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A long way to go: the Western Balkans and the green transition / Bosnia and Herzegovina / Territories / Homepage

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To ultimately accede to the European Union, the Western Balkans must align their legislation with EU law. This includes the Green Deal, which commits countries to net zero greenhouse gas emissions by 2050. However, there is still a long way to go for the Western Balkans in their progress towards the green transition.

With the exception of Kosovo, all the Western Balkans are now candidate countries for EU membership. Since the condition for becoming a member of the European Union is the implementation of EU legislation, countries must comply with the European Climate Law of 2021, which requires a 55% reduction in gas emissions greenhouse effect by 2030 compared to 1990 levels.

At first glance, the Western Balkans’ total greenhouse gas (GHG) emissions raise hopes. With the exception of Serbia, which ranks 13th in emissions among European countries, the Western Balkans’ emissions are significantly lower than those of most EU members, as the map shows.

But total emissions are only part of the problem. It is not surprising that countries that are relatively poorer, smaller or less populated than others generate fewer emissions. However, if we consider GHG emissions relative to the size of the countries’ economies – that is, the amount of emissions per million dollars of GDP – the Western Balkans turn out to be among the most major polluters in Europe. Serbia and Bosnia-Herzegovina stand out in particular as the largest emitters per GDP. For example, although the Serbian economy is similar in size to that of Lithuania, it emits more than three times as many GHGs as it does. Albania is the only exception in the region, with an emission intensity comparable to many eastern EU members.

Emissions-intensive economies

The emissions intensity of an economy depends on the types of energy sources used, energy efficiency and the economic structure of the country. A OECD report shows that the reason for the emission intensity of the Western Balkans is mainly due to low energy efficiency and their energy sources.

Low energy efficiency is particularly visible in buildings, which on average account for 40 percent of total energy consumption in the Western Balkans. They consume a lot of energy, because insulation is often insufficient and heating systems inefficient, with two thirds of households still depending on wood and coal for heating in winter. The energy intensity of Bosnia and Herzegovina and Serbia – an indicator measuring energy supply per unit of GDP – is thus up to three times higher than that of most EU countries. Another problem is the energy infrastructure, which is fragmented and obsolete, leading to significant energy losses, thereby increasing the need for even higher energy production. Lejla Hukić, project coordinator at the Bosnian NGO Forestry and Environmental Action, highlights that technical issues such as “improving transmission networks and developing energy storage” are key challenges for greening the environment. the country’s energy supply.

In addition to low energy efficiency, the region’s energy mix is ​​heavily dominated by coal. Fossil fuels account for around 70 percent of electricity production in the Western Balkans. The exception is Albania, which relies almost exclusively on hydropower, largely explaining the country’s relatively low emissions intensity. Additionally, the type of coal used in the region is lignite, a particularly polluting type with a low caloric value, meaning that more lignite needs to be burned to produce the same amount of energy as with other coals. types of coal. However, lignite is a cheap energy source that makes countries less dependent on energy imports as it is available in abundance in the region. The result is that the sixteen coal-fired power stations operating in the region are more polluting than other coal-fired power stations in Europe. In 2016 alone, 3,900 premature deaths were attributed to these sixteen plants, according to the 2019 report from CEE bank watch .

The trajectory: Green Agenda for the Western Balkans

After long lacking a concrete plan to reduce emissions, the governments of the Western Balkan countries signed the agreement Green Agenda for the Western Balkans (GAWB) in 2020, supported by the EU. The Green Agenda reflects the EU Green Deal and shares the goal of achieving carbon neutrality by 2050 and reducing emissions by at least 55% compared to 1990 levels by 2030. Compound of five pillars, the agenda requires alignment with European climate law and therefore a reduction in GHG emissions, for example by moving towards renewable energies and developing the rail system. The GAWB Action Plan concretizes the measures to be taken to achieve the objectives.

So far, NGOs criticize countries’ delay in implementing new climate legislation to align with the EU. To achieve decarbonization by 2050, the energy intensity and carbon intensity of the economy must decrease. Energy intensity in Montenegro, North Macedonia and Albania has started to show a downward trend, meaning that each unit of economic production requires less energy than before. This trend is called decoupling, implying that an increase in GDP does not lead to an equal increase in emissions. A country can decouple either by using less energy per unit of GDP – as shown in the chart below – or by producing fewer emissions by using renewable energy sources like solar instead of coal . As the graph indicates, Serbia and Bosnia-Herzegovina remain very energy intensive. Despite some progress, most European countries are still far from absolute decoupling. Much remains to be done to decarbonize economies by 2050.

Decarbonization to stay competitive

One of the policy measures planned in the GAWB Action Plan until the end of 2024 is to introduce a carbon price, which is the key idea behind the GAWB Action Plan. EU Emissions Trading System (ETS). So far, the Western Balkans are not part of the ETS, which means that their exports to the EU are cheaper than energy and goods produced in the EU under the ETS. This is why the EU will introduce a Carbon border adjustment mechanism in 2026. The principle is that products from third countries exported to the EU must be subject to an additional tax for the greenhouse gases generated during their production.

In order to quantify emissions and therefore the amount to be paid under this program, companies in the Western Balkans will be obliged to start reporting their emissions from October 2023. According to estimates for 2020, emissions from the Western Balkans are would amount to a total of 1.2 billion euros – this figure would increase even further with the rise in CO2 prices. The Western Balkans must therefore decarbonize to remain competitive with the EU. This makes the implementation of the Green Agenda all the more relevant.

“There is a lack of political will”

However, NGOs in the region have criticized the lack of action to meet the commitments made. Several NGOs signed an open letter from Climate Action Network ahead of a meeting between EU and Western Balkan leaders in 2022, which stressed that current investment proposals help “maintain the status quo on fossil fuels in the region”.

The gradual abandonment of coal poses a social and economic challenge for the Western Balkans, which are heavily dependent on fossil fuels. Therefore, stronger stakeholder engagement is necessary, says Milka Gvozdenovic, head of the environmental sector at Young Researchers of Serbia. He says the crucial phase-out of coal is lacking action. “When we look at the facts, actions and daily decisions, it is clear that political will is lacking. » Serbia and Bosnia and Herzegovina are still planning to build new coal-fired power plants. And despite Serbia adopting a climate change law in 2021, Gvozdenovic criticizes that “there is no visible change due to the law. Regulations on climate change are still lacking. Until 2023, only three regulations have been adopted, while more than fifteen are missing and without them the climate change law cannot be properly implemented. The deadline for the adoption of all statutes expired in March 2022. » According to him, one of the main obstacles to the green transition in Serbia is the lack of transparency and public participation. Although the challenges of decarbonization vary between Western Balkan countries, one report of the Friedrich-Ebert-Stiftung shows that all countries face a lack of rule of law and a lack of capacity to implement the rules.

But Lejla Hukić, from the Bosnian NGO Forestry and Environmental Action, remains optimistic. Recent legislation, for example the Framework Energy Strategy of Bosnia and Herzegovina, “reflects the common commitment to increase the use of renewable energy sources and improve energy efficiency”, says project coordinator . Hukić believes that “Western Balkan governments are generally interested in the implementation of the Green Agenda.”

However, she emphasizes that “access to financing and international collaboration” is necessary for a successful green transition. The Green Agenda comes with an investment plan that promises 9 billion euros of investment from the EU, which is expected to mobilize a total of 20 billion euros of investment in the region . An initial amount of 1.8 billion euros in subsidies has already been approved. Most approved projects focus on building roads and rail systems, followed by investments in clean energy. This includes not only solar power, but also several hydroelectric projects in the region, some of which are controversial. And even with such investments, the transition to full decarbonization will require more effort and time.

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