law on Greenhouse Gas Emissions Tax