After the recent war (1992-1995) the country BH includes the two entities, the Federation of Bosnia and Herzegovina (FBiH) and the Republic Srpska (RS). Given these two entities the country is politically divided. The country is in transition and determined on accession to the European Union (EU). Coal-fired plants exist in both entities, two in FBiH and two in RS. Significant investment is needed to ensure that existing coal-fired units comply with EU Directive on large combustion plant by 2017. BH (like some EU countries) has chance to negotiate the position of country with the EU with possible outcome to receive delay in fulfilling requirements for some coal-fired plants or even some exceptions. Also, there is a lack of reliable and harmonised energy data in BH-over all data collection on air pollutant emissions is not yet established. So, some data collection is done for the needs of this paper and by using the specific external cost, annual emissions of pollutants and cost-benefit analyses the most acceptable scenarios for investments in desulphurisation and denitrification on the existing coal-fired units in BH on the economic and environmental base, not political, is presented in the paper. (C) 2012 Elsevier Ltd. All rights reserved.