NewsEconomic transformation in Montenegro's coal-reliant regions

Economic transformation in Montenegro’s coal-reliant regions

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The economic transformation required by energy transition in regions heavily reliant on coal industries was emphasized by Diana Milev Čavor, the coordinator of the Climate and Energy Program at the non-governmental organization (NGO) Eko-tim.

As reported by Media Biro, a conference titled “Energy Transition in Montenegro: Achievements, Vision, and Prospects of a Sustainable Energy Future in Montenegro” took place yesterday in Podgorica, organized by the NGO Eko-tim.

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The conference focused on analyzing and discussing key aspects of energy transition, with particular attention given to the impact of carbon dioxide levies and the implementation of the Carbon Border Adjustment Mechanism (CBAM) on Montenegro’s energy sector.

Diana Milev Čavor highlighted that energy transition has predominantly been discussed in terms of international obligations, treaties, and EU integration. However, she drew attention to other aspects of the transition with less formal but more tangible and realistic impacts. She emphasized the significance of the CO2 Emissions Trading System as a mechanism affecting the economic viability of coal-fired power plants.

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Under the current regulatory framework, Montenegro is obligated to pay €24 per ton of CO2 emitted by the Pljevlja Thermal Power Plant. This price is significantly higher in the EU. Considering the European Commission’s interest in forming a unified energy market, emphasis is placed on harmonizing the EU ETS with national carbon taxation systems. By 2030, countries in the region must synchronize and define a price equivalent to the ETS market price. This will have significant repercussions, primarily reflected in higher electricity prices for citizens.

Such energy transition would necessitate an economic transformation in regions heavily dependent on coal industries. The complexity of this process lies primarily in economic challenges, including potential job losses and reduced employment. Mining activities are deeply ingrained in the tradition and cultural heritage of mining communities, so transition challenges evoke resistance from local communities fearing job losses.

To address these challenges, it is essential to identify economic sectors with development potential in Pljevlja municipality. Defining activities with a timeframe and estimating financial resources needed for realization are crucial steps.

State Secretary of the Ministry of Energy and Mining, Biljana Ivanović, highlighted the state’s support for activities aimed at mitigating climate change, achieving economic development, and protecting the environment.

The challenges facing Montenegro were further discussed in panel discussions, bringing together experts, decision-makers, representatives of civil society, and the business community to explore opportunities and challenges brought by energy transition.

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