IA Law Firm Bosnia regularly follows news from energy law, which directly affects the development of this sector in BiH. Germany, the leader of the European energy transition, is facing a serious problem – green hydrogen is still too expensive. The production cost is currently around 6 euros per kilogram, and projections for 2030 indicate that it could rise to as much as 10 euros. Industrial giants such as Thyssenkrupp and ArcelorMittal are already warning that, without price stabilization, they could be forced to once again rely on fossil fuels.
Although Germany plans to invest 20 billion euros and develop a capacity of 10 GW by 2030, current production is only 0.1 GW – which shows that ambition and reality are not yet aligned.
Legal and investment perspective for BiH
For Bosnia and Herzegovina, which wants to position itself as a regional hub for renewable energy sources, this news opens several important questions:
Regulatory stability as the key to attracting investors
Foreign investors follow both prices and the legal framework. BiH must offer clear and stable regulations on concessions, taxes, and subsidies in order to maintain investor interest, especially in the sector of green hydrogen and renewable energy sources.
Contractual arrangements and investment protection
Considering the volatility of energy prices and the uncertainty regarding the profitability of green hydrogen, investors will demand thoroughly defined power purchase agreements (PPAs), with clear definitions of contract duration, mechanisms for calculation and delivery, as well as protective clauses in case of market disruptions. Particularly important will be mechanisms for price adjustments – indexation to market parameters, currency movements, or regulatory changes – in order to mitigate the risk of sudden fluctuations.
In addition, energy projects increasingly require guarantees from the state or international financial institutions (e.g. EBRD, EIB), as well as instruments such as bank guarantees and escrow accounts, which ensure payment stability and investment predictability.
Legal support is crucial here: from due diligence analysis of the legal and regulatory framework, through negotiation of contractual clauses and financing structures, to investment protection through bilateral investment treaties (BITs) and international conventions, including the possibility of arbitration before ICSID. In this way, investors gain legal certainty that their projects will be protected even in the event of changes in the regulatory regime or political risks.
European law and standards
BiH, as an EU candidate, must already begin aligning its legislation with European directives on renewable energy sources and state aid. Germany’s experience shows that even the largest markets are vulnerable if the legal framework is not aligned with economic reality.
Opportunity for domestic companies
Although the price of green hydrogen is currently high, it is expected to decrease in the coming years thanks to technological progress and increased subsidies. This opens space for domestic companies to form partnerships with European companies seeking to diversify their energy sources and supply.
Germany’s experience is both a warning and an opportunity. BiH can learn that the energy transition is not only a matter of building capacity, but also of creating a reliable legal framework and a predictable investment climate. In this, lawyers play a key role – from negotiating and drafting contracts to strategic advising of clients who want to invest in energy. More about energy law in BiH can be found at: Energy Law of Bosnia and Herzegovina – Connection with the EU, Investment Protection, and Transparency and Simplicity in Obtaining Permits for Renewable Energy Projects | IA Lawfirm
