Kostolac B power plant (B1, B2), Serbia
The Kostolac B power plant, consisting of 2 units of 350 MW each, first entered into operation in 1987. In 2020, the plant delivered 4,571 GWh of electricity to the grid, nearly 18 per cent of the country’s coal-based generation. Kostolac B also released 95,097 tonnes of SO2 in 2020, which was enough to breach the national – not plant level – 2020 ceiling for this pollutant by 1.74 times.

Stay informed
We closely follow international public finance and bring critical updates from the ground.
Background
Serbia’s energy utility EPS secured financing for a complete overhaul of Kostolac B1 and B2 in December 2011. A USD 293 million loan was taken by the Government of Serbia on behalf of EPS from China Exim Bank to equip the two units with flue gas desulphurisation (de-SOx) technology and bring the plant’s SO2 emissions in line with the Large Combustion Plant Directive. This should have been done by the time the Directive entered into force in January 2018. The company contracted for the works was the China Machinery and Engineering Corporation (CMEC), the same company which is set to build a new unit at Kostolac B.
The works were finalised in July 2017, according to the Government. However, EPS’ 2018 Environmental Report shows that the application for a construction permit for the de-SOx installation was submitted only in November 2018 – more than a year after the opening ceremony for the facility. The permit was actually rejected twice – once in December 2018 and once in January 2019 – although the grounds on which rejections were issued by the Serbian authority are unknown.
The only explanation we have received so far from EPS and the Serbian Ministry of Energy and Mining is that the gypsum landfill is not ready for the de-SOx to start operation. A member of Serbia’s Parliament publicly asked about the situation with the permit due to increasing levels of air pollution in the country at the time, prompting the power plant’s operator EPS to put the de-SOx into operation in October 2020. But according to EPS’ 2020 Environmental Report, the permit request for gypsum storage at the Kostolac landfill was denied on 16.12.2020, so the problem seems to be far from solved.
In April 2021, the Ministry of Mining and Energy announced that in fact the facility has been operating in testing mode since October 2020. Without access to monthly continuous monitoring data on emissions, it is difficult to verify this information. Even if only in the testing phase, a decrease in emissions should have already been recorded from October onwards, but the fact that annual emissions in 2020 were much higher than those in the previous year casts doubt on the Ministry’s triumphant statement.
In December 2019, EPS launched a public consultation for an ‘updated’ Environmental Impact Assessment (EIA) report for the desulphurisation unit at Kostolac B, and public consultations were held in January 2020. The decision approving this new EIA for the already built de-SOx facility was made in August 2020.
The fact that SO2 emissions increased in 2020 compared to those in 2019 reinforces doubts about this investment: what is wrong, and why is it taking so long to fix? More than four years after it was declared finalised, the public has received almost no information about the equipment’s lack of functionality. Such information should not be withheld from the public, who ultimately pays the costs – both financial and health-related.
Latest news
Загадувањето со јаглен е смртоносно, Еко – свест ја потсетува Владата
Bankwatch in the media | 21 June, 2022Во контекст на енергетската криза со гасот и електричната енергија и најавите за поголемо користење на јагленот во индустријата како …
Read moreWestern Balkan coal pollution still massive, illegal and deadly – new report
Press release | 21 June, 2022In 2021, Western Balkan coal plants flagrantly breached air pollution legislation under the Energy Community Treaty for the fourth year in a row, emitting five times as much sulphur dioxide and 1.8 times as much dust as allowed, according to a report released today by CEE Bankwatch Network.
Read moreTermoelektrane na ugalj na zapadnom Balkanu emituju pet puta više sumpor-dioksida od dozvoljenog
Bankwatch in the media | 21 June, 2022Foto BazannU 2021. godini, termoelektrane na ugalj na zapadnom Balkanu su ponovo prekršile legislativu o zagađenju vazduha četvrtu godinu …
Read moreRelated publications
Air pollution and associated health impacts in Novaci, North Macedonia
Report | 6 April, 2022 | Download PDFFor the last forty years, the municipality of Novaci has been home to North Macedonia’s REK Bitola complex, which consists of a 675 MW lignite power plant, open-cast mines and ash disposal sites. Its inhabitants have been breathing pollution emitted at
Implementation of the Air Quality Directive by Western Balkan countries – 2022 update
Briefing | 14 February, 2022 | Download PDFThis briefing reviews the progress of five Western Balkan countries (Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia) on the transposition and implementation of the EU’s Air Quality Directive
A Just Transition Fund for the Western Balkan countries
Report | 11 January, 2022 | Download PDFThe EU’s Just Transition Mechanism will mobilise more than EUR 100 billion in investments over the period from 2021 to 2027 to help countries shift their energy sources from fossil fuels to more sustainable ones. Part of this Mechanism is the Just Tran