Western Balkans Competitiveness Outlook 2024: Montenegro

14. Environment policy

Abstract

A healthy and sustainable environment is crucial for economic competitiveness as it supports resource efficiency, enhances resilience to climate-related risks, fosters innovation, and attracts investments while mitigating environmental degradation and associated costs. The chapter analyses the robustness and comprehensiveness of environment policies across four sub-dimensions. The first sub-dimension, climate action, assesses strategies aimed at both mitigating and adapting to climate change. The second sub-dimension, circular economy, focuses on policies promoting waste minimisation, resource efficiency, as well as sustainable production and consumption. The third sub-dimension, protection of ecosystems, explores challenges in managing freshwater, biodiversity and forestry, as well as land-use. The fourth sub-dimension, depollution, analyses policies related to air quality, water supply and sanitation, and industrial risk management, paramount for enhancing competitiveness while ensuring environmental sustainability.

Key findings

Montenegro’s score for environment policy remains similar to that in the last Competitiveness Outlook (Table 14.1). While progress has been achieved in enhancing climate action and circular economy policies, further efforts are needed to improve the ecosystem protection framework. Nonetheless, Montenegro remains the second-best performing economy for environment policy in the Western Balkans.

Table 14.1. Montenegro’s scores for environment policy

Dimension	Sub-dimension	2018 score	2021 score	2024 score	2024 WB6 average
Environment	13.1: Climate action			3.0	2.5
	13.2: Circular economy			2.3	2.2
	13.3: Protection of ecosystems			2.0	2.1
	13.4: Depollution			2.5	2.3
Montenegro’s overall score		1.8	2.4	2.4	2.3

The key findings are:

• Montenegro’s climate change framework has advanced since the last assessment, in line with obligations under the Paris Agreement and EU directives. Mitigation targets and projections have been set and climate risks have been assessed, with relevant policies under development. Montenegro is also the only Western Balkan economy to have introduced a national Emissions Trading System as a cap-and-trade scheme for major carbon dioxide (CO₂) emitters, despite challenges in the initial design and implementation of the scheme.

• Montenegro has made significant strides towards a circular economy by adopting the Circular Economy Strategy and an associated Action Plan, making it one of the most advanced economies in the region. Despite this progress, effective waste management remains a significant challenge. The National Waste Management Plan, which expired in 2020, has been revised but is still awaiting adoption, and the targets for waste reduction, recycling, and recovery have not been achieved within the evaluated timeframe.

• While relevant legislative and policy frameworks remain to be adopted, ongoing efforts are under way to enhance ecosystems’ protection, focusing on river basin management, improvement of water monitoring and additional management plans for protected areas. Land use management remains underdeveloped and limited progress was achieved to develop the related frameworks further.

• Measures have been taken to combat pollution in Montenegro, with notable investments planned for wastewater treatment and enhanced management of chemicals. The air quality policy framework has yet to be adopted and efforts to reduce air pollution remain to be scaled up.

State of play and key developments

Sub-dimension 13.1: Climate action

Over the past decade, Montenegro witnessed a net decline in greenhouse gas emissions, achieving a 13.1% reduction from 2011 levels by 2020 (Eurostat, 2023[1]). In 2021, the energy sector was the primary source of Montenegro's emissions, contributing 75.8%, largely due to coal-powered electricity production. This was followed by waste management (10%), industrial processes (7.8%), and agriculture (6.5%) (Government of Montenegro, 2023[2]). Montenegro is facing increased climate risks, including more frequent floods, droughts, erosion, and sea level rise (UNDP, 2024[3]). Historical climate data indicate a significant warming trend, particularly notable in summer temperatures. Projections meanwhile suggest a continued rise in temperatures, with an expected increase of the mean annual temperature by 3°C by 2070, and a shift in precipitation patterns, leading to reduced summer rainfall and decreased snowfall, particularly affecting the north and central regions (Government of Montenegro, 2021[4]).

As a Non-Annex I signatory1 to the United Nations Framework Convention on Climate Change (UNFCCC), Montenegro has committed to reach net-zero emissions by mid-century, in line with the Green Agenda for the Western Balkans. While further alignment of Montenegro’s Law on Protection against Adverse Impacts of Climate Change (2019) with the EU acquis is necessary,2 the National Climate Change Strategy (2015-30) is being continuously implemented (98% of measures planned for the period 2018-21 were introduced) (Government of Montenegro, 2022[5]). Moreover, Montenegro submitted its revised Nationally Determined Contribution (NDC) in 2021, raising its economy-wide emissions reduction target to 35% below 1990 levels by 2030 (compared to the 30% set out in its initial NDC). To monitor the progress and implementation of the NDC, Montenegro developed the NDC Implementation Roadmap, which delineates responsibilities, timeframes and funding sources, and includes monitoring and evaluation. Co-ordination among all institutions involved in climate change matters is ensured through the Directorate for Climate Change, led by the Ministry of Tourism, Ecology, Sustainable Development and Northern Region Development, although there is a need to strengthen administrative capacities (European Commission, 2023[6]).

Montenegro aims to strengthen its climate change mitigation framework with the development, albeit delayed, of the National Strategy and Action Plan for Low-Carbon Development, as foreseen under the Law on Protection from the Negative Impacts of Climate Change. The strategy foresees the methodology, technical descriptions and data, methods, policies and measures, as well as scenarios for greenhouse gas (GHG) emissions reduction, for the period from 2030 to 2050. In parallel, projections for achieving a 55% GHG emissions reduction by 2050 are being prepared as part of the development of the Integrated National Energy and Climate Plan (NECP), scheduled to be adopted in June 2024. A GHG inventory covering the period until 2019 is available as part of Montenegro’s Third Biennial Update Report (2020), with the subsequent period expected for 2025. High-carbon activities in the energy and industry sectors are meant to be discouraged with the national Emissions Trading System – ETS, introduced in 2020 as a cap-and-trade scheme for major carbon dioxide (CO₂) emitters.3 Funds raised from the scheme are to be transferred into the Environmental Protection Fund and used for renewable energy sources (in the amount of EUR 4.1 million), the protection of the environment (EUR 2.67 million) and to promote innovation in accordance with the Smart Specialisation Strategy (EUR 1.1 million). The first auction awarding emission credits and allocating the collected funds was announced in 2023. Nevertheless, there are identified issues with the conception of the ETS scheme. These include the slow reduction in the cap until 2030, lack of clear rules for the end of free allowances, and insufficient fines for non-compliance4 (CEE Bankwatch Network, 2022[7]). Relevant legislation should be revised, and a monitoring mechanism should be established to address these issues.

In addition to climate change adaptation measures envisaged in Montenegro’s NDC,5 the National Adaptation Plan (NAP) is under preparation with the support of the UNDP and the Green Climate Fund (GCF), and planned to be adopted in the second half of 2024. Enhanced resilience will be targeted in the four identified sectors most vulnerable to climate change: water, health, tourism and agriculture. Montenegro’s ability to manage risks from disasters was strengthened with the preparation of the Disaster Risk Assessment of Montenegro at the end of 2021, which includes an analysis of nine risk groups and the technical, administrative and financial capacities of the state in responding to such disasters, as envisaged in the Strategy for Disaster Risk Reduction (2018-23). The Assessment aims at improving disaster risk reduction locally, facilitating the integration of risk reduction in policies, strengthening and increasing early warning capacities, and preventing new risks. This should provide impetus to strengthen early warning systems, in particular targeting droughts by enhancing capacities of the Inter-Sectoral Drought Advisory Board, which have not yet been established despite envisaged as part of Montenegro’s National Drought Plan. Municipalities and policy makers in charge of implementing adaptation measures have received capacity building and training on the topics of resilient infrastructure (2021), urban adaptation (2021) and the risk of flash flooding and forest fires (2022).

Data collection and sharing have been strengthened in the assessed period. Enhanced climate risk data and projections have been provided by the Institute for Hydrometeorology and Seismology (IHMS), with precipitation and stream-gauging networks extended to measure real-time data for transboundary flood forecasting, through the upgrade of 10 stations. Moreover, historical data on disaster damages from municipalities, damage assessment commissions and ministries have been consolidated as part of a project implemented by the Directorate for Protection and Rescue (DPR) since 2021. The DPR is also working on an application that will contain data on climate risks identified as part of the Disaster Risk Assessment.

Sub-dimension 13.2: Circular economy

Transitioning to a circular economy requires measures that encompass the entire life cycle of products, spanning from design and manufacturing to consumption, repair, reuse, recycling, and bringing resources back into the economy. As one of the first Western Balkan economies to develop a circular economy framework, Montenegro’s policies covering sustainable resource use, consumption and production are well developed and co-ordinated.6 Further to the development of the Roadmap towards a Circular Economy, developed by UNDP and the Chamber of Economy in 2022, the National Strategy for Circular Transition until 2030 was adopted in December 2022 with an Action Plan for the period 2023‑24. The strategy aims at boosting the circular transition through four identified priority sectors (agriculture, forestry, construction and tourism), and crosscutting areas (technological development and innovation; energy efficiency; green public procurement; education and promotion). The Action Plan has over 60 activities and 23 stakeholders on board, and focuses on promotion of the use of secondary materials and productions and programmes offering financial incentives and instruments to increase business circular initiatives, and non-financial instruments to increase business opportunities in green and innovative technologies.7 While the financial sustainability of these measures is foreseen with the development of a detailed financial analysis, efficient co-ordination among all actors will need to be ensured. Awareness raising on circular economy concepts for citizens and public authorities is being strengthened, with the first roundtable organised focusing on resource efficiency at the production phase. Programmes have been implemented by the Ministry of Economic Development to promote circularity among businesses, namely through the Programme for the Improvement of Competitiveness.8

While waste generation in Montenegro has increased in the past decade, waste management remains a challenge in the economy, where the majority of municipal waste is disposed of in often unsanitary landfills (93% in 2021, compared to 23% in the EU) and only 6.9% is recycled (Eurostat, 2021[8]). Efforts have been undertaken to strengthen the legal waste framework with the new Law on Waste Management, adopted by the parliament in April 2024, further aligning with EU directives.9 Main developments of the law include the establishment of extended producer responsibility schemes for different waste streams,10 more rigorous sanctions for polluters, and the formation of a state inspection to control the implementation of local municipal waste management plans. The law includes a prohibition on the use of lightweight plastic bags, acknowledging the challenges posed by plastic pollution and the issue of marine litter in Montenegro's environment. Some of these measures are planned to be implemented as part of the National Strategy for Circular Transition. Nevertheless, the National Waste Management Plan, which expired in 2020, has not been revised in 2022 as planned, thus impeding proper enforcement of measures. Namely, waste recycling targets for 2020 (50% of total collected waste, 53% of packaging waste, 20% of plastics waste and 46% of paper and cardboard waste) have not been attained in the assessed period and the construction of planed regional landfills did not start, despite the urgent need to remedy illegal waste disposal and subsequent risks for the ecosystem and human health. While pilot projects for separation at source have been introduced in five municipalities in 2020, these have not been conducive to uptake of the practice. Suboptimal implementation in this regard is mainly due to the lack of human and financial capacities among responsible institutions and the lack of financial incentives for citizens and businesses, as waste fees are not based on volume.

Sub-dimension 13.3: Protection of ecosystems

Montenegro is a water-rich economy with numerous rivers, lakes, and springs, contributing to its overall water wealth. Its underground potential is estimated at 14 000 litres/second and its average runoff at 44 litres/second/km² (compared to the world average of 6.9 litres/second/km²) (Environmental Protection Agency of Montenegro, 2023[9]). Management and conservation of freshwater resources are hence crucial, particularly in light of rising challenges posed by pollution and the impacts of climate change.

The freshwater management legislation framework is not yet fully aligned with the EU acquis, and further efforts are needed to step up the process (European Commission, 2023[10]). The Laws on Water (2018), the Provision of Sanitary Water for Human Use (2017) and Freshwater Fishery and Aquaculture (2019) nevertheless regulate basic provisions for the protection of water bodies, prevention of pollution at source, and water quality. Long-term planning of water resources and their sustainable management are envisaged as part of the Water Management Strategy (2017-35) and other sectoral strategic documents (agriculture, tourism, industry). To ensure efficient implementation of the legal and policy frameworks, administrative capacities of relevant public authorities have been strengthened, with additional personnel hired at the Water Directorate of the Ministry of Agriculture, Forestry and Water Management and at the Directorate for Inspection Affairs, in charge of the supervision of watercourses. Moreover, stronger emphasis on the preservation of river basin management has been ensured with the adoption of two new River Basin Management Plans in 2022 – one for the Danube Basin and one for the Adriatic River Basin, both containing analyses of main pressures and risks to water bodies as well as concrete measures to achieve environmental targets. Further advancements were made in enhancing flood preparedness with the development of hazards maps and flood risk maps in 2022, and proposals for flood risk management plans for the Danube and Adriatic basins are in progress and expected to be adopted at the end of 2024. Moreover, regional co-operation on flood risks has been enhanced with the Flood Risk Management Plan Updates, adopted in 2022, under the Montenegrin presidency of the International Commission for the Protection of the Danube River.

A few activities were conducted to strengthen further awareness of water protection, including a public call to support NGOs’ projects on identifying sources of water pollution11 and a video campaign on countering water shortage. Improvement of the water monitoring framework is under way, following adoption of the programme for monitoring surface and groundwater in 2024, which will lead to establishing a national water information system compiling nationwide data on water quality, quantity, and allocation regimes. This will facilitate cross‑institutional co-ordination and data sharing to ensure informed policy decisions about competitive water use and tradeoffs across sectors.

Limited progress has been made in advancing the legal and policy frameworks for biodiversity and forestry management to meet EU and international best practices. While the Law on Nature Protection has been extensively revised to further align with the EU acquis and the UN Convention on Biological Diversity, its adoption has been pending since 2020. The revised law aims to preserve and improve the status of biodiversity in Montenegro, through increased monitoring of natural assets, harmonised management plans and the sustainable use of non-renewable natural resources. Following extensive consultations conducted in 2023, the draft law will undergo further revision to incorporate feedback and suggestions received during the process. While the National Biodiversity Strategy has also not been revised since it expired in 2020, preparations of the National Biodiversity Strategy and the Strategy for the Protection of the Marine Environment have begun. Implementation has advanced in the assessed period, driven by enhanced personnel capacity in the Directorate for Nature Protection of the Ministry. Activities continued to identify protected areas and species, with a total of eight management plans adopted despite delays (three for marine protected areas and five for national parks12) and the first red list13 for birds introduced in 2022. The share of territorial protected areas remains similar to that in 2020 (13.2% in 2023), while the share of marine protected areas grew considerably (from 0% in 2020 to 1.8% in 2023), despite falling short of international targets (the Aichi targets for 2020 aimed to achieve 17% coverage for terrestrial protected areas and 10% for marine protected areas (UN Convention on Biological Diversity, 2020[11])). Moreover, some awareness-raising activities have been organised to protect biodiversity in different sectors, such as tourism, agriculture and forestry.14 While biodiversity monitoring is increasing with additional management plans and conservation instruments, coverage still remains insufficient to allow for a systematic assessment of conservation efforts and identification of risks. Some progress can nevertheless be reported with the development of the first database on marine monitoring on the basis of the geographic information system.15

Montenegro hosts rich diversity as forests cover 61.5% of its territory in 2021, a much higher share than the EU average (39.9%) (World Bank, 2023[12]). While forests can be key to ensuring resilience in light of the increasingly changing climate, human pressures cause important risks to forestry resources (in particular illegal tree logging, tourism, forest fires and construction). To ensure the preservation of forests, Montenegro started working on amending the Law on Forests to prohibit the use of burned forestland for a period of 30 years after the date of the fire, thereby providing a legal instrument for discouraging investor fires and benefiting forest restoration programmes. The amendments also foresee the reorganisation of concessions to ensure proper management of forestry resources. Sustainable management of forests should also be enhanced with the revised Forestry Development Strategy, which is in the drafting process. A forest inventory exists, easing data collection for forest management plans, and more detailed data on the conditions of forests – and the impacts of air pollution in particular – are also collected in 49 forest plots as part of the ICP Forests project.16 Nevertheless, monitoring only covers public forests, despite private ones representing 49% of total forest areas (FAO, 2020[13]).

Land use management in Montenegro remains underdeveloped and limited progress was achieved to further develop relevant legal and policy frameworks. Institutional co-ordination on all economic, environmental and social aspects of land use remains limited, although the recently established Department for Air, Water and Soil at the Ministry of Environment could boost activities related to land use management. A comprehensive land use policy document has not been developed at the national or local levels, despite a 2016 study highlighting relevant policy instruments to ensure coherence between agricultural, fiscal, real estate investment, urban and environment policy. The framework covering agricultural lands was nevertheless strengthened, with the adoption of the Strategy of Agriculture and Rural Areas Development (2023-28), which defines the long-term management of agricultural resources, with a focus on food security and rural areas. A commission on the valorisation of state-owned agricultural land, active since 2017, also ensures the protection, use and development of these areas.17 So far, no measures to combat soil erosion, restore degraded land, or limit urban sprawl into green areas have been conducted, although some measures on sustainable food production and soil organic carbon shall be integrated into a project under the Western Balkans Soil Partnership. Data sharing on soil management is also planned to be strengthened at the regional level, with the establishment of the Western Balkan soil map. Currently, data on land use remain limited and are not georeferenced or harmonised across government bodies.

Sub-dimension 13.4: Depollution

Air quality remains an important environmental challenge in Montenegro, with annual average concentrations of fine particulate matter (PM_2.5) reaching 17.3 micrograms per cubic metre air (µg/m³) in 2021, more than three times higher than WHO recommended levels of 5 µg/m³, mostly resulting from the combustion of solid fuels (wood and coal) and traffic emissions (EEA, 2023[14]). Pljevlja, where Montenegro's lignite power plant is situated, experiences the highest levels of pollution (Government of Montenegro, 2023[15]). The new Air Quality Strategy until 2029 has been prepared in 2020; however, its adoption has faced several years of delays. This delay undermines the progress achieved in implementing over three-quarters of the measures outlined in the preceding strategy (2013-20). Under the draft strategy, three new air quality plans covering municipalities where air pollution exceeds limits are planned to be developed, tailored to local sources or air pollutants. In 2021, a new regulation setting emission limit values for combustion plants and multiple fuel types was adopted. This regulation mandates regular inspections, bringing it into closer alignment with EU directives.18 The ecological reconstruction of the thermal power plant Pljevlja aimed at reducing its emissions (main emitting source of sulphur oxide [SOx] and nitrogen oxide [NOx]) is advancing with some delays, although core polluting issues are not addressed (for instance, ecological restoration will have no effect on CO₂ emissions) and economic alternatives for communities affected most by the coal phaseout remain to be tackled (UNDP, 2023[16]). Air quality monitoring has not changed since the last assessment and consists of 10 automatic all-day stations. However, data collection and management capacities at both the national and local levels are planned to be enhanced, facilitated by donor funding.19

Montenegro is endowed with substantial water resources; however, it faces escalating pollution challenges, mainly stemming from untreated wastewater (in 2022, only 55% of domestic wastewater is safely treated, in contrast to over 90% in the EU). The water supply and sanitation regulatory framework has seen improvement since the last assessment with the development of the new Law on Water Services (planned to be adopted in 2025), which will regulate water supply services such as the delivery of drinking water and municipal wastewater management while only partially aligning with the EU Water Framework Directive. Despite water tariffs remaining low and insufficient to cover infrastructure investments, there are plans to gradually address the needs of the most vulnerable groups in society. Notably, amendments to the Law on Communal Activities, approved in December 2022, now allow for the subsidisation of specific users of communal services. Implementation of the Municipal Wastewater Management Plan 2020-35 is under way with international support, marked by the commissioning of two new municipal wastewater treatment plants in 2023 (Andrijevica and Petnjica).20 Moreover, funding has been secured for the construction of additional plants and sewerage networks.21

The legal and policy framework for industrial risk management has seen moderate improvements since the last assessment. General policies for industrial risks have been incorporated into the National Disaster Risk Assessment prepared in 2021. Additionally, the establishment of the Pollutant Release and Transfer Register (PRTR) is in progress and planned for the end of 2024; it will aim to enhance transparent reporting of industrial pollution.22 Notable strides have been made to strengthen the regulatory framework for chemicals, with the adoption of a new rulebook in 2023 for the preparation of safety data sheets for chemicals, in line with the EU Regulation on the registration, evaluation, authorisation and restriction of chemicals (REACH) (European Commission, 2024[17]). On the policy side, the National Chemicals Management Strategy 2024-26 was adopted, containing 25 measures to reduce the risks of hazardous chemicals for better protection of human health and the environment. Nevertheless, a soil management programme is lacking and no permanent solutions for hazardous waste disposal are in place. Several contaminated industrial sites have nonetheless been identified and remediated with the support of international co-operation partners.23 Most notably, around 640 tonnes of hazardous manufacturing waste and equipment have been identified and 475 tonnes permanently disposed of in 2022; two slag and tailings ponds were remediated; and around 14 500 tonnes of contaminated soils were exported in 2023.

Overview of implementation of Competitiveness Outlook 2021 recommendations

Montenegro’s progress on implementing past CO Recommendations for environment policy has been mixed: below, Table 14.2 shows the economy’s progress.

Table 14.2. Montenegro’s progress on past recommendations for environment policy

Competitiveness Outlook 2021 recommendations	Progress status	Level of progress
Ensure that measures for municipal waste management are accompanied by appropriate educational activities, and step up actions to raise awareness of waste prevention, waste separation, waste reduction and recycling	Implementation of waste separation at source has remained limited in the assessed period. While planned as part of the Waste Management Plan, no awareness-raising activities have been conducted. The new Proposal Law on Waste Management and Circular Economy Strategy contain measures for waste prevention and recycling.	Limited
Direct more investment into improving wastewater systems and treating more wastewater	The Municipal Wastewater Management Plan 2020-35 was adopted in October 2019. It maps the construction of wastewater treatment plants (WWTPs) in 37 agglomerations. Construction of and investments in WWTPs are ongoing, with two new WWTPs built in two municipalities in 2023, and funds have been secured for the construction of three additional WWTP and sewerage networks in three municipalities.	Moderate
Introduce a comprehensive policy framework for identifying, characterising and remediating contaminated sites	As part of the project “Industrial Waste Management and Cleaning (2014-20)”, several activities were conducted to reduce the contamination of natural resources and minimise public health risks of exposure to selected industrial waste disposal sites. Nevertheless, a comprehensive policy framework to manage contaminated sites has not been introduced.	Limited

The way forward for environment policy

While Montenegro has strengthened its regulatory and policy frameworks in several areas of environment policy, overall implementation could be further improved. Some of the priorities are as follows:

• Adopt the revised waste management strategy and ensure proper enforcement of its measures, in particular regarding extended producer responsibility schemes. The revised National Waste Management Plan, which expired in 2020, needs to be adopted without further delay. The strategy should include well-defined objectives and recycling, recovery and reduction targets for different waste streams. To ensure proper collection and recycling of waste and shift end-of-life management costs of products from the public sector to producers and consumers, the strategy should also include specific requirements for the enforcement of extended producer responsibility schemes, which are proposed in the draft Waste Management Law for four waste streams. To do so, Montenegro can follow the guiding principles laid out in Box 14.1.

Box 14.1. Guidance on implementing extended producer responsibility take-back schemes

OECD EPR Guidance

To effectively implement extended producer responsibility (EPR) take-back schemes to shift end-of-life management costs of products from the public sector to producers and consumers, and to increase the collection and recycling rates of these waste streams, economies should ensure application of the following principles (a selection of principles based on the OECD EPR Guidance):

• Clear legal framework – The legislation needs to be clear on the definitions and responsibilities of all actors involved in EPR. There needs to be a legal framework for producer responsibility organisations to operate. The EPR targets need to be periodically reviewed.

• Transparency – The governance of EPR systems needs to be transparent to provide more effective means for assessing the performance of the actors involved and holding them accountable for their activities. This will require collecting both technical and financial data and setting up registers of producers, accreditation of producer responsibility organisations, and appropriate sanctions.

• Sufficient existing waste management capacity – For EPRs to work effectively, adequate waste infrastructure needs to be in place across the country, including infrastructure for waste separation at source, collection and treatment (ideally recycling).

• Administrative oversight capacity for better enforcement – This concerns enforcement capacity to prevent unauthorised facilities and collection points from operating. This should also minimise freeriding and noncompliance.

• Stakeholder engagement – Platforms for dialogue among stakeholders need to be established.

Prevent Waste Alliance EPR Toolbox

To facilitate the adoption of general good practices and OECD guidance on EPR, authorities and other relevant actors could make use of the EPR Toolbox developed by the Prevent Waste Alliance, to consult other international practices and participate in knowledge exchange in order to enhance the functioning of the domestic EPR system. The EPR Toolbox contains three modules that span more general aspects of an EPR, including the monitoring of financial flows, but also focus on concrete actions, such as the integration of the informal sector or the creation of a market for recycled plastics.

Data collection and processing for EPR schemes, example of the Czech Republic

While certain technical requirements must be met, the first step towards ensuring transparency of EPR schemes is effective co-ordination and compliance with reporting obligations under applicable legislation. The Czech Republic’s electronic registry for waste is an exemplary model for a successful national waste information database. Recently rated as the best European system for waste data management and evaluation by the European Topic Centre for Circular, it employs two distinct systems. One handles the mandatory data reported by entities subject to relevant legal acts (Information System for Reporting Obligations), while the other manages the subsequent verification, processing and evaluation of the reported data (Information System for Waste Management). This streamlined process is further enhanced by extending verification authority to municipal and regional authorities, with the Environmental Information Agency functioning as the central data hub. By engaging a diverse array of stakeholders, including the statistical office, the information system becomes a catalyst for the development and implementation of evidence-based waste management policies.

Sources: OECD (2016[18]); Prevent Waste Alliance (2023[19]); Tuscano et al. (2022[20]).

• Mainstream biodiversity considerations into all relevant strategic documents and elevate the commitment to safeguarding natural heritage by significantly expanding the coverage of protected areas. It is crucial for Montenegro to revise its National Biodiversity Strategy, which expired in 2020, in order to establish a comprehensive long-term national vision for biodiversity, with well-defined targets and indicators. A global vision for 2050 already exists under the Convention on Biological Diversity, which Montenegro can adopt or tailor to its national circumstances. Montenegro should also ensure that biodiversity is mainstreamed across relevant strategies and programmes (e.g. national economic plans, national budgets, climate change and low-emission development strategies, agriculture, etc.) and strengthen inter-institutional co‑ordination by setting clear roles and responsibilities. In particular, biodiversity loss and climate change must be addressed together, given Montenegro’s vulnerability to climate-related hazards.

  In order to ensure efficient enforcement of biodiversity measures, Montenegro needs to significantly expand the coverage of protected area, which currently remains below international targets. Costa Rica's Payment for Environmental Services programme stands out as a successful model for expanding protected areas. Through this initiative, landowners receive financial incentives for maintaining or restoring ecosystems on their land, effectively discouraging deforestation. This approach has not only expanded protected areas but also fostered biodiversity conservation by creating biological corridors and engaging local communities in sustainable land management practices. The programme's success is attributed to a robust institutional framework, effective governance, and collaboration between the government, non‑governmental organisations, and communities. Currently, Costa Rica has expanded its officially protected areas to cover 25% of land and 30% of marine areas, well above the respective OECD averages (OECD, 2023[21]).

• Develop an all-inclusive land use policy framework and strengthen institutional co‑ordination among different ministries responsible for land use issues related to climate, biodiversity, agriculture, and industrial risks, both horizontally (at national level) and vertically (between different levels of government) to achieve a more holistic governance of land use. The land use nexus involves multiple issues and affects multiple actors from both the public and private sectors, and requires a whole-of-government approach to co-ordinate policies across all relevant stakeholders, which Montenegro currently lacks. One good practice example that provides such co-ordination is the Austrian Conference on Spatial Planning (Box 14.2).

Box 14.2. Enhancing land use co-ordination with the Austrian Conference on Spatial Planning

The Austrian Conference on Spatial Planning (ÖROK, Österreichische Raumordnungskonferenz) is an organisation dedicated to co-ordinating spatial planning policies among the three levels of government in Austria (the national level, the states and the municipalities). Its decision-making body is chaired by the federal chancellor and its members include all federal ministers, the heads of all federated states, and representatives of associations of local governments. Furthermore, business and labour organisations are represented on the body as consulting members. The work of the decision-making body is supported by a permanent secretariat with a staff of approximately 25-30.

One of the central tasks of the ÖROK is the preparation of the Austrian Spatial Development Concept (ÖREK, Österreichisches Raumentwicklungskonzept). The current Austrian Spatial Development Concept (“ÖREK 2030”) was published in 2021 and covers a planning period of around ten years. Guided by the key theme of “Need for Transformation”, it is a strategic instrument for overall spatial development in Austria. Beyond the preparation of the Spatial Development Concept, the ÖROK also monitors spatial development across Austria. It has developed an online tool that provides a mapping function of a variety of important indicators at the municipal and regional level, and releases a report on the state of spatial development every three years.

The ÖROK is also the co-ordinating body for structural funds provided by the European Union. It manages the integration of structural funds into broader spatial strategies and was directly responsible for the programming work related to 1 of the 11 Thematic Objectives of the programming period 2014-20. The ÖROK also serves as National Contact Point within the framework of European Territorial Cooperation.

Sources: OECD (2017[22]); ÖROK (2024[23]).

References

[7] CEE Bankwatch Network (2022), The Cautionary Tale of Montenegro’s Emission Trading Scheme, https://bankwatch.org/blog/the-cautionary-tale-of-montenegro-s-emission-trading-scheme (accessed on 16 January 2024).

[14] EEA (2023), Montenegro – Air Pollution Country Fact Sheet, https://www.eea.europa.eu/themes/air/country-fact-sheets/2023-country-fact-sheets/montenegro-air-pollution-country (accessed on 14 February 2024).

[9] Environmental Protection Agency of Montenegro (2023), “Information on state of the environment for 2022”, https://epa.org.me/informacije-o-stanju-zivotne-sredine.

[24] European Central Bank (2023), ECB Data Portal, https://data.ecb.europa.eu/data-comparison/e595831e-7662-41cf-ab04-f191303138ac (accessed on 24 November 2023).

[17] European Commission (2024), REACH Regulation, https://environment.ec.europa.eu/topics/chemicals/reach-regulation_en (accessed on 15 February 2024).

[6] European Commission (2023), Montenegro 2023 Report, https://neighbourhood-enlargement.ec.europa.eu/montenegro-report-2023_en (accessed on 5 February 2024).

[10] European Commission (2023), Montenegro Report 2023, EC, Brussels, https://neighbourhood-enlargement.ec.europa.eu/montenegro-report-2023_en.

[1] Eurostat (2023), Enlargement Countries - Environment Statistics, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Enlargement_countries_-_environment_statistics&oldid=627524 (accessed on 1 March 2024).

[8] Eurostat (2021), Municipal Waste Statistics, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Municipal_waste_statistics (accessed on 1 March 2024).

[13] FAO (2020), Global Forest Resources Assessment - Montenegro, Food and Agriculture Organisation of the United Nations, Rome, https://www.fao.org/3/cb0029en/cb0029en.pdf.

[15] Government of Montenegro (2023), Information on the State of Environment for 2022, https://www.gov.me/dokumenta/3b9ecc99-06c0-4995-b20e-d723f81847a1.

[2] Government of Montenegro (2023), National Inventory Report 2023 of Montenegro, https://unfccc.int/documents/631540.

[5] Government of Montenegro (2022), Report on the Implementation of the National Climate Change Strategy until 2030 (period 2018-2021), https://www.gov.me/dokumenta/57944aff-dc8d-4afb-8396-6a88a88034ce.

[4] Government of Montenegro (2021), National Programme of Priority Activities in the Field of Climate Change Mitigation and Adaptation in the Framework of Cooperation with the Green Climate Fund 2021–2023, https://www.sustainability.gov/pdfs/ggi-montenegro-priority-activities.pdf.

[21] OECD (2023), OECD Environmental Performance Reviews: Costa Rica 2023, OECD Publishing, Paris, https://www.oecd-ilibrary.org/environment/oecd-environmental-performance-reviews-costa-rica-2023_ec94fd4e-en.

[22] OECD (2017), The Governance of Land Use in OECD Countries: Policy Analysis and Recommendations, OECD Publishing, Paris, https://doi.org/10.1787/9789264268609-en.

[18] OECD (2016), Extended Producer Responsibility: Updated Guidance for Efficient Waste Management, OECD Publishing, Paris, https://doi.org/10.1787/9789264256385-en.

[23] ÖROK (2024), “Austrian conference on spatial planning – ÖROK”, https://www.oerok.gv.at/english-summary#:~:text=The%20Austrian%20Conference%20on%20Spatial,development%20at%20the%20national%20level.

[19] Prevent Waste Alliance (2023), EPR Toolbox, GIZ, https://prevent-waste.net/epr-toolbox.

[20] Tuscano, J. et al. (2022), Electronic Registries for Waste Across Europe, ETC CE Report 2022/3, European Topic Centre for Circular Economy and Resource Use, https://www.eionet.europa.eu/etcs/etc-ce/products/etc-ce-products/etc-ce-report-3-2022-electronic-registries-for-waste-across-europe.

[11] UN Convention on Biological Diversity (2020), Aichi Biodiversity Targets, https://www.cbd.int/sp/targets (accessed on 15 July 2024).

[3] UNDP (2024), Enhancing Montenegro’s Capacity to Integrate Climate Change Risks into Planning, https://www.adaptation-undp.org/projects/naps-gcf-montenegro#:~:text=The%20projected%20impacts%20of%20climate,to%20water%20quality%20and%20ecosystems. (accessed on 1 March 2024).

[16] UNDP (2023), Diagnostics of Socio-economic Situation of Coal Region Pljevlja, United Nations Development Programme (UNDP) in Montenegro, https://www.undp.org/sites/g/files/zskgke326/files/2023-09/diagnostics_of_socio-economic_situation_in_the_coal_region_pljevlja_final_1.pdf.

[12] World Bank (2023), Forest area (% of Total Land), https://data.worldbank.org/indicator/AG.LND.FRST.ZS (accessed on 17 January 2024).

Notes

← 1.  Annex I countries in the context of the UNFCCC are often referred to as developed or industrialised nations, whereas Non-Annex I countries include a diverse group of nations, primarily developing countries, with varying levels of industrialisation and economic development. These countries are not bound by the same mandatory emission reduction targets as Annex I countries. Instead, they are encouraged to take voluntary actions to address climate change and may receive support, including financial assistance and technology transfer, from Annex I countries.

← 2.  Considerable work is still required to align national legislation with the EU acquis, such as incorporating the remaining aspects of the EU Emissions Trading System (ETS), the Effort Sharing Regulation and the Governance Regulation (European Central Bank, 2023[24]).

← 3.  Free emissions allowances were granted to three plants: Pljevlja coal plant, KAP aluminium plant, and Tosčelik steel mill.

← 4.  Other issues include the potential for surplus credits due to the Pljevlja plant’s modernisation and the questionability of the allocation of free credits to KAP given its bankruptcy status.

← 5.  Montenegro’s revised NDC includes adaptation and resilience measures in the following areas: water, infrastructure, transportation, agriculture, forestry, tourism and health.

← 6.  Circular economy matters are co-ordinated by the Directorate for Improving the Competitiveness of the Economy of the Ministry of Economic Development and the Working Group for the Promotion of Green Transition as part of the Secretariat to the Competitiveness Council of Montenegro.

← 7.  Non-financial tools include a toolkit for businesses on the circular economy, eco-labels, green certifications and an EU Eco-Management and Audit Scheme (EMAS).

← 8.  The Ministry of Economic Development is currently executing the Programme for the Improvement of Competitiveness, which allocated EUR 3 million in 2023. Within this programme, companies are offered special support for financing and assistance in transitioning towards "green" initiatives through the Programme Line for the Promotion of the Circular Economy. As part of the programme's commitment to empowering women and youth, specific financial and non-financial support measures are being implemented and directed towards these target groups. Furthermore, additional support is extended to business entities registered and operating in local self-government units (LGUs) with a development index of up to 100%.

← 9.  Namely the Waste Framework Directive (Directive 2008/98/EC) and the Landfill Directive (Directive 1999/31/EC).

← 10.  EPR schemes include packaging, electrical and electronic devices, waste batteries and tyres and single-use plastic products (bags and fishing equipment containing plastic).

← 11.  Seven projects were supported in the amount of EUR 50 000 in 2023.

← 12.  The marine protected areas concerned by the adoption of management plans concern Platamuni, Stari Ulcinj, and Katič, and the five management plans for national parks relate to Biogradska gora, Durmitor, Lovćen, Skadarsko jezero and Prokletije.

← 13.  A red list is a rich compendium of information on the threats to species, their ecological requirements, where they live, and information on conservation actions that can be taken to reduce their risk of extinction.

← 14.  Awareness raising on the preservation of biodiversity and forests has been enhanced through projects like "Biodiversity Mainstreaming", funded by the Green Environment Facility. Led by the Ministry of Tourism with UNDP support, the project integrates biodiversity into sectoral policies, focusing on tourism, agriculture, and forestry. It sets standards for biodiversity-friendly forestry practices, supports private forest owners, and promotes biodiversity-positive entrepreneurship. The initiative also targets landscape preservation and habitat protection, and safeguards High-Conservation Value forests. In December 2023, the Ministry invited bids for the "Forest Area Development Plan" and guidelines on new forest planning methodologies. Collaborative events with NGOs have also been organised, with the aim of improving forest management in protected areas, preventing further ecosystem degradation.

← 15.  A geographic information system (GIS) is a computer system that analyses and displays geographically referenced information.

← 16.  The International Co-operative Programme on Assessment and Monitoring of Air Pollution Effects on Forests (ICP Forests) was launched in 1985 under the Convention on Long-range Transboundary Air Pollution (Air Convention, formerly CLRTAP) of the United Nations Economic Commission for Europe (UNECE). ICP Forests monitors forest conditions at two monitoring intensity levels in 42 countries in Europe and beyond.

← 17.  In 2020, for example, this commission denied a multi-year lease of state-owned agricultural land to a private company because of illegal construction and usurpation of state property.

← 18.  Relevant directives include the Industrial Emissions Directive (2010/75/EU), which covers a range of industrial activities including combustion plants, and the Medium Combustion Plant Directive (2015/2193/EU), which addresses the emissions from medium combustion plants with a thermal input between 1 MW and 50 MW.

← 19.  UNICEF & SwEPA: Improved air quality in the Western Balkans (2022-26) programme.

← 20.  These wastewater treatment plants have been financed half by national funds and half through a bilateral agreement with Slovenia.

← 21.  Funds have been secured for the construction of wastewater treatment plants (WWTPs) in Bijelo Polje, Kolašin, Rožaje and Mojkovac as well as sewerage networks in Kolašin, Rožaje and Mojkovac. The total value of investments for these projects stands at EUR 46.5 million and is covered through the Western Balkans Investment Framework and European Investment Bank loans.

← 22.  A final draft on the project terms of reference for the establishment of the PRTR Register in Montenegro was prepared in December 2022. The interconnection of six subsystems will make up the future PRTR system, which is expected by the end of 2024.

← 23.  Two projects have been undertaken: 1) ‘’Comprehensive Environmentally Friendly Management of PCB Waste in Montenegro’’ was implemented by UNDP in co-operation with the government of Montenegro and the Green Environment Facility in December 2022, and 2) “Industrial Waste Management and Cleaning (2014-20)" received funding from the World Bank through a loan.