Western Balkans Competitiveness Outlook 2024: Bosnia and Herzegovina

14. Environment policy

Abstract

A healthy and sustainable environment is crucial for economic competitiveness. 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 to mitigate and adapt 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

Bosnia and Herzegovina’s score for environment policy has increased compared to the last CO (Table 14.1), although it remains below the regional average. While some progress has been achieved in enhancing climate action policies and adopting frameworks to reduce pollution, further efforts are needed to improve the circular economy and ecosystem protection frameworks.

Table 14.1. Bosnia and Herzegovina’s scores for environment policy

Dimension	Sub-dimension	2018 score	2021 score	2024 score	2024 WB6 average
Environment	13.1: Climate action			2.3	2.5
	13.2: Circular economy			1.6	2.2
	13.3: Protection of ecosystems			1.8	2.1
	13.4: Depollution			1.9	2.3
Bosnia and Herzegovina’s overall score		1.3	1.7	1.9	2.3

The key findings are:

• Bosnia and Herzegovina has made notable advancements in strengthening its climate change framework. This progress is exemplified by adopting the Climate Change Adaptation and Low Emission Development Strategy and the National Adaptation Plan, which reflect heightened commitments to reduce greenhouse gas (GHG) emissions and bolster resilience against the impacts of climate change.

• While Bosnia and Herzegovina has begun to develop its circular economy roadmap, and both entities' recently adopted environmental strategies include promoting circular economy principles as a key goal, the integration of these practices by municipalities, citizens, and businesses is still at a low level. Moreover, waste management poses a significant economic challenge, with a predominant reliance on landfilling and minimal recycling levels.

• Ongoing efforts are under way to enhance ecosystems' protection, focusing on river basin management and developing a nature protection framework. Moreover, nature protection information systems were established in both entities to support decision making. However, there is a need to increase both human and financial resources to ensure the efficient implementation of the planned measures. Land use management remains underdeveloped, and limited progress has been made to further develop the related legal and policy frameworks.

• Air, water and soil pollution remain significant environmental challenges. However, there are planned measures to address air quality issues through an improved policy framework and modernising the monitoring network. The water supply and sanitation system framework is under revision to upgrade infrastructure and water fees, and remediation efforts are planned for certain industrial contaminated sites.

State of play and key developments

Sub-dimension 13.1: Climate action

Over the past two decades, Bosnia and Herzegovina has seen a noticeable increase in GHG emissions despite its modest contribution on the global scale.1 This rise is attributed predominantly to the economy’s heavy dependence on fossil fuels for energy generation, particularly coal. The energy sector constitutes 70% of CO₂ emissions, with energy conversion (thermal power plants, heating plants, transport) and fuel combustion in industry identified as the most energy-intensive sub-sectors (UNFCCC, 2021[1]). Concurrently, Bosnia and Herzegovina anticipate a growing climate change impact, with an increased vulnerability to hydrometeorological hazards and natural disasters. The primary drivers of these challenges are expected to be seasonal flooding and periods of drought, posing significant threats to various sectors, with agricultural productivity and water resource management being the most vulnerable. Over the period from 2009 to 2019, the economy encountered extreme weather conditions almost annually,2 intensifying spatial variations. Notably, regions experiencing water scarcity were also those having the highest water demands (UNFCCC, 2021[2]).

Bosnia and Herzegovina has made substantial strides in strengthening its climate change framework to align with its commitments outlined in the United Nations Framework Convention on Climate Change (UNFCCC) and the Green Agenda for the Western Balkans. The revised state-level Climate Change Adaptation and Low Emission Development Strategy 2020-30 was adopted in 2023 with a total budget of EUR 93 million, comprising EUR 8 million for mitigation and EUR 85 million for adaptation measures. The strategy aims to achieve a net reduction of 80% in emissions by 2050 compared to 1990 levels,3 in line with the revised Nationally Determined Contributions (NDC) (2021-30). Implementing the measures outlined in the NDC has been detailed in a specific roadmap and action plan, including identified investment needs for each sector, with the highest priority given to energy generation, buildings, and transportation.4 Moreover, the Environmental Strategy and Action Plan (ESAP) for Bosnia and Herzegovina 2030+, currently pending adoption, incorporates a climate change component. The ESAPs for both entities – the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS) – as well as the Brčko District have already been adopted by their respective governments in 2023, underscoring a commitment to addressing climate change at all levels of government. Co-ordination among all relevant institutions of Bosnia and Herzegovina5 has been strengthened through regular capacity-building activities, mainly conducted by the Global Environment Facility (GEF).6

In addition to the aforementioned documents, Bosnia and Herzegovina has strengthened its climate change mitigation framework by adopting the state-level Energy Strategy until 2035 and developing the National Energy and Climate Plan (NECP), defining GHG emissions reduction targets.7 The NECP, which will be adopted in 2024, will establish a timeline for implementing GHG emissions measurement, reporting, and verification. It will also define measures for introducing an Emission Trading System (ETS), to have it established by 2026 to meet EU requirements, particularly in anticipation of the Carbon Border Adjustment Mechanism (CBAM).8 The FBiH also launched a five-year Green Transition programme in 2024 focusing on decarbonisation and the energy transition, which envisages technical support for firms to prepare for the CBAM.9 This will be particularly pertinent as economic instruments and incentives to discourage high-carbon behaviour are limited and subsidies for coal-fired power continue, hindering commitments for GHG emissions reduction. In 2023, Bosnia and Herzegovina joined the Climate and Clean Air Coalition (CCAC), endorsing its 2030 Strategy to reduce short-lived climate pollutants substantially. The strategy aims to limit warming to 1.5°C and has sought CCAC assistance for national planning and mitigation efforts, with initial projects planned to be launched in 2024. Bosnia and Herzegovina also plans to incorporate considerations for a just transition into its framework and develop a draft Roadmap for the Transition of Coal-Rich Regions in 2023, with the support of the World Bank.10 The roadmap, which remains to be adopted, outlines options for energy conversion, retraining and labour mobility recommendations, and strategies for repurposing land previously used for mining and related facilities. With the support of international partners, four local self-government units in Bosnia and Herzegovina will act as pilot areas for a just transition towards decarbonisation by identifying strategies to reduce emissions and promoting innovative technologies and practices.11

Bosnia and Herzegovina is the first economy of the Western Balkans to adopt a climate change adaptation-specific policy framework. The National Adaptation Plan (NAP), adopted in 2022, was developed with the support of the governments of RS, the FBiH and the Brčko District, underscoring readiness to advance climate change adaptation at all levels of government. The NAP encompasses a comprehensive approach, featuring a risk assessment, future climate projections, a sector-wise overview of climate change impacts, and proposals for medium-term measures. These measures aim to mitigate the adverse effects of climate change on vulnerable areas, such as agriculture, water resources, forest resources, biodiversity, and tourism. Flood hazard and risk mapping have been conducted to enhance resilience to climate change impacts. Flood Risk Management Plans were developed to address and mitigate the identified risks. Nevertheless, emergency responses have not been defined, and compensation programmes are not in place for households, businesses or sub‑national governments.

Progress on cross-institutional data collection has started, which aligns with the NAP. To overcome the deficiency in disaster risk data collection and communication to citizens, Standard Operating Procedures12 were developed to facilitate both horizontal and vertical institutional co-operation for the exchange of climate data. Additionally, a well-defined framework for monitoring and evaluation has been established, ensuring the systematic updating of the NAP at regular intervals. Specific entity-level Climate Change Committees are also planned to facilitate co-operation.

Sub-dimension 13.2: Circular economy

Shifting to a circular economy necessitates measures addressing the complete life cycle of products, from design and manufacturing to consumption, repair, reuse, recycling, and reintegrating resources into the economy. Currently, resource productivity remains low in Bosnia and Herzegovina and approximately five times lower than in the EU (EUR 0.52/kg in 2021 compared to EUR 2.26/kg in the EU) (Eurostat, 2022[3]). Bosnia and Herzegovina is developing its circular economy roadmap to adopt enhanced sustainable practices and more effective resource management, integrating concepts envisaging sustainable resource use, consumption, and production. Developing the roadmap involves participation from all sectors of society, including representatives from state and entity-level institutions, the private sector, academia, and civil society, supported by the United Nations Development Programme (UNDP). Four main priority areas have been identified as part of the process: industry, waste, energy and agriculture. While both entities’ ESAPs foresee the transition to a circular economy and enhanced waste management, the uptake of such practices has remained limited and awareness of such concepts among citizens and businesses remains low. Limited incentives have been implemented to encourage the transition to a circular economy, such as initiatives to grant eco-labels or promote green public procurement.13 The circular economy also has yet to be mainstreamed across relevant sectoral policies.

Around 75% of the population is covered by waste management services in Bosnia and Herzegovina. However, the figure varies considerably between urban and rural areas, which can be as low as 40% (EEA, 2021[4]). Waste management remains a significant challenge, primarily due to limitations in infrastructure and operations caused by insufficient funding. Most waste is disposed of in non‑sanitary landfills14 and recycling remains minimal (less than 1%). There are more than 1 400 illegal dumpsites across the economy and no measures have been taken to reduce their number. Moreover, while both entities have extended producer responsibility (EPR) schemes for different waste streams,15 a lack of enforcement limits their effectiveness. Both entities have incorporated mandatory targets for recovering and recycling packaging waste into their legislative frameworks to address these challenges. In the FBiH, the Decree on Packaging and Packaging Waste Management adopted in 2023 sets a general target, increasing from 37% in 2023 to 45% by 2027 (out of which 5% must be collected from municipal waste). The RS Law on Waste Management (amended in 2021) establishes a general target of 35%. In 2023, the FBiH and RS adopted rulebooks16 on managing Waste of Electrical and Electronic Equipment (WEEE) to establish a more effective waste management system for electrical and electronic products through separate collection and treatment. Since the FBiH’s Waste Management Strategy expired in 2018, only RS has a sector-specific Waste Management Plan (for 2019-29), though limited implementation has been noted in the assessed period. Nonetheless, enhanced waste management is one of the strategic objectives of both entities’ ESAPs, notably by reducing waste generation, increasing recycling levels, reducing landfilling and developing new infrastructure. Recognising the challenges posed by plastic pollution in the environment, RS also plans to ban the use of certain disposable plastic products by 2027 (Government of Republika Srpska, 2022[5]).

Waste service fees collected are insufficient to cover the costs of waste collection throughout the economy, let alone waste infrastructure, and neither entity has undertaken new investments in waste treatment facilities. Moreover, data on waste composition and treatment are of suboptimal quality in both entities due to limited reporting by municipalities and the lack of weighting equipment at landfills, hampering proper waste management planning. An attempt to improve data collection has been made in the FBiH by establishing the waste management information system as part of the Environmental Protection Fund in 2021. Still, its impact is yet to be seen.

Sub-dimension13.3: Protection of ecosystems

Bosnia and Herzegovina is a water-rich economy, with 10 698 m³ of renewable freshwater resources per capita in 2020, more than three times higher than the EU average (3 037 m³) (World Bank, 2023[6]). Nevertheless, only around one-third of monitored water bodies had good ambient water quality in 2020 (UN Water, 2023[7]). In addition to increased water pollution and excessive exploitation, the forecasted precipitation and air temperature changes will negatively affect the current water resources management system. To address the challenges climate change has on freshwater management – particularly shifts in precipitation patterns and increasingly frequent droughts – both entities have made progress in strengthening their respective frameworks. The FBiH is more advanced in this regard, as it adopted regulations concerning hydropower plants, water intakes and the quality of bathing water in 2022;17 the FBiH Water Management Strategy (2022-32), aimed at ensuring the sustainable use of freshwater resources; and two water management plans for the preservation of water basins.18 RS also has a Water Management Strategy in force until 2024 and two water management plans.19 Implementation is lagging in both entities, and the RS water strategies monitoring has not been undertaken during the assessed period. According to the 2023 Performance Audit Report on River Protection in the FBiH, only 25% of planned measures for river management for the period 2016‑20 were implemented, and 39% of necessary funds were invested. Widespread inefficiencies of authorities, insufficient financial resources, inadequate planning of pollution prevention measures, and ineffective inspection processes are highlighted as the main obstacles to implementing water measures in both entities. Regarding monitoring water bodies, only RS has an entity-wide water information system, updated yearly with data on water quantity, quality, allocation and water-related risks. The FBiH only collects water data for the Sava River and Adriatic Sea watersheds. A national water information system has yet to be established to systematically monitor the ecological and chemical status of surface and groundwater in Bosnia and Herzegovina.

Bosnia and Herzegovina holds rich biodiversity, harbouring around one-third of flora endemic to the Balkans. Additionally, around half of its territory is covered by forests (42.7% in 2021), slightly above the EU's 39.9% (World Bank, 2023[8]). Nevertheless, pressures due to the conversion of habitats, overexploitation of resources, increased pollution and climate change directly impact Bosnia and Herzegovina’s ecosystems (Convention on Biological Diversity, 2021[9]). Some advances can be noted in Bosnia and Herzegovina’s biodiversity and forestry management frameworks. Both entities have enhanced their legal basis for nature conservation. Despite delays in adopting the FBiH Law on Nature Protection since 2021, the entity adopted several rulebooks about assessing and preserving natural habitats.20 Moreover, RS has prepared the Draft Law on Nature Protection and adopted several bylaws, which prescribe systematic assessment of the state of nature and protection and conservation measures for habitats and species. Nevertheless, efforts are needed to strengthen the forestry legislative framework, particularly in the FBiH. Although the FBiH Law on Forests, submitted to the parliament in 2017, has not been adopted, nine cantons have independently enacted local forestry laws.21 The delay in adopting the entity-wide law hinders effective vertical and horizontal co-ordination between cantons and the state-level ministry. Moreover, the Federal Institute for Nature Protection of the FBiH has not been established as mandated by law, representing a significant obstacle to the entity's advancing efforts. Policy-wise, the state-level (still to be adopted) and both entities’ ESAPs (2022-32) include comprehensive and targeted actions for biodiversity and forestry management, namely improved monitoring, reporting and institutional capacities. Awareness-raising activities on biodiversity protection are also planned as part of both entities’ frameworks. Nevertheless, establishing new protected areas is proceeding slowly, with shares of protected areas remaining minimal in both entities (less than 5%22) and well below international targets.23 While forestry inventories have not been conducted in recent years in either entity, hindering the effective management of natural resources, both entities have established natural protection information systems (“e-nature”) to facilitate systematic biodiversity monitoring within both entities. Moreover, a state-level assessment of ecosystem services (2023) has been conducted in collaboration with international partners to map the current status and trends of biodiversity, emphasise the benefits of natural resources, and identify lingering challenges (World Conservation Monitoring Centre, 2023[10]).

Land use management in Bosnia and Herzegovina remains underdeveloped, although some strides have been made to incorporate land use considerations into policy documents. The Spatial Plan of the FBiH (2008-28), which aimed to establish development plans to outline objectives for developing, protecting, and using land, including protected areas, has never been adopted. While an integrated approach to land use has yet to be established, both entities’ ESAPs envision sustainable land management and protecting land resources. These strategies outline measures to strengthen the legal and institutional frameworks related to land use, aiming to achieve land degradation neutrality by 2030. Specifically, the measures target the sustainable utilisation of natural resources in the agriculture, forestry, and fishing sectors to prevent degradation from excessive exploitation. As part of its ESAP, RS is also planning to develop an action plan for the sustainable use of pesticides in agriculture and forestry. Moreover, legislation concerning changes in agricultural land use, particularly addressing illegal construction, has been reinforced in RS through amendments to the Law on Agricultural Land, adopted in 2021 and 2022. However, the implementation of measures to combat soil erosion, restore degraded land, and curb urban sprawl into green areas has been limited thus far. Furthermore, data on land use remains scarce, and georeferencing and harmonisation across government bodies are lacking.

Sub-dimension 13.4 Depollution

Air quality continues to be a significant concern in Bosnia and Herzegovina, with annual average concentrations of fine particulate matter (PM_2.5) reaching 21.9 micrograms per cubic metre (µg/m³) in 2021, more than four times higher than World Health Organization (WHO)-recommended levels of 5 µg/m³ (EEA, 2023[11]). Moreover, Bosnia and Herzegovina has the fifth-highest mortality rate from air pollution in the world, representing 9% of all deaths in the economy (World Health Organisation, 2023[12]). Air pollution primarily stems from the reliance on lignite for electricity generation, a low-quality polluting type of coal. It is exacerbated during winter months due to the use of coal and wood for heating. While alignment with EU requirements on air quality remains limited,24 advances in the legal framework are ongoing in FBiH, through the planned adoption of the proposed Law on Air Protection at the end of 2024. The Law will establish a unified air quality management system within the entity and regulate emissions from industrial plants. Cross-institution co-ordination within FBiH has been enhanced by establishing a working group to prepare the law. The state and entities' ESAP levels also include air pollution objectives and targets. For instance, RS plans to update the public information system on air quality in real time and develop an emissions reporting mechanism aligned with international standards. In the FBiH, the focus will be on reducing emissions from large combustion plants and alignment with the best available techniques.25 Air quality data management and monitoring were considerably improved at the state level by establishing a comprehensive and harmonised data database with the support of an international project completed in 2021.26 Additional monitoring stations were installed in both entities to widen the coverage of the national air-monitoring network. Moreover, this project strengthened inspection capacity (four new experts were hired) and nationwide awareness-raising campaigns were conducted.27 Other measures have been taken to enhance air quality, including implementing a low emission zones (LEZs) assessment report in Sarajevo, accompanied by a five-year implementation plan. Additionally, recommendations have been developed to promote cycling practices in Banja Luka to reduce vehicle emissions.

Water supply and sanitation remains a challenge in Bosnia and Herzegovina, as around 85% of the population had access to piped water supply but, though improving, only 48% was connected to a sewerage system (World Bank, 2021[13]). Water loss in public systems also remains an important concern, still high at 49% (World Bank, 2021[13]). Both entities report a lack of human and financial capacities to implement water supply and sanitation measures. Both entities have adopted Programmes for the Improvement of Water Services (2022-32) to address these challenges to develop a more sustainable water service sector. These programmes are also the basis for improving the regulatory, institutional and financial framework on water supply and sanitation. In this regard, both entities are preparing changes to the legislation regulating the provision of water services. In RS, the Draft Water Services Law and bylaws are under development, initiated by a newly formed working group in 2022 led by the Ministry of Agriculture, Forestry and Water Management and comprising relevant institutions. The objective of the law is to regulate competencies at the local self-government and utilities levels on managing water supplies, establishing water tariffs, and facilitating contracts for water services. The FBiH has also adopted a new methodology for water service pricing in 2022 to guide sustainable water and sanitation tariffs for public water utilities. A new Law on Water Services is also being prepared with the support of a newly established interdepartmental working group. Funding to upgrade water supply and sanitation infrastructure has been secured, with a notable commitment from the World Bank's EUR 25 million loan for modernising water services, scheduled to commence in 2024.

Activities have been undertaken to develop the framework for industrial risk management further, although it remains underdeveloped. Industrial risk considerations have been integrated into both entities’ ESAPs, including measures to further align with the EU acquis on chemical safety, noise and industrial data collection. While no developments were reported on the legislative side in RS, the FBiH adopted three regulations between 2021 and 2023 to further align with the EU Seveso III Directive on preventing major industrial accidents.28 These regulations delineate specific obligations, such as preparing safety reports and emergency plans, communicating with the public for operators handling hazardous substances that can potentially cause significant accidents, and establishing an electronic register comprising these operators. Regarding chemical management, RS closely aligns with the EU acquis.29 However, in the FBiH, despite adopting the Law on Chemicals in 2020, the absence of corresponding bylaws and a chemical inventory system has impeded effective enforcement. Promisingly, ESAPs from both entities envisage enhanced capacity building for inspection services in chemical safety. The development of the Pollutant Release and Transfer Register (PRTR) system to track the release and transfer of pollutants from industrial facilities into the environment is ongoing at all levels of government as part of an international project.30 The project’s activities encompass several key components, including evaluating the current status of environmental data sourced from industrial facilities. Additionally, it involves supporting the ratification of the PRTR Protocol, establishing a network tool dedicated to PRTR reporting, and facilitating capacity-building initiatives across institutional, operational, and civil society levels. A general policy basis for soil protection does not exist at the state or entity levels, but activities for the cleanup of contaminated sites are envisaged in both entities’ ESAPs. For instance, RS aims to rehabilitate at least 50% of noncompliant landfills by 2032, and the FBiH foresees the reconversion of abandoned mining areas.

Overview of implementation of Competitiveness Outlook 2021 recommendations

Bosnia and Herzegovina’s progress in implementing past CO Recommendations has been mixed. Below, Table 14.2 shows the economy’s progress in implementing past recommendations for environment policy.

Table 14.2. Bosnia and Herzegovina’s progress on past recommendations for environment policy

Competitiveness Outlook 2021 recommendations	Progress status	Level of progress
Improve the wastewater system by replacing the outdated water and sanitation infrastructure and apply the water-user and polluter-pays principles for all water users and dischargers	Currently, only around half of the population in BiH is connected to the sewerage system, which remains outdated. Nevertheless, both entities are preparing changes to the legislation regulating the provision of water services. Respective programmes for the Improvement of Water Services were adopted at the entity level to develop a more sustainable water service sector in BiH. There are also several ongoing loans for water supply and sanitation infrastructure.	Moderate
Enhance air quality by reducing emissions from the transport sector, industry and domestic heating	The entity-level environmental strategies include clear objectives and targets for improving air quality. The first-ever comprehensive and harmonised data management database was established and additional monitoring stations were installed. Several programmes were implemented to increase air quality throughout BiH. Over the past ten years, population exposure to PM2.5 has been reduced but remains well above WHO-recommended levels.	Moderate

The way forward for environment policy

While Bosnia and Herzegovina 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:

• Strengthen collaboration among relevant stakeholders and partnerships between public and private organisations to ensure a transition to a circular economy. While Bosnia and Herzegovina has commenced the process of developing a circular economy, promoting intersectoral, cross-agency, and interdepartmental collaboration would help scale up innovative circular business models, as the circular economy concept cuts across economic sectors and value chains as well as the competencies of public authorities. Bosnia and Herzegovina could establish a circular economy stakeholder/business platform to strengthen collaboration, information exchange and the exchange of good practices. Besides enabling collaboration and networking opportunities between the public and private sectors, such platforms may also facilitate synergies and knowledge sharing across the different parts of the value chain. Most European countries have established national circular economy stakeholder platforms or hubs, which serve as fora for information exchange; peer learning; multi-stakeholder co-operation; and a depository of information, data and other relevant material (see Box 14.1 for a few examples).

Box 14.1. Examples of circular economy platforms/hubs

• Slovak Circular Economy Platform (Circular Slovak Republic) – established in the form of a public-private partnership by the Slovak Ministry of Environment, the Embassy of the Kingdom of the Netherlands, the Institute for Circular Economy, PwC Slovak Republic, the Slovak Business Agency and the Slovak Environment Agency in 2019. Its primary goals are to promote circular economy to businesses as an approach that provides economic benefits and opportunities, exchange, information and experience; to help build business partnerships and new projects; to inform businesses about the latest legislation in the area; and to support their participation in the policy-making process. The platform also helps increase discussion among the public and private sectors and businesses.

• Circular Glasgow – hosted since 2015 by the Glasgow Chamber of Commerce, Zero Waste Scotland and the Glasgow City Council (United Kingdom). Circular Glasgow aims to build best practices and capacity on the circular economy across Glasgow businesses, helping them identify opportunities to support and implement circular ideas. This is done through workshops and events – a series of knowledge-sharing business-to-business networking events; a circle assessment – a tool that helps businesses understand opportunities to become more circular; and the Circle Lab – an online hackathon event to find a circular solution to local challenges.

• The Italian Circular Economy Stakeholder Platform – established in 2018 by the National Agency for New Technologies, Energy and Sustainable Economic Development, as a mirror initiative of the European Circular Economy Stakeholder Platform. It acts through six working groups: 1) research and eco-innovation; 2) policy and governance; 3) measuring the circular economy; 4) sustainable and circular design, production, distribution and consumption; 5) cities and territory; and 6) good practices. The platform aims to foster synergies among relevant stakeholders, overcome the fragmentation of initiatives at the Italian level, map good practices, and promote the Italian way of the circular economy at the national and international levels.

• Turkey Circular Economy Platform – established in 2020 by the Business Council for Sustainable Development of Türkiye. The platform aims to provide practical solutions, incentives, news and opportunities in the circular economy field. It includes a knowledge hub, an e-commerce platform for industrial symbiosis (as part of Türkiye Materials Marketplace, established in 2016) and measurement tools. It offers training, financial opportunities, and consultancy services for companies looking to accelerate their circular transition.

  Sources: OECD (2021[14]; 2024[15]).

• Ensure that the implementation of waste management measures is planned as part of both entities’ Environment Strategy and Action Plans. While implementing waste measures has remained limited in the assessed period, both entities have adopted environmental strategies to reduce waste generation, increase recycling levels and reduce landfilling. Moreover, RS revised its waste management law to include waste recycling targets. 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, both entities should enforce extended producer responsibility programmes prescribed in both waste laws. To do so, entities can follow the guiding principles in Box 14.2.

Box 14.2. Guidance on implementing extended producer responsibility take-back schemes

OECD EPR Guidance

To effectively implement extended producer responsibility (EPR) take-back schemes to shift the 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 the application of the following principles (the selection is based on the OECD EPR Guidance):

• Clear legal framework: The legislation should 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 economy, 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 free-riding 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 use the EPR Toolbox developed by Prevent Waste Alliance, consult on other international practices, and participate in knowledge exchange 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 integrating the informal sector or creating a market for recycled plastics.

Data collection and processing for EPR schemes, for 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. Czechia’s electronic registry for waste is an exemplary model of 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). At the same time, 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 developing and implementing evidence-based waste management policies.

Sources: OECD (2016[16]); Prevent Waste Alliance (2023[17]);Tuscano et al. (2022[18]).

• Improve air quality by decreasing emissions from energy production and industrial processes. Air pollution remains a significant environmental concern in Bosnia and Herzegovina. While the problem is multifaceted, industrial activities (in particular steelmaking and aluminium) and energy production are some of the main sources of pollution in the economy, releasing large amounts of pollutants into the air. To ensure adequate pollution control measures in industries and power plants and reduce levels of harmful substances, Bosnia and Herzegovina could refer to the EU's Best Available Techniques Reference Documents to ensure effective enforcement and regulatory compliance (Box 14.3).

Box 14.3. EU’s Best Available Techniques Reference Documents

The EU’s BREFs, or Best Available Techniques Reference Documents, are a series of guidance documents developed by the European Integrated Pollution Prevention and Control Bureau (EIPPCB). These documents provide detailed information on Best Available Techniques (BAT) in various industrial sectors to prevent or reduce emissions and the impact of industrial activities on the environment. The BREFs are integral to the European Union's efforts to regulate industrial emissions and ensure environmental protection.

Key points about the EU's BREF documents:

• Best Available Techniques (BAT) – BAT represents the most effective and advanced methods and processes to achieve a high level of environmental protection. It considers the costs and benefits of different techniques for preventing or controlling emissions.

• Sector-Specific Guidance – The BREF documents are sector-specific, covering various industries such as energy, chemicals, metals, waste management, and more. Each BREF focuses on a particular industrial sector and provides comprehensive information on the best practices within that sector.

• Legal Framework – The BREFs play a crucial role in the implementation of the Industrial Emissions Directive (2010/75/EU), formerly known as the Integrated Pollution Prevention and Control (IPPC) Directive. This directive sets the legal framework for controlling industrial emissions across the EU.

• Review and Updating – The BREF documents undergo regular reviews and updates to incorporate new technological advancements, changes in regulations, and improvements in best practices. The process involves consultations with industry stakeholders, environmental NGOs, and experts.

Source: EEA (2024[19]).

• Adopt a comprehensive and integrated water management framework in light of the pressing challenges posed by water pollution and the impacts of climate change. Bosnia and Herzegovina’s freshwater resources face increased pollution caused by industrial discharges, improper waste disposal and plastic pollution. Wastewater is largely treated and often discharged in river basins. Moreover, increased droughts and floods caused by the changing climate have significant effects on water security and bring high levels of uncertainty related to its impacts on water bodies on a local level and over different timescales. An integrated framework will require enhanced collaboration among the various government departments and agencies involved in water management, pollution control, and climate resilience. In addressing the integration of climate change impacts into water management, entities could adopt a similar approach to the Netherlands Room for the River programme, a large-scale, integrated water management initiative to mitigate flood risks and enhance overall river management. It involves creating additional space for the river to expand during floods, along with measures such as constructing floodplains, removing barriers, and promoting sustainable land use to enhance overall water resilience. Moreover, it emphasises community involvement to create awareness, garner support, and incorporate local knowledge into the planning and implementation process (Ministry of Infrastructure and Water Management, 2024[20]).

References

[9] Convention on Biological Diversity (2021), Bosnia and Herzegovina - Biodiversity facts, https://www.cbd.int/countries/profile/?country=ba#:~:text=Biodiversity%20Facts&text=Thirty%20percent%20(around%201%2C800%20species,fauna%2C%20fungi%20and%20habitat%20types. (accessed on 31 January 2024).

[19] EEA (2024), EU Best Available Techniques Reference Documents, https://www.eea.europa.eu/themes/air/links/guidance-and-tools/eu-best-available-technology-reference. (accessed on 14 December 2023).

[11] EEA (2023), Bosnia and Herzegovina – Air Pollution Country Fact Sheet, https://www.eea.europa.eu/themes/air/country-fact-sheets/2023-country-fact-sheets/bosnia-and-herzegovina-air (accessed on 9 February 2024).

[4] EEA (2021), Municipal Waste Management - Bosnia and Herzegovina, https://www.eea.europa.eu/themes/waste/waste-management/municipal-waste-management-country-profiles/bosnia-and-herzegovina-municipal-waste#:~:text=In%20Bosnia%20and%20Herzegovina%2C%20around,several%20others%20are%20being%20planned. (accessed on 14 June 2024).

[22] European Commission (2023), European Innovation Scoreboard, http://op.europa.eu/en/web/eu-law-and-publications/publication-detail/-/publication/04797497-25de-11ee-a2d3-01aa75ed71a1.

[3] Eurostat (2022), Material Flow Accounts, https://ec.europa.eu/eurostat/databrowser/view/ENV_AC_MFA/default/table?lang=en (accessed on 1 March 2024).

[5] Government of Republika Srpska (2022), Environmental Strategy of Republika Srpska 2022‒ 2032, Official Gazette of the Republika Srpska, number 118/22, https://www.vladars.net/sr-SP-Cyrl/Vlada/Ministarstva/mgr/Documents/ENVIRONMENTAL%20STRATEGY%20OF%20REPUBLIKA%20SRPSKA%202022%20to%202032_462217192.pdf.

[20] Ministry of Infrastructure and Water Management (2024), Room for the River, https://www.rijkswaterstaat.nl/en/projects/iconic-structures/room-for-the-river (accessed on 2 February 2024).

[15] OECD (2024), A Roadmap Towards Circular Economy of North Macedonia, OECD Publishing, Paris, https://doi.org/10.1787/1973c88c-en.

[14] OECD (2021), Digital Trade Inventory, https://doi.org/10.1787/9a9821e0-en.

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

[17] PREVENT WASTE Alliance (2023), EPR Toolbox, GIZ, Bonn, Germany, https://prevent-waste.net/epr-toolbox.

[21] RCC (2021), Balkan Barometer, Regional Cooperation Council, https://www.rcc.int/balkanbarometer/publications.

[18] Tuscano, J. et al. (2022), Electronic Registries for Waste Across Europe, https://www.eionet.europa.eu/etcs/etc-ce/products/etc-ce-products/etc-ce-report-3-2022-electronic-registries-for-waste-across-europe.

[7] UN Water (2023), SDG 6 Data - Bosnia and Herzegovina, https://www.sdg6data.org/en/country-or-area/Bosnia%20and%20Herzegovina) (accessed on 26 February 2024).

[23] UNDP (2024), Climate Promise: Bosnia and Herzegovina, https://climatepromise.undp.org/what-we-do/where-we-work/bosnia-and-herzegovina (accessed on 10 May 2024).

[1] UNFCCC (2021), Fourth National Communication of Bosnia and Herzegovina, GEF, UNDP, https://unfccc.int/sites/default/files/resource/FNC%20BiH_ENG%20fin.pdf.

[2] UNFCCC (2021), Nationally Determined Contribution of Bosnia and Herzegovina for the period 2020-2030, https://unfccc.int/NDCREG.

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

[6] World Bank (2023), Renewable Internal Freshwater Resources per Capita (Cubic Meters), https://data.worldbank.org/indicator/ER.H2O.INTR.PC (accessed on 2 February 2024).

[13] World Bank (2021), BiH Water and Sanitation Services Modernization Project, https://documents1.worldbank.org/curated/en/363801641931370816/pdf/Bosnia-and-Herzegovina-Water-and-Sanitation-Services-Modernization-Project.pdf.

[10] World Conservation Monitoring Centre (2023), Assessment of the State of Nature and Management of Natural Resources, https://www.procjenaprirode.ba/wp-content/uploads/2023/06/koristi-od-prirode-u-bih.pdf.

[12] World Health Organisation (2023), World Health Statistics 2023 - Monitoring health for the SDGs, World Health Organisation, Geneva, https://www.who.int/data/gho/publications/world-health-statistics (accessed on 1 March 2024).

Notes

← 1.  Bosnia and Herzegovina’s share of global GHG emissions is 0.05%, according to the World Resources Institute (UNDP, 2024[23]).

← 2.  Floods in 2009, 2010, 2014, 2018 and 2019, drought and heat waves in 2011, 2012, 2013, 2015, 2016 and 2017, cold waves in early 2012, strong wind in mid-2012 and late 2017, and an extremely large number of hail days in 2018.

← 3.  50% reduction of GHG emissions by 2050 compared to 2014 levels.

← 4.  Key measures encompass various initiatives, such as evaluating the contributions of private sector endeavours, forecasting GHG emissions and removals, monitoring and evaluating NDC, engaging in policy dialogues with the participation of all segments of society, and conducting training and capacity-building activities.

← 5.  In Bosnia and Herzegovina, environmental policies are managed by the two entities – the FBiH and RS – and the Brčko District, all of which apply laws, regulations, and standards. The Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina is tasked with defining policy, establishing basic principles, co‑ordinating activities, and harmonising plans among entity authorities and institutions at the international level. Plans specifically relate to the fields of agriculture, energy, environment, development and use of natural resources, and tourism. Competent institutions at the entity level include the FBiH Ministry of Environment and Tourism; the Ministry of Spatial Planning, Civil Engineering and Ecology of RS; and the Department of Spatial Planning and Property Legal Affairs in the Brčko District.

← 6.  Such activities have been organised as part of the Capacity-building Initiative for Transparency (CBIT) project, financed by the GEF (2020-24), aiming at supporting BiH’s National Adaptation Plan, Fourth National Communication and Third Biennial report. Workshops and conferences were carried out.

← 7.  The targets are as follows:

• Reduction of GHG emissions compared to 1990, including sinks: 41.21%

• Share of renewable energy sources in gross final energy consumption: 43.62%

• Energy efficiency - Primary energy consumption: 6.84 mega tonnes of oil equivalent (Mtoe)

• Energy efficiency - Final energy consumption: 4.34 Mtoe.

← 8.  A carbon pricing mechanism, ideally an ETS in all economies, will be crucial to cope with the impacts of the EU’s Carbon Border Adjustment Mechanism (CBAM) on high-carbon exports. The CBAM is expected to become operational in 2026 and gradually apply to a select number of goods with a high risk of carbon leakage (iron and steel, cement, fertiliser, aluminium, and electricity generation). As EU importers will buy carbon certificates corresponding to the carbon price that would have been paid had the goods been produced under the European Union’s carbon pricing rules, non-EU producers such as the WB6 economies will be encouraged to green their processes and lower production-related emissions.

← 9.  The programme outlines business transformation support aimed at assisting a minimum of 100 companies operating within sectors of metal, wood, textile, construction, and plastics. The incentives provided are intended to foster circularity practices and facilitate preparation for green financial support.

← 10.  As part of the project "Supporting energy transition in coal-rich regions".

← 11.  The Sustainable Transition of Bosnia and Herzegovina programme was launched in 2023 and is implemented by the Stockholm Environment Institute (SEI), in collaboration with the Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina (MoFTER), the Swedish International Development Cooperation Agency (Sida) and four local self-government units – Banovići, Breza, Ugljevik and Živinice.

← 12.  Standard Operating Procedures (SOPs) are documented guidelines or instructions that outline the steps and processes to be followed for routine or repetitive tasks. SOPs are developed to ensure consistency, efficiency, and compliance with established standards or regulations.

← 13.  To address this, the Public Procurement Agency of Bosnia and Herzegovina, with technical assistance from the UNDP and the Delegation of the EU, has initiated the development of the Public Procurement Development Strategy 2024-28. This new strategy will prioritise the introduction of Green and Socially Responsible Public Procurement as one of its strategic priorities.

← 14.  No fee has to be paid in non-sanitary landfills, and only around one-third of the waste is disposed of in sanitary landfills.

← 15.  Extended producer responsibility (EPR) schemes are regulatory policies that assign the responsibility for the end-of-life disposal of products to the manufacturers, encouraging them to design products that are easier to reuse, recycle, or dispose of properly.

Both entities have EPR schemes in place for packaging waste and waste electrical and electronic equipment (WEEE). RS also has EPR schemes in place for waste tires, end of life vehicles, waste mineral and synthetic oils as well as carrier plastic bags.

← 16.  Rulebook on the management of waste from electrical and electronic products (2023), as published in the Official Gazette of the Federation of BiH, number 23/23; and the Rulebook on electrical waste management and electronic products (2023), as published in the Official Gazette of the Republic of Srpska, number 36.

← 17.  The Ordinance of Determination of the Ecologically Acceptable Flow and the Ordinance of Issuing the Water Acts/Permits were both amended in August 2022, and the new Ordinance on Bathing Areas and Criteria for Determining the Quality of Bathing Water was adopted in 2022, transposing the Bathing Water Directive (2006/7/EC).

← 18.  Water Management Plan for Water Area of the Sava River in the Federation of Bosnia and Herzegovina 2022-27, and Water Management Plan for Water Area of the Adriatic Sea in the Federation of Bosnia and Herzegovina 2022-27.

← 19.  Sava/Danube and Trebišnjica/Adriatic Sea.

← 20.  Rulebook on conditions and methods of establishing and managing the cadastre of speleological objects (2021); Rulebook on ways, methods and technical means that least interfere with wild species/subspecies or the habitats of their populations, and on limiting encroachment into the habitats of populations of animal species in the time that coincides with their vital periods (2021); Rulebook on the prohibition of the use of means and methods for killing birds and hunting from vehicles (2022); Rulebook on the prohibition of the use of means for catching or killing wild species and methods of transportation (2022); Rulebook on conditions and methods of cross-border trade with endangered species of wild animals and plants in the Federation of Bosnia and Herzegovina (2022).

← 21.  All cantons except for Herzegovina-Neretva.

← 22.  Protected terrestrial and marine areas made up 4.1% of the total area of Bosnia and Herzegovina in 2022, a negligible increase from 4% in 2021 (RCC, 2021[21]). The share of protected terrestrial areas was 2.96% in RS and 4.7% in the FBiH.

← 23.  The Aichi targets for 2020 aimed to achieve 17% coverage for terrestrial protected areas and 10% for marine protected areas, and the Kunming-Montreal Global Biodiversity Framework envisages the protection of 30% of terrestrial and marine environments.

← 24.  In particular with regard to the EU Directive on the reduction of national emissions of certain atmospheric pollutants, the acquis on volatile organic compounds (VOC), and the acquis on reducing the sulphur content of certain liquid fuels, on which penalties have been applied since January 2021 (European Commission, 2023[22]).

← 25.  “Best available techniques” (BATs) refer to the most effective and advanced methods for preventing or minimising emissions and environmental impacts. BATs are employed to achieve a high level of environmental protection and are often used as a regulatory concept in environmental legislation.

← 26. The Swedish Environmental Protection Agency implemented the Improving Air Quality and Air Management (IMPAQ) Programme 2017-2021.

← 27.  These campaigns included billboard ads, flyers at health centres, targeted messaging through news outlets on TV and radio, and a public website publishing real-time air quality data collected from monitoring stations.

← 28.  The Seveso III Directive (Directive 2012/18/EU) on controlling major-accident hazards involving dangerous substances provides the relevant framework for risk management measures to prevent major accidents and limit their consequences.

← 29.  REACH (Registration, Evaluation, Authorisation, and Restriction of Chemicals) Regulation, CLP (Classification, Labelling, and Packaging of Substances and Mixtures) Regulation, and Biocidal Products Regulation.

← 30.  “Improvement of registers of discharge and transfer of polluting substances (PRTR) in the countries of the Western Balkans and the Republic of Moldova’’, which is implemented by the Federal Ministry of Environment, Nature Conservation and Nuclear Safety of Germany and the German Federal Environment Agency. Beneficiaries include MOFTER, the Federal Ministry of Environment and Tourism, the Ministry of Spatial Planning, Construction and Environmental Protection of the Republic of Srpska, and the Brčko District Department.