North Macedonia
Country profile
North Macedonia is a landlocked country with a rugged landscape of mountains, valleys, and fertile plains. The Vardar River and Lake Ohrid are key geographical features. It experiences a mix of Mediterranean and continental climates and faces environmental issues like air pollution, deforestation, and water management challenges. The country has coal, copper, and iron ore deposits, with hydroelectric power being a key energy source, alongside growing interest in solar and wind energy.
Opportunities
North Macedonia’s potential lies in expanding its renewable energy sector, particularly solar and wind power, given its favorable climate conditions. Carbon projects in energy efficiency for industries and residential areas could also play a crucial role. Additionally, improving forest management and promoting reforestation in rural areas offer carbon sequestration opportunities, further helping the country reduce emissions.
Challenges
North Macedonia’s carbon project challenges include outdated energy infrastructure and a slow transition away from fossil fuels, particularly in the heating sector. The country also faces issues with air pollution and inefficient energy use in urban areas. Political instability and a lack of investment in the renewable energy sector create additional barriers to scaling carbon projects, while rural areas may lack the resources and expertise needed for effective reforestation and forest management.
- North Macedonia is working towards aligning its energy policies with the EU's green agenda, focusing on decarbonizing its energy sector and enhancing regional energy cooperation. The country faces challenges in meeting the stringent requirements set by the EU for funding and integration, including necessary reforms in the rule of law and governance.
- North Macedonia is heavily dependent on coal, with two main coal-fired power plants, Bitola and Oslomeij, contributing significantly to pollution. The transition away from coal is supported by significant international funding, including an $85 million investment plan from the Climate Investment Funds to phase out coal by 2030 and develop renewable energy sources. The country has significant untapped potential for renewable energy, particularly in solar and wind power. Studies indicate that North Macedonia could develop up to 11 GW of solar PV capacity and 0.35 GW of wind capacity without impacting critical natural habitats, especially interesting since 40% of the country’s land is covered by forests. This renewable energy potential far exceeds the country’s current electricity consumption and could support future energy needs under energy-efficient scenarios.
Key figures
reduction of GHG emissions from 1990 levels by 2030 pledged as part of the country’s NCEP
of coal power generation capacity to be retired by 2030
policies and measures aimed at decarbonization in the country’s NDCs
Key focus areas
North Macedonia should prioritize expanding its renewable energy portfolio, focusing on solar and wind power due to its favorable climate conditions. Energy efficiency projects in urban areas and industries can also contribute significantly to emissions reductions. Reforestation and improved forest management should be a key focus in rural areas to increase carbon sequestration, coupled with policy and regulatory reforms to attract green investments.
- North Macedonia’s climate actions are supported by various international organizations, including the UNDP, the European Union, and the World Bank. These partnerships help the country develop and implement climate policies, enhance energy efficiency, and promote renewable energy investments.
- The European Bank for Reconstruction and Development (EBRD) and other international financial institutions are expected to co-finance significant portions of North Macedonia’s green transition projects.
Notable Initiatives
- North Macedonia’s government has been actively promoting renewable energy through various policies and incentives, such as the Energy Development Strategy, making it an attractive destination for foreign investments in wind power projects. These incentives likely include favorable regulatory frameworks, tax benefits, and guaranteed purchase agreements for the electricity generated.
- The collaboration with the London-based carbon asset manager Carbonaires aims to establish robust Voluntary Carbon Markets (VCMs) in the country. This partnership aims to create a comprehensive regulatory framework and implement high-integrity carbon offset projects, such as afforestation and biochar production, driving green investment and job creation while enhancing air quality.
- The Just Transition platform, backed by the EBRD. focuses on phasing out coal by 2030, deploying 1.7 GW of renewable energy, and investing in grid infrastructure to ensure energy security. It also includes measures to support communities affected by the transition.
