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The Western Balkans and the green transition: a long road / Bosnia and Herzegovina / Areas / Home

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The Western Balkans and the green transition: a long road / Bosnia and Herzegovina / Areas / Home

To access the European Union, the Western Balkans must align their legislation with that of the Community, including the reduction of greenhouse gas emissions and decarbonisation. However, for countries heavily dependent on fossil fuels this is a major challenge

With the exception of Kosovo, all the countries of the Western Balkans are officially candidates to join the European Union. Since one of the key requirements is compliance with Community legislation, they must adhere to the European Climate Law of 2021, which requires a 55% reduction in greenhouse gas emissions by 2030 compared to 1990 levels.

At first glance, the total volume of greenhouse gas emissions from the Western Balkans bodes well. With the exception of Serbia, which ranks 13th among European countries in total emissions, emissions from the Western Balkans are significantly lower than those produced by most EU members.

But total emissions are only one side of the coin. Not surprisingly, countries that are poorer, smaller or less populated than others generate fewer emissions. However, when we consider greenhouse gas emissions in relation to the size of economies – in our case the amount of emissions per million dollars of GDP – the Western Balkan countries are among the biggest polluters in Europe. In particular, Serbia and Bosnia and Herzegovina produce the largest emissions in relation to GDP. Despite being similar in size to Lithuania, the Serbian economy emits three times as much greenhouse gas. Albania is the only exception, with an emissions intensity comparable to that of Eastern European EU members.

Carbon-intensive economies

The intensity of an economy’s emissions depends on the type of energy sources used, on the energy efficiency and on the economic structure of a country. A OECD report shows that the high emission intensity of the Western Balkans is mainly due to low energy efficiency and supply sources.

The low efficiency can be attributed in particular to buildings, which on average consume 40% of the total energy of the Western Balkans. Insulation is often inadequate and heating systems inefficient: two-thirds of households still rely on wood and coal to heat their homes during the winter. The energy intensity of Bosnia and Herzegovina and Serbia – an indicator that measures the amount of energy supplied in relation to GDP – is up to three times higher than that of most EU countries. Another problem is represented by fragmented and obsolete energy infrastructures, which cause large energy losses, further increasing the need for energy production. Lejla Hukić, project manager at the Bosnian NGO Forestry and Environmental Action, points out that technical issues such as “the improvement of distribution networks and the development of energy storage systems”, are key challenges for greening energy supply of the country.

In addition to low energy efficiency, coal is still used to produce around 70% of the Western Balkans’ electricity. The exception is Albania, which relies almost exclusively on hydroelectric sources, a factor that justifies the lower intensity of emissions. Furthermore, the type of coal used in the region is lignite, which is particularly polluting and has a low calorific value: which means that to produce the same amount of energy it is necessary to burn more lignite than other types of coal. However, lignite is a cheap energy source that makes the Western Balkans less dependent on imports, as it is abundantly available in the region. The result is that the sixteen coal-fired plants in operation are more polluting than other European plants. In 2016 alone, 3,900 premature deaths were attributed to pollution from these plants, according to a 2019 CEE Bankwatch report .

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A Green Agenda for the Western Balkans

After having long lacked a concrete plan to reduce emissions, in 2020 the governments of the Western Balkans signed theGreen Agenda for the Western Balkans (GAWB), with the support of Brussels. The Green Agenda mirrors the EU Green Deal and shares the goal of achieving zero emissions by 2050 and reducing emissions by at least 55% below 1990 levels by 2030. Composed of five pillars, the Agenda it requires alignment with the EU Climate Law and thus the reduction of greenhouse gas emissions for example through the switch to renewable energies and the development of the railway system. The GAWB action plan sets out concretely the measures to be taken to achieve the objectives.

So far, NGOs criticize countries’ delay in implementing new climate legislation in line with the EU. To achieve zero emissions by 2050, energy intensity and emissions intensity must necessarily decrease. Montenegro, North Macedonia and Albania already seem to be giving positive signals, at least as regards energy intensity: each unit of economic production requires less energy than in the past. This trend is called “decoupling” and implies that an increase in GDP does not lead to a parallel increase in emissions. A country can either decouple by using less energy per unit of GDP, or produce fewer emissions by using alternative renewable energy sources to coal or other fossil fuels. However, as the graph below indicates, the economies of Serbia and Bosnia and Herzegovina are still very energy-intensive. And despite some progress, even most European countries are still far from absolute decoupling. There is therefore still a lot of work to be done to achieve complete decarbonisation by 2050.

Decarbonisation to remain competitive

One measure foreseen in the GAWB’s action plan by the end of 2024 is the introduction of a price for greenhouse gas emissions, i.e. the idea behind the EU Emissions Trading System (ETS). . Today the Western Balkans are not part of the ETS, which means that the energy they produce and export to the EU is cheaper than the energy and goods produced in the EU under the ETS. For this reason, starting from 2026 Brussels will apply a additional fee on products from third countries and imported into the EU, commensurate with the greenhouse gases generated during their production.

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To quantify the emissions and therefore the volume of costs to be paid under this new mechanism, companies in the Western Balkans will have to start reporting information on their emissions from October 2023. According to estimates for 2020, the emissions of the Western Balkans they would have a total cost of 1.2 billion euros, which could grow further with the increase in CO2 prices. Therefore, the countries of the Western Balkans will have to decarbonise their economies also to remain competitive with the EU.

“The political will is lacking”

However, many NGOs in the region criticize the lack of concrete actions to meet the commitments made. In June 2022, in view of a meeting between the leaders of the EU and the Western Balkans, they signed a open letter from the Climate Action Network which underlines how the current investment proposals help to “maintain the status quo of fossil fuels in the region”.

Phase-out of coal is a social and economic challenge for Western Balkan countries, which are heavily dependent on fossil fuels. For this “a greater commitment on the part of stakeholders is needed”, says Milka Gvozdenović, head of the environmental sector of the NGO Young Researchers of Serbia. In her opinion, the road to the crucial goal of coal elimination lacks concrete actions: “If we look at the daily facts, actions and decisions, it is clear that the political will is lacking.” Both Serbia and Bosnia and Herzegovina still have plans to build new coal-fired power plants. And although Serbia adopted a climate change law in 2021, Gvozdenović argues that “the law has not brought about any real changes.

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Many implementation measures on climate change are still missing. Until 2023, only three have been adopted, but there are more than fifteen to go, without which the climate change law cannot be properly implemented. The deadline for the adoption of all implementing measures expired in March 2022″. In his opinion, the main obstacle to the ecological transition in Serbia is the lack of transparency and public participation. Even if the obstacles to decarbonization differ among the Western Balkan countries, a report from the Friedrich Ebert Foundation it shows that all countries are dealing with a lack of the rule of law and the capacity to implement the rules.

But Lejla Hukić, project manager of the Bosnian NGO Forestry and Environmental Action, remains optimistic. Recent legislation, such as Bosnia and Herzegovina’s Energy Strategy Framework, “reflects the shared commitment to increase the use of renewable energy sources and improve energy efficiency,” she says. Hukić believes that “generally, governments are interested in implementing the Green Agenda in the Western Balkans”.

However, he stresses that “access to finance and international collaboration” are necessary for the success of the ecological transition. The Green Agenda is accompanied by a financing plan that promises €9 billion of investment by the EU, which in turn should mobilize a total of €20 billion of investment in the region. A 1.8 billion euro loan has already been released. The majority of approved projects involve the construction of road and rail systems, followed by investments in clean energy. Among these are not only solar energy, but also several hydroelectric projects throughout the region, some of which are controversial. Despite these investments, the transition to full decarbonisation will take time and more effort.

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