Tackling road vehicle emissions in the Western Balkans

On a cold morning in Sarajevo, 10-year-old Emina walks to school, wearing a mask to protect her lungs from the smog. Like many children in the region, she navigates air quality challenges that often limit her outdoor activities. Emissions from transport and heating are major contributors to this problem. 

As economies in the Western Balkans grow, so does personal mobility and freight transport, with more trips and increased vehicle ownership. From 2012 to 2023, passenger car ownership across the region jumped by 55%, and the trend is expected to grow.

How can the Western Balkans build healthier communities and increase productivity in a region that is home to some of Europe’s most polluted cities? For kids like Emina, their future depends on the choices governments make in their transportation policies.

There are three key areas for action that the Western Balkans can consider to manage their road vehicle emissions:

1. Balance budgetary goals with environmental goals through vehicle and fuel taxation reforms. One key approach is differentiating taxes on vehicle purchases or first-registrations based on environmental performance to encourage consumers to choose less-polluting vehicles. 

   In Albania, Bosnia and Herzegovina, and Montenegro, vehicle first-registration taxes remain flat and disconnected from emissions, and are often minimal, while Kosovo and Serbia lack such measures entirely. However, North Macedonia took a significant step in 2020 by introducing a registration tax strongly tied to emissions and applicable also to secondhand imports. Regarding annual circulation taxes (recurring), while some degree of emissions-differentiation is included in most of the Western Balkans, these are currently too low to effectively influence consumer choices. 

   Raising fossil fuel taxes—through excise duties, VAT, or carbon pricing— can have a significant impact on consumer behavior, not just in what kind of car they buy, but also in how much they actually drive. To address equity concerns of increasing fuel taxation and ensure fairness, it’s important to consider redistributive measures, including investing in more sustainable transport modes (e.g., public transport, active mobility and rail).

    

2. Amplify the impact of pricing and tax reforms with regulatory measures. Regulations on energy efficiency and on local pollutants for new and secondhand vehicle imports are important. Adopting Euro 6/VI standards, which set strict limits on carbon monoxide, nitrogen oxides, and particulate matter emissions, will significantly improve urban air quality. In addition, expanding regulations covering CO₂ emissions could further increase environmental and energy-efficiency benefits. 

   Just as important is improving governance and enforcing roadworthiness and technical inspections, so that the Western Balkans can effectively monitor emissions from secondhand vehicles, which make up over 80% of passenger car imports in the region.

    

   

3. Accelerate e-mobility rollout. While improving internal combustion engine efficiency, the Western Balkans can also promote electric vehicles (EVs). A strategic starting point is prioritizing the electrification of highly utilized vehicles, such as buses, taxis, and urban delivery fleets. These vehicles can quickly recover the higher upfront costs of EVs through lower operating expenses while also stimulating demand for charging infrastructure and vehicular purchase.

Tirana, the capital of Albania, has encouraged EV adoption by offering specially designed EV taxi licenses. This has driven private investment in charging stations.

It’s also important to improve governance and policy frameworks to increase private and publicly accessible EV infrastructure. This can include technical standardization, facilitating charging point licensing for fleet interoperability, and setting clear targets for public and private charging infrastructure.

To learn more about opportunities for the Western Balkans to contribute to improving road vehicle environmental performance, check out our “Policies to Improve the Environmental Performance of Road Vehicles in the Western Balkans” report. It includes a case study on how this approach was successfully applied by the government of North Macedonia for policy reform.

Related

Transport Inputs to the Western Balkans Green Growth Narrative: Strategic Actions for a Greener and More Efficient Transport Sector - Policy Note

The Economics of E-Mobility for Passenger Transportation