Driving Change: Western Balkans Pave the Way for Green Transport Revolution

The Western Balkans are addressing the environmental impact of their transport sector with a dual approach, improving internal combustion engine vehicles and transitioning to e-mobility. A recent World Bank report, "Policies to Improve the Environmental Performance of Road Vehicles in the Western Balkans," outlines essential policies, including taxation reforms, regulatory requirements, and infrastructure development, to mitigate emissions and promote sustainability. Tailored, country-specific pathways and international cooperation are crucial for success.

The Western Balkans are at a crucial juncture, balancing economic growth with the urgent need to reduce the environmental impact of their expanding transport sector. Transport currently accounts for 15% of the region's greenhouse gas (GHG) emissions, mostly from road vehicles. High energy consumption, air pollution, and dependence on fossil fuel imports pose significant risks to both public health and economic stability.

In response to these challenges, the World Bank recently published a report titled "Policies to Improve the Environmental Performance of Road Vehicles in the Western Balkans." This report outlines a comprehensive strategy aimed at tackling these issues head-on. The proposed approach focuses on improving the environmental performance of internal combustion engine vehicles (ICEVs) and preparing the region for a shift towards electric vehicles (EVs) and the necessary supporting infrastructure.

Tackling Emissions and Energy Consumption

Road transport is a major driver of energy use and emissions in the Western Balkans. As car ownership increases alongside economic growth, emissions are set to rise unless effective policies are implemented. The report identifies several critical tools to address this, including regulatory requirements, vehicle and fuel taxation reforms, and specific policies to support the rollout of e-mobility.

The current trend of increasing emissions due to rising car ownership and economic growth underscores the need for immediate policy interventions. The report emphasizes the importance of a mix of regulatory requirements, taxation reforms, and dedicated policies to promote e-mobility. It also stresses that these policies must account for the region's economic constraints and ensure social equity to guarantee widespread adoption and effectiveness.

Policy Recommendations

To create meaningful impact, the report recommends differentiated taxation based on environmental performance. North Macedonia serves as a prime example with its CO2 emissions-based vehicle tax, which has led to significant emission reductions and increased tax revenues. Additionally, the report suggests increasing fuel taxes to influence both new vehicle purchases and existing fleet usage. However, these reforms should align with the EU Energy Taxation Directive and consider the economic realities of the region.

Stricter regulations on energy efficiency, CO2 emissions, and local pollutants are also essential. The report advocates for enhanced roadworthiness and technical inspections to ensure compliance. If enforced rigorously, these measures can significantly improve the environmental performance of vehicles in the region.

Accelerating E-Mobility

The transition to e-mobility is a cornerstone of the proposed policy changes. Early adoption policies for highly utilized vehicles, such as buses and taxis, are critical. The report calls for comprehensive frameworks for EV charging infrastructure, ensuring the necessary support for a widespread e-mobility rollout. Effective governance and stringent enforcement of vehicle inspections are crucial for the success of these policies. The report highlights the importance of regional and international cooperation to support policy implementation and enhance environmental outcomes.

Road Ahead

The report underscores the need for tailored, country-specific transition pathways. Each Western Balkan country must consider its unique market dynamics, equity and economic implications, and political landscape. A coordinated regional approach, aligned with EU regulations, is crucial to maximize environmental benefits and expedite regulatory convergence within the region.

International stakeholders play a pivotal role in increasing ambition and accelerating the green growth agenda. Key players include the Transport Community Permanent Secretariat, the Energy Community, and the EU. Their support is vital for aligning Western Balkan legislation with the European policy framework and facilitating the transition towards sustainable transport.

As the Western Balkans embark on this transformative journey, the World Bank stands ready to provide knowledge and technical assistance, helping design and implement effective road vehicle decarbonization and e-mobility policies. With a collective effort, the region can achieve significant environmental, economic, and social gains, paving the way for a sustainable future.