The Regulation on the Conditions, Criteria and Procedure for Allocating Decarbonization Incentives entered into force on June 13, 2026. With this regulation, Serbia’s business sector has gained a regulatory mechanism established under the Law on the Tax on Greenhouse Gas Emissions.
As the business environment in Serbia rapidly aligns with EU standards, company executives are increasingly asking the same question: how can they finance the necessary technological transformation, reduce emissions and make use of government incentives on the path toward sustainable business?
The financial framework allows the maximum aid intensity for an individual project to reach up to €200 million. The basic principle is that the approved amount should cover only the minimum funding necessary for the successful implementation of the investment.
Criteria and level of support by project type
The level of financial support depends directly on the technological solution and the nature of the investment.
The highest aid thresholds are reserved for projects involving hydrogen, renewable energy sources, advanced carbon capture and storage (CCUS) solutions, as well as low-emission fuels. Lower percentages apply to other categories, with the law providing for an increase in the maximum aid intensity for small and medium-sized enterprises (SMEs).
Projects involving biofuels, biogas and hydrogen require complete and compliant documentation, including relevant certificates and proper records of origin. This is intended to demonstrate actual emissions reductions and prevent the double counting of savings.
Funding for CO₂ capture and storage projects is subject to the strict requirement of ensuring permanent geological storage or the permanent binding of carbon in materials.
Investments in fossil fuel sources are generally excluded, except for natural gas where no technical alternative exists. Such projects must have a clear phase-out plan by 2040, reduce direct emissions by at least 70% and limit capacity growth to a maximum of 15%.
Support covers renewable energy sources at the site where the activity is carried out, high-efficiency cogeneration and related infrastructure, subject to the rule that total capacity must not be increased, except in precisely defined exceptional circumstances.
Who can apply and why timing is crucial
Eligible applicants include liable entities for measures concerning their own operations, related parties where investments are aimed at reducing the emissions of the liable entity, as well as holders of new phases of previously initiated projects.
One key administrative requirement stands out: project implementation work must not begin before the official application is submitted. In addition, applicants must be operating normally; entities in liquidation or financial difficulty are excluded.
From application to implementation: how does the procedure work?
The funding procedure begins with the publication of a public call on the official website of the Ministry of Environmental Protection. After the application deadline expires, submitted projects are evaluated by an expert committee appointed by the minister.
Applications are assessed based on the expected scale of emissions reductions, the ratio between costs and expected effects, technical feasibility, the project’s readiness for implementation and the sustainability of its results. Based on the evaluation, the minister makes the final decision on the allocation of funds.
Recipients of approved funding must use the funds for their intended purposes and in accordance with the contract concluded, while the Ministry of Environmental Protection continuously monitors their use through regular reports and direct inspections of project implementation.
For companies pursuing long-term sustainability and alignment with European Union standards, the new regulations represent not only an administrative obligation but also an opportunity to strengthen competitiveness. Businesses that undertake the decarbonization process can gain a significant advantage in the European Union market.
Source: Forbes, 19.08.2026
