Coal Mine Methane Financing For Bosnia's Green Transition

This high dependence on fossil fuels contributes significantly to CO2 emissions, making decarbonisation of the sector a critical step towards reducing emissions and meeting international climate goals. BiH has approximately 20,000 workers directly involved in the operation of coal mines and thermal power plants, making the energy transition not only an environmental but also an important social issue for the country.

Despite the centrality of the industry to the country, BiH has committed to reaching net-zero emissions by 2050. According to the latest National Communication on Climate Change, BiH's annual GHG emissions for 2015 totalled 26.88 million tCO2e. The energy sector is the largest contributor at 80%, followed by the industrial sector (9%), agricultural sector (6%), and waste (5%).

As a signatory to the Global Methane Pledge BiH is taking steps to reduce methane emissions towards the collective goal of a 30% reduction on 2020 levels by 2030.  Reducing methane emissions from fossil fuels is one of the most cost-effective means to abate emissions; the CCAC-supported Country Methane Profile for BiH showed a sectoral abatement potential of  62% by 2030.

However, even though proven technologies exist to capture and use, or at a minimum, destroy the gas, financing for coal mine methane (CMM) emissions reductions projects is not always prioritised and coal mines are more difficult to implement measures in compared to oil and gas extraction infrastructure.

Since joining the CCAC in 2023, BiH has received support to develop a sectoral roadmap for financing coal mine methane reduction plans and increase its national capacity to monitor, assess, and mitigate methane emissions from the coal mining sector.

CCAC partner Clean Air Task Force (CATF) has been working to produce coal mine surveys with the BiH government and United Nations Development Programme (UNDP) to update mine-specific, CMM project concept documents. Surveys look at the amount of ventilation, the content of the methane, and the coal production lifespan of a mine.

“Bosnia and Herzegovina has significant potential to reduce methane emissions from its energy sector, specifically from coal mining activities. These updated coal mine methane project concept documents not only demonstrate the need to reduce methane emissions, but also that projects at both active and closed mines in the country are feasible,” said Felicia Ruiz, Director of International Methane Partnerships and Outreach at Clean Air Task Force.

BiH’s net-zero emissions goals entail a major energy transition for the country. However, its reliance on coal power means initial measures must target the lowest hanging fruit such as mitigating CMM, encouraging the use of energy-efficient technologies and practices, and focusing on expanding forested areas that can act as carbon sinks and thus mitigate methane emissions.

The transition is paralleled by new European Union regulations (to be introduced in 2025) that will require active underground mines and abandoned mines to update and continuously monitor, verify, and report their emissions.

At the request of the Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina, the World Bank became involved and is supporting  BiH’s energy transition process, which involves finding wholistic social and economic solutions to support environmental and climate goals. 

“As in other coal mining countries, the energy transition in BiH must be carefully planned and executed to ensure fairness for all involved parties. Given the large number of workers directly dependent on jobs in coal mines and thermal power plants, the transition must be gradual to allow for proper adaptation by both workers and the local communities that rely on these industries. This also involves creating new, sustainable jobs in the renewable energy sector but also providing support for workers in terms of retraining and social protection,” said Tamara Bajkuša Spahić, representative of Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina.

The process of evaluating BiH’s coal mine methane mitigation and financing options has been overseen by the Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina. The Ministry has worked on coordinated data collection with the national utility company Elektroprivreda Bosne i Hercegovine, who has jurisdiction and exploitation rights over the mines. The Ministry expects that BiH’s energy transition process will cost eight to nine billion dollars for the period to 2030 only.

Financing for CMM mitigation faces unique challenges. As international financing bodies implement higher sustainability requirements for energy projects, they are also hesitant to fund any projects which may further the lifespan of coal mines. In BiH, the national dependency on coal means this calculation is not helpful, as the mines will be in operation for some time and should be equipped with methane mitigation mechanisms as soon as possible. “Implementation of these projects is necessary to reduce near-term methane emissions from the coal sector,” said Ruiz.

CCAC support for the development of the sectoral roadmap for financing for BiH will be critical for strengthening the case for methane mitigation funding and for identifying the best possible mechanisms, including enabling access to World Bank funding.

The roadmap will also form the basis for conducting further studies into cost-benefit analyses which assess the co-benefits to be gained from reducing air pollution derived from methane emissions and subsequent tropospheric ozone. In many countries, creating cleaner air equates to savings of billions of dollars in health and agricultural benefits.