Montenegro
Country profile
Montenegro is a small, mountainous country along the Adriatic Sea with diverse landscapes, including rugged peaks and scenic coastal areas. It has a Mediterranean climate on the coast and continental weather inland. While the country has made strides in environmental protection, challenges remain in areas like deforestation and water pollution. Montenegro’s natural resources include bauxite and hydroelectric power potential, with tourism and renewable energy playing a key role in its economy.
Opportunities
Montenegro, with its significant hydropower capacity and focus on renewable energy, has strong opportunities for carbon projects. Expanding solar and wind energy, especially in its coastal areas, could provide substantial emission reductions. Reforestation and sustainable forest management, given Montenegro’s rich natural landscapes, offer additional carbon offsetting possibilities, while eco-tourism initiatives could be integrated into carbon-neutral development strategies.
Challenges
Montenegro, despite its small size, struggles with limited financial resources and technical capacity to expand its renewable energy infrastructure, particularly in wind and solar. The country’s reliance on tourism can also conflict with sustainable land-use practices, as rapid development may lead to environmental degradation. Additionally, poor enforcement of environmental laws and the need for stronger institutional frameworks make it difficult to scale up carbon offset projects like reforestation and eco-tourism initiatives.
Montenegro faces challenges in aligning with the EU's green agenda due to its existing energy infrastructure and economic conditions. Despite these obstacles, Montenegro remains committed to regional cooperation and implementing the necessary reforms to progress towards decarbonization and sustainable development.
Key figures
Western Balkans country to establish an Emissions Trading System (ETS)
of GHG emissions reduction by 2030 compared to 1990 levels, as part of their commitment under the Paris Agreement
mitigation measures, with 14 focused on the energy sector which is the highest contributor to GHG emissions
Key focus areas
Montenegro’s focus areas include increasing its renewable energy capacity, particularly through wind and solar energy projects, while maintaining its leadership in hydropower. Sustainable tourism that integrates carbon neutrality and reforestation should also be a priority. Protecting its natural forests and expanding reforestation initiatives will enhance carbon sequestration, while improving environmental law enforcement will support these efforts.
Montenegro has been an EU candidate country since 2010. It is required to bring its environmental and climate policy in line with the EU as part of accession talks that began in late 2018. Establishing a national ETS is a requirement to ensure that Montenegro has the climate policy framework in place to take part in the EU ETS should it join the EU
Notable Initiatives
- In December 2019, Montenegro’s “Law on Protection from the Negative Impacts of Climate Change” came into force, mandating climate policies like a GHG inventory, a low-carbon strategy, and a national MRV system, while also establishing a legal basis for a national ETS for the industrial and power sectors.
- Montenegro has set a precedent in the Western Balkans by being the first to establish an Emissions Trading System (ETS), demonstrating its commitment to combating climate change and aligning with EU standards. This move aims to reduce emissions, promote green technology investment, and serve as a benchmark for neighboring countries.
- The ETS began in February 2020, covering the Pljevlja coal plant, KAP aluminum plant, and Tosčelik steel mill. Entities must surrender allowances for emissions, allocated via auctions or for free. In 2020-2021, 100% of allowances were free, while 64% were auctioned in 2022.
