Serbia has introduced a new framework to support decarbonization efforts across various industries. The Decree on the Conditions, Criteria and Manner of Granting Incentives for Decarbonization, and the Deadlines and Manner of Reporting on the Use of Such Funds (the Incentives Decree), which entered into force on 13 June 2026, further regulates incentives for decarbonization envisaged by the Greenhouse Gas (GHG) Tax Law.
Who Qualifies?
The Incentives Decree regulates a mechanism for granting incentives in the form of direct non-repayable grants, financed from the state budget. To be eligible, a beneficiary must be an entity required to obtain a GHG permit, being the operator of a plant carrying out one or more of the following activities: the production of artificial fertilisers and nitrogen compounds; the production of cement; the production of raw iron, steel, and ferroalloys; the production of aluminum; or the production of electric energy.
These incentives are intended to support measures for the reduction of GHG emissions or improvements in energy efficiency of the beneficiaries’ industrial activities. The industrial activities include activities undertaken in industrial plants and which include production of energy, final products, or semi-manufactured products in industrial production.
How Much?
The maximum intensity of the incentives is expressed as a percentage of eligible costs per individual measure and is capped as follows:
- 60% of eligible costs for measures enabling the use of hydrogen or hydrogen-based fuels, provided that at least 40% of the beneficiary’s total consumption of such fuels consists of fuels produced from renewable sources or other sources with low greenhouse gas emissions;
- 45% of eligible costs for investments in energy production from renewable sources, energy storage, flexible electrification of energy consumption, and investments in carbon capture equipment and installations;
- 35% of eligible costs for measures enabling the use of low-greenhouse-gas-emission fuels, excluding natural gas;
- 20% of eligible costs for investments in the production of low-greenhouse-gas-emission fuels; and
- 30% of eligible costs for all other measures contributing to GHG emission reduction or improved energy efficiency not covered above.
In any case, the maximum incentives’ intensity for an individual measure may be granted up to EUR 200 million.
What Can the Incentives Fund?
The incentives may only be granted for investments that achieve emission reductions or energy efficiency improvements beyond the levels required by the law. A beneficiary may also apply in relation to the measures implemented by its related companies, provided that such measures are exclusively aimed at reducing that beneficiary’s emissions.
Finally, the incentives may be granted for measures intended and included in future phases of projects that were already initiated prior to the entry into force of the Incentives Decree. However, the implementation works for measures for which incentives are requested must not commence before the submission of the application for granting the incentives.
How Are the Incentives Awarded?
The procedure for awarding the incentives requires the Ministry of Environmental Protection to first publish a public call, which has not been published yet. Those interested in applying for these incentives should keep a close eye on the upcoming developments.
Conclusion
The adoption of the Incentives Decree represents a significant development in Serbia’s regulatory framework for decarbonization. By providing financial support for investments to reduce greenhouse gas emissions and improve energy efficiency, the Decree reinforces the country’s commitment to its transition toward a lower-carbon economy. We will continue to follow this process and provide additional information when it becomes available.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
