Faced with forthcoming international obligations related to climate change mitigation measures, primarily planned to be reflected through the Law and Action Plan on Low Carbon Development Strategy, as well as the Law on Climate Change, all of which are currently being defined and adopted, Serbia is increasingly facing a need to switch its coal-fired facilities to alternative, environmentally more acceptable options. The related measures will have to be implemented much sooner than initially planned. Knowing that 80% of national GHG emissions originate from the energy sector, as well as that the dominant portion of those emissions results from the use of locally available coal, it is clear that the most efficient climate change mitigation measure would be a switch to alternative fuel options. However, having in mind that such an energy transition process is coupled with significant technological, environmental, economic, social, and other difficulties, the EU has initiated several projects, and one of them is TRACER, launched under the Horizon 2020 program, that strives to shed light on the best research and innovation strategies facilitating easier transition to the sustainable, low carbon energy system. The project addresses actions across nine coal-intensive European regions, including Kolubara Region in Serbia. The paper presents technological, environmental, and social challenges in the transition process, with an emphasis on the Kolubara region, and a proposal for the energy transition in Serbia respecting R&I strategies and Smart Specialization.