Bosnia and Herzegovina (BH) is a country in transition but is determined to pursue accession to the European Union (EU). One requirement for joining the EU is compliance with the EU environmental acquis, although BH is currently lacking adequate experience and the required research. Therefore, it is advisable to quantify the costs and benefits of meeting the EU environmental acquis to the fullest possible extent, even though comparing costs and benefits may not be the only relevant criterion for decision making. Because the EU's ExternE methodology for estimating the external costs of air quality has been used in numerous studies aimed at formulating environmental, transport and energy policies, BH has consulted this methodology to help make decisions about restricting emissions from major combustion sources. Therefore, with the help of the EcoSenseWeb software, which fully complies with the ExternE methodology, this study was developed to examine the current situation resulting from electricity generation at a fossil fuel power plant and the units that are to be built in BH and to review the SO2 emission limit for new thermal plants in BH. (C) 2011 Elsevier Ltd. All rights reserved.