Environmental country reviews

OECD Environmental Performance Reviews: Slovenia 2012 Assessment and Recommendations

 

         Slovenia                                                       

The OECD Working Party on Environmental Performance discussed the draft Environmental Performance Review of Slovenia at its meeting on 18 January 2012 in Paris, and approved these assessment and recommendations (PDF version). 36 recommendations are presented on how Slovenia's performance could be improved.

 

 

Assessment

 

Slovenia’s Development Strategy (SDS) for 2005-13 has been the key mechanism for defining sustainable development goals and targets. Implementation of the SDS has been assessed on an annual basis. Further in-depth assessment of the costs and benefits of implementing the Strategy’s measures should provide a good basis for a new Development Strategy for 2013 20, which would integrate a green growth perspective. In addition to the SDS, an abundance of sectoral strategic documents have been produced by different ministries. However, inter-ministerial co operation required to exploit synergies and identify trade-offs is lacking. Environment formed part of the Exit Strategy 2010-13, the fiscal stimulus implemented in response to the global economic and financial crisis. The Exit Strategy included measures to: adjust the planning and permitting system for transport, energy and environmental infrastructure; modernise the railways; promote renewable energy; adapt to climate change; and increase the competitiveness of the agriculture and food processing industries while reducing environmental impacts, and optimising forest management.

 

In 2009, revenue from environment related taxes reached 9% of total tax receipts and 3.5% of GDP, well above OECD averages. As in most OECD countries, the bulk of this revenue was accounted for by taxes on energy carriers, motor fuels and vehicles. Even though excise duties on petrol and diesel increased in 2009, the tax on diesel was about 90% of that on petrol in 2009/10, and decreased to 80% in 2011, which is not justified from an environmental perspective. Important refunds apply in the case of commercial use of diesel. Taxes applied to other fuels (such as for heavy fuel oil and gas oil used for heating, or coal and coke products) could better reflect the environmental costs associated with greenhouse gas and traditional air pollutant emissions. Substantial changes to vehicle taxation in 2009-10 linked a new one-off tax on new motor vehicles and annual taxes on trucks and buses to CO2 and Euro emission standards. The priority currently being given to strengthening the overall tax system provides an opportunity for an in-depth review of the effectiveness and efficiency of environment related taxation. This could pave the way for comprehensive green tax reform, which would contribute to fiscal consolidation while more effectively addressing environmental externalities. This review should include existing environmental taxes (e.g. the landfill tax, wastewater tax, CO2 tax, and taxes linked to Extended Producer Responsibility for various waste streams), as well as other economic instruments (e.g. user charges for waste collection, water abstraction, and wastewater collection and treatment).

 

After remaining unchanged for several years at 1.6% of GDP, the share of general government subsidies increased to 1.9% of GDP in 2009 but this increase was the result of a decline in GDP and an increase in subsidies. Information about the positive and negative environmental impacts of subsidies is patchy and the economic, social and environmental costs of such schemes have not been systematically assessed. The establishment of an inter ministerial working group in 2010 to study existing subsidies (including their environmental impacts) and the development of a register of subsidies are steps in the right direction. However, more rapid progress is needed, especially in the context of the needed fiscal consolidation.

Total expenditure on environmental protection increased from 1.5 to 2.1% of GDP in the period 2000 09. Public environmental expenditure remained broadly constant, at a level close to the OECD average of 0.8%. It focused on environmental infrastructure. Slovenia’s absorption of EU funds is improving: it has the highest contracting rate for committed funds (55%) among the ten new EU members, mainly due to simplification of financial management and control procedures. However, the absorption of funds for environment related investments has been slow. At the halfway point in the 2007 13 implementation period, less than one-third of the available budget had been contracted, and only 14% had been disbursed to beneficiaries. Delays were particularly important in the waste and railway sectors. Private environmental expenditure increased, mostly in the area of waste management. The Eco Fund has proven an effective mechanism for channeling public finance of environmental projects. Opportunities to further promote public-private partnerships in the areas of waste and wastewater management should continue to be explored, building on the experience of the Slovenian Export and Development Bank. This should be accompanied by the implementation of measures to ensure that quality of service is maintained at a reasonable price, including through increased use of benchmarking and performance evaluation.

 

Responsibility for financing of environmental infrastructure has gradually decentralised to local government, particularly for wastewater collection and treatment infrastructure, and accounted for more than two thirds of central government expenditure in 2009. However, while public needs may be better identified at the local level, greater decentralisation has resulted in fragmentation of efforts and in insufficient capacity and resources at the local level. The absence of a regional tier of administration in Slovenia makes the issue of municipal fragmentation all the more challenging. The adoption of the Balanced Regional Development Act in 2000 encouraged good co operation among Regional Development Agencies (RDAs), councils of regions and associations of municipalities and towns. Greater co operation among municipalities, and their co operation with the Ministry of Environment and Spatial Planning (MESP), is needed to strengthen the effectiveness and efficiency of environmental services and spatial planning policies.

 

Slovenia has increased its support for innovation. For example, gross expenditure on R&D for environmental purposes has more than tripled in real terms during the review period. Its share in total R&D has risen from 0.8 to 2.2%. Nevertheless, these shares are still smaller than those in many other OECD countries. Moreover, the outputs of Slovenia’s environmental innovation system, measured in terms of number and growth of total patent applications, are weak compared to those in many other OECD countries. The public sector accounts for most of the research effort, and there is a need for greater promotion of innovative activity in the private sector. This will be a challenge given the predominance of small and medium sized enterprises. The government could usefully draw on the OECD publication Fostering Innovation for Green Growth, to identify ways to strengthen its performance in promoting and disseminating environmentally related innovation.

 

Recommendations

  • Include explicit environmental objectives in the 2013-20 Development Strategy and in other strategic documents, such as the Regional Development, Transport and Agriculture Policies, taking account of their benefits and costs.
  • Gradually equalise the tax rates for diesel and petrol; remove refunds for taxation of commercial uses of diesel fuel; and assess how a broader reform of environment related taxes and subsidies, and other economic instruments of environmental policies, could help meet the policy objectives of the 2013-20 Development Strategy and contribute to fiscal consolidation.
  • Promote greater co operation between municipalities through Regional Development Agencies, Councils of Regions, and the associations of municipalities and towns of Slovenia, in order to achieve economies of scale and scope for environmental infrastructure; promote greater participation by the private sector in environmental investment while maintaining the quality of service at a reasonable cost, including through transparent benchmarking and performance evaluation; further strengthen co operation among institutional stakeholders in spatial planning.
  • Assess how capacity for eco innovation could be enhanced in light of the conclusions and recommendations of the OECD publication Fostering Innovation for Green Growth.


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Assessment

 

Over the last ten years, Slovenia has established a comprehensive framework of primary environmental legislation. It has successfully transposed most of the EU environmental directives into the 2004 Environmental Protection Act and other key national laws. It has also adopted new or revised environmental quality and emission standards, drawing on European legislation and the experience of other OECD countries. Slovenia has made substantial progress in creating a multi-tier system of environmental permitting. However, its secondary environmental legislation is complex, some areas are inadequately regulated, and there are overlaps and even contradictions between different decrees and ordinances.

 

Slovenia has introduced risk-based planning of environmental inspections, which helps the Inspectorate for the Environment and Spatial Planning to increase the effectiveness and efficiency of compliance monitoring. However, the environmental authorities could do more to promote better environmental performance by enterprises, particularly through providing them with information and guidance on how to best comply with regulations. The system of administrative enforcement could be strengthened through increasing the collection rates of environmental fines, and by making fines proportional to the financial gains of non-compliance.

 

The extent of municipalities’ autonomy and the absence of a regional administrative level have led to an important environmental governance gap between the national and local levels. While efforts are under way to develop common strategies to tackle priority issues such as local air pollution and waste management, national environmental authorities are often unaware of the environmental performance of the ever-growing number of municipalities. Oversight by the national government to ensure consistency in the implementation of environmental requirements could be improved by establishing a regular forum for dialogue between the Ministry of the Environment and Spatial Planning (MESP) and municipalities, possibly with active involvement of the associations of municipalities and towns of Slovenia. Such a forum should aim to better monitor and benchmark the environmental performance of local authorities, with a view to identifying and disseminating good practice. It should also facilitate better feedback from the local level for policy purposes.

 

Municipal fragmentation and insufficient oversight at the national level have impeded the balancing, in spatial planning, of the development needs of local communities and the protection and rational use of natural resources. This has contributed to growing urban sprawl, fragmentation of habitats, and longer commuting using private cars in the absence of public transport alternatives. Neighbouring local authorities seldom co-ordinate their land use plans, and they sometimes compete for industrial and commercial development projects. Lack of co operation at the local level is reinforced by lack of co ordination between relevant ministries at the national level. Environmental impact assessment procedures should provide adequate safeguards and provisions for public participation, particularly when assessments are conducted after a project has been included in a spatial plan. Developers are increasingly seeking ways to avoid public participation in planning decisions.

 

Slovenia ratified the Aarhus Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters in 2004. Provisions for access to information have been effective. Environmental NGOs play an important watchdog role and participate actively in environmental policy-making. Despite some initial uncertainties, the conditions under which NGOs can gain legal standing in environment related court cases have been clarified. However, citizens cannot take governmental authorities to court for failure to execute their duties, for instance with respect to environmental enforcement.

 

Recommendations

  • Streamline and ensure the coherence of the existing body of environmental law; identify ways in which the administrative burden on the regulated community can be reduced without compromising environmental objectives, in line with government policy in this area; systematically conduct regulatory impact assessment for new environmental laws and regulations.
  • Improve the efficiency of compliance assurance efforts by offering regulatory incentives (e.g. less frequent inspections, reduced reporting requirements, reduced permit fees) to operators that have reliably demonstrated good environmental behaviour; and by improving the provision of compliance guidance (through websites and publications), especially to small and medium sized enterprises.
  • Develop a transparent enforcement policy and strengthen the effectiveness of environmental enforcement by making the size of administrative fines at least equal to the financial gains of non-compliance, and improving collection rates; eliminate “discounts” for early payment environmental fines; and work with the Customs Administration to improve the collection of environmental fines.
  • Strengthen co-operation between the MESP, the Councils of Regions, and the associations of municipalities and towns of Slovenia to better co ordinate development and implementation of environmental policies at the local level, and to provide feedback on results achieved and remaining challenges.
  • Improve the co-ordination and coherence of local spatial plans by strengthening their scrutiny by the MESP  and the provision of financial incentives for municipalities to develop joint regional spatial plans; and systematically require environmental assessment, and encourage full participation by the public, before spatial planning decisions are made at the local level.

 

Biodiversity and nature protection

 

Slovenia enjoys extraordinarily rich biodiversity due to its location at the junction of several ecological regions. It hosts an abundance of species, including 850 endemic ones. Traditions of close-to-nature forest management – 60% of the land area is forest – and low intensity farming have helped to conserve much of this natural wealth. There is high public support for biodiversity protection, and NGOs contribute positively to policy developments; 35.5% of the territory is designated as part of the Natura 2000 network, the largest share among EU members. Protected areas appear to be well managed. Marine protected areas extend up to approximately 200 metres of coastal water as an integral part of the coastal protected areas. However, the size of strictly protected areas is less than the OECD average. Only 4% of the territory satisfies the strict criteria of IUCN categories I II, and only 44% of all habitats, and 20% of species of European Community Interest have a favourable conservation status. Freshwater, peatland and grassland habitats require better protection, as do mammals, amphibians, fish and non-vascular plants.

 

The National Nature Conservation Plan 2005 provides a good framework for strengthening biodiversity conservation and should be used, together with relevant EU directives, to guide priority-setting. The Operational Programme for the management of Natura 2000 sites has supported the integration of biodiversity into policies in sectors such as tourism, agriculture and forestry. These efforts should be strengthened. Opportunities to extend private sector participation in biodiversity conservation should be explored. Like many other countries, Slovenia would benefit from an economic analysis of ecosystem services which, among other benefits, could help identify how more use might be made of market based approaches to biodiversity conservation.

 

Water management

 

An abundance of water resources and a system of water rights and payments underpin Slovenia’s low water use intensity and low levels of water abstraction. Electricity and power generation account for nearly 80% of water demand. Water use by the manufacturing, household and agriculture sectors declined during the review period. Groundwater provides 97% of drinking water. The entire territory of Slovenia has been designated a nitrate vulnerable zone. Discharges of nutrients, chemical substances and other pollutants have been reduced due to expansion of the sewerage network and increasing wastewater treatment capacity, better agricultural practices, and measures to reduce discharges from industry. EU funding before and after Slovenia’s accession was instrumental in the expansion of water infrastructure.

 

Despite the implementation of regulatory and economic instruments, there is still a risk that water quality will not meet the requirements of the EU Water Framework Directive for good ecological, chemical and quantitative status by 2015, especially in the case of lakes and groundwater. Improving and extending water supply and wastewater infrastructure is a particular challenge, as only 53% of the population is connected to wastewater treatment plants with the remainder using cesspools. This was partly related to the dispersion of the settlements and the higher cost of connecting to networks but also to poor spatial planning and low priority attached to wastewater collection and treatment. Further efforts are needed to meet the 2015 government objective of connecting 70% of the population to wastewater treatment plants, improving treatment efficiency, and ensuring the safe operation of individual wastewater collection systems to prevent groundwater contamination. Consideration should be given to reforming water utilities, including through greater co-operation among utilities to achieve economies of scale,  improving their managerial capabilities and their establishment as autonomous institutions operating on a financially sustainable basis. Establishing an independent body to regulate prices and to benchmark utility performance, similarly to arrangements in the energy sector, would create a stable and transparent regulatory and incentive framework. The possible benefits of greater private sector participation should also be assessed.

 

Slovenia should act more decisively to implement integrated water resources management. River basin management plans have been adopted in July 2011,  exceeding deadlines established by the EU Water Framework Directive. However, the economic and financial analysis of measures for better water management should be strengthened with a view to enhancing their effectiveness and efficiency. This is all the more important in light of budgetary pressures and of reduced EU resources in the long term. Reforming the current system of abstraction and wastewater charges, and making the use of these charges more effective should help in this regard. In preparing the river management plans, more emphasis should also be placed on better integration of policies for sustainable use of water in the main water-consuming sectors. Greater efforts are needed to reduce the environmental impacts of agricultural policies, including for manure management and expanding the use of water for electricity generation. The latter requires special attention as plans are extensive for adding new, and increasing the capacity of existing large-scale hydro power units, as part of the government's renewable energy strategy.

 

Recommendations

 

Biodiversity and nature protection

  • Complete the designation of a comprehensive and representative network of legally protected areas; implement plans for the protection of priority habitats and species in the framework of Natura 2000.
  • On the basis of an interim assessment of the implementation of the National Nature Conservation Plan 2005 15, establish priority objectives for the next phase of the Plan, and identify measures to achieve these objectives.
  • Continue to strengthen scientific understanding of ecosystems and biodiversity; carry out an assessment of the economic value of ecosystem services in Slovenia; assess how greater use of market-based approaches could help to better integrate biodiversity and sectoral policies.

 

Water management

  • Expedite the completion of river management plans, taking full account of synergies and trade-offs with other sectors and policies (energy, water supply and sanitation, agriculture, flood prevention, nature conservation and climate change adaptation); strengthen the economic and financial analysis of policy development and implementation.
  • Redouble efforts to extend the wastewater treatment capacity to cover all large settlements; consider a comprehensive reform of water utilities, including greater co operation to achieve economies of scale, establishment of utilities as autonomous institutions operating on a financially sustainable basis, and creation of an independent body to regulate prices and benchmark utility performance.
  • Ensure that cumulative environmental impacts of the planned extension of hydropower capacity are fully assessed and appropriate measures to limit these impacts are integrated into the design and operations of hydropower installations; ensure the broadest possible public participation in environmental impact assessment procedures.
  • Strengthen measures to reduce agricultural pollution of water resources, including by extending drinking water protection areas and by making greater use of economic instruments to reduce pollution from manure usage and storage.
  • Strengthen the water monitoring system, including ambient monitoring of the ecological and chemical status of surface water and the chemical and quantitative status of groundwater, in order to fully comply with the requirements of the EU Water Framework Directive.

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Assessment

 

Slovenia has actively engaged in a host of international environmental activities over the last decade. Even the heavy preparations for joining the European Union in 2004 did not crowd out priority international environmental dossiers. More than for most other countries, physiography and geography determine the priorities of Slovenia's international environmental relationships, notably with respect to water management and conservation of biodiversity. Bilateral co operation between Slovenia and its neighbouring countries includes water management agreements with Italy, Hungary and Croatia, and agreements with Austria on spatial planning in border regions, notably regarding the Drava and Mura rivers.

 

Slovenia's commitment to sustainable development on a regional and sub-regional scale is articulated through various co operation agreements covering the Alps, the Danube and its tributaries, and the Mediterranean (including the Adriatic). The Dinaric Arc area is an emerging focus of co operation. During the past half-decade, Slovenia played an important leadership role. It launched several initiatives during its terms as president of the Barcelona Convention in 2006 07, the European Union in the first semester of 2008, the Alpine Convention in 2009 11 and the Danube Commission in 2010. Less visible than its presidential roles, but no less important, are the many informal contacts Slovenia continues to maintain at a professional/technical level with the countries of the western Balkans.

 

Slovenia is a party to the UNEP Barcelona Convention for the Protection of the Marine Environment and the Coastal Region of the Mediterranean. It has ratified five of this Convention's seven protocols, the most recent of which was the 2008 protocol on integrated coastal zone management. It has signed, but not ratified, the 1994 Offshore protocol (pollution from exploration and exploitation), and it has not signed the 1996 Hazardous Wastes protocol. As in the case of the Danube Convention, the locus of Slovenia's activities under the Barcelona Convention lies close to home, by way of a joint Slovenian-Italian-Croatian-Montenegrin Commission for the Protection of the Waters of the Adriatic Sea and Coastal Waters against Pollution.

 

Slovenia is also a party to the Alpine Convention. Its National Assembly ratified all eight of this Convention's implementing protocols in 2003. Slovenia's main priorities in the Alps are implementing the Alpine Convention at the local level, stimulating regional co operation, and promoting the Action Plan on Climate Change in the Alps. It wishes to use experience with the Alpine Convention to establish greater international co operation in the Dinaric Arc area, so as to promote economic development based on the area's natural and cultural wealth.

 

Beyond its immediate region, Slovenia has committed itself to all the relevant multilateral environmental agreements (MEAs) and most of the associated protocols. Slovenia actively fulfils its responsibilities to submit national reports to conferences of parties and national implementation plans required by MEAs. For example, under the Stockholm Convention it is actively developing a National Implementation Plan with long list of measures, such as replacing or decontaminating all installations containing PCBs by 2010. Slovenia is a party to the Basel Convention and implements the 1995 "Basel ban" amendment. As of March 2011, it was preparing to ratify the Basel Convention's 1999 liability and compensation protocol.

 

Slovenia expects to fulfil all of its 2010 obligations under the Convention for Long-range Transboundary Air Pollution (emission inventories will be prepared in 2012), although emissions of nitrogen oxides are likely to become a problem once the economy recovers. It is a party to the 1992 Helsinki Conventions on the Transboundary Effects of Industrial Accidents, and on the Protection and Use of Transboundary Watercourses and International Lakes. In 2011, Slovenia was preparing to ratify the latter's 1999 Protocol on Water and Health but was still considering whether to ratify its Protocol on Civil Liability and Compensation for Damage Caused by the Transboundary Effects of Industrial Accidents on Transboundary Waters. Slovenia ratified the Bonn Convention on Migratory Species (CMS) and is a party to the EUROBATS, ACCOBAMS and AEWA agreements. Under the Ramsar Convention on Wetlands, it has so far designated three wetlands, but progress on a further half dozen is behind the schedule set out in the NEAP 2005 12. Under CITES, Slovenia has built up a working regime to stop illegal trade in wild fauna and flora.

 

In 2004, Slovenia's status changed from recipient to donor of official development assistance (ODA). It adopted the International Development Co operation Act in 2006, and two years later the National Assembly defined the geographical and thematic priorities for development co operation. Slovenian foreign and ODA policy are mostly targeted at the same parts of the world, that is, the Western Balkan countries and Eastern Europe. In 2009, ODA amounted to 0.15% of GNI, close to the 2010 EU target of 0.17%. Of the total of EUR 51.3 million, 64% was allocated as international development co operation and 28% as bilateral aid. The environmental component of Slovenian ODA amounted to about EUR 3.5 million, or almost 7% of the total, in 2009. It included projects on electric and electronic waste management, air quality measurement and wastewater treatment. From 2000, Slovenia contributed about SDR 1 million per year to the GEF. For the period 2011 14, it pledged SDR 4.3 million, or 0.21% of total contributions, well above its basic contribution share of 0.03%. Slovenia intends to increase the share of ODA going towards environmental proposals, particularly water projects.

 

Recommendations

  • Further explore and facilitate ways in which local governments and civil society can participate in the implementation of regional and subregional international environmental co operation agreements.
  • Further pursue the idea of formal international co operation agreement in the Dinaric Arc area.
  • Implement outstanding international commitments, including establishing an operational emergency response system for the Adriatic Sea and designating further wetlands under the Ramsar Convention.
  • Gradually increase official development assistance and its environmental components, in line with EU and international obligations; consider giving greater emphasis to projects promoting biodiversity conservation.
  • Review the overall coherence and effectiveness of Slovenia's international environmental engagement.

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Assessment

 

While significant structural changes to Slovenia’s economy led to a notable drop in GHG emissions in the 1990s, performance in this area since 2000 has been uneven. Emissions from the manufacturing, commercial and residential sectors have decreased, but not enough to offset an increase from the transport sector. The net result has been an increase in total emissions during much of the decade. In 2009, CO2 emissions (which account for the lion’s share of GHG emissions) fell by over 10% due to the global economic and financial crisis. This enabled Slovenia to come close to meeting its Kyoto Protocol target of reducing average annual GHG emissions in the period 2008 12 by 8% compared with its chosen base year of 1986. Sustainable forest management enables Slovenia to use its maximum carbon sink allowance under the Kyoto Protocol. The government estimates that Slovenia will achieve the Kyoto target with a small (0.4 Mt CO2 eq) purchase of international carbon credits.

 

Slovenia reduced its emissions of virtually all traditional air pollutants during the review period, including those of SOx, NOx, NMVOCs, CO and NH3 as well as particulate matter and heavy metals. These emissions have been decoupled from economic growth and fossil fuel supply in absolute terms. This achievement was largely due to effective reductions from large pollution sources such as power plants and industrial installations. In 2009, Slovenia was on track to achieve international commitments under the EU National Emission Ceiling (NEC) Directive and the UNECE Gothenburg Protocol for most pollutants, except for not meeting the NOx emission ceiling target. While concentrations of air pollutants such as SO2, NO2 and CO were below limit values, the levels of exposure of the urban population to PM and ozone were among the highest in any of the EU27 countries for most of the review period. Levels of these pollutants above national daily and annual limit values are observed throughout the country. Road transport in urban centres, the use of wood stoves for heating in households, and unfavourable temperature inversions are the major contributing factors. A few air pollution “hot spots” still exist around industrial facilities and power plants, where traditional air pollutant concentrations negatively affect human health. Attention to climate change should not be at the expense of effective air management, and the co-benefits of air management and climate mitigation policies should be fully exploited. Sectors not covered by the EU ETS (transport, enterprises that are not energy-intensive, and individual wood-based household heating) accounted for about 60% of GHG emissions in 2009 and should be targeted in this regard.

 

Slovenia has largely transposed EU directives related to climate change mitigation and air pollution prevention and control. It has also developed a variety of strategies and plans related to energy use, and to GHG and air emissions. The result is a patchwork of provisions that lacks coherence and consistency. The creation of the Office of Climate Change in 2009 was an important step in this direction. So was work on the Strategy for the transition of Slovenia to a low carbon society by 2050 and the Climate Change Act. Both documents should be expeditiously put into effect and implemented. The development of more consistent and coherent policies requires a correspondingly coherent and consistent analytical base. That base is currently lacking, together with a consistent approach to carbon pricing. Among other effects, this results in failure to identify and exploit the most cost-effective approaches to reducing emissions and energy use. Policy implementation is hindered by unclear responsibilities between the national and sub-national levels, and by lack of guidance at the municipal level.

 

Slovenia has extensive experience with the use of climate-related market-based instruments, including the CO2 tax on energy carriers, motor vehicle registration fees linked to CO2 and Euro emission standards, and the energy efficiency tax. These instruments have been used mainly to raise revenue, whereas there is potential to use them more widely. In 2010, legislation was passed to replace a portion of the excise duty on motor fuels by a CO2 tax, but the tax has not yet been implemented. Although duties on diesel and petrol were significantly increased in 2009, the excise duty refund scheme on diesel fuel used for commercial purposes was introduced due to the difficult economic situation. Environment related taxation and other relevant economic instruments should be reviewed to ensure consistency with EU legislation, in order to reduce the overall costs of climate policies to the economy.

 

Achieving policy objectives related to climate mitigation and air management requires a significant reduction of the environmental footprint of the transport sector. Transport policy has been geared to the expansion of road construction and promotion of the use of road vehicles, for both freight and passengers. Lack of appropriate land use planning, insufficient public transport infrastructure, and a high rate of international transit road traffic have reinforced this trend. As a result, Slovenia is locked in to a transport system that is highly carbon intensive and will take many years to change. A comprehensive strategy is needed to more effectively integrate transport, environmental and land use policies at the national level. These efforts should be accompanied by vigorous and well co ordinated actions by municipalities.

 

Slovenia’s renewable energy and energy efficiency policies have become increasingly complementary. The ambitious 39.3% target of renewable energy in final electricity consumption will not be met without reducing total electricity consumption. Potential for new renewable capacity exists, but its development requires careful assessment of cumulative environmental impacts, e.g. the impacts of new hydropower installations on rivers, the impacts of using biomass from forests, and the impacts of wind power on biodiversity and landscapes. Feed-in tariffs and feed-in premium support schemes for renewable electricity and high-efficiency co generation have been in place since 2002. They will need to be adjusted to changing circumstances, as was done in 2009 when more transparency and stability were introduced with respect to feed-in tariff and premium levels. It is unlikely that Slovenia will meet its EU energy efficiency objective of a 9% reduction in end-use energy consumption by 2016 compared to 2008 unless it more effectively identifies and exploits low cost options. The interactions of renewable energy and energy efficiency policies with the EU ETS should be kept under review to avoid unnecessary overlap, and to ensure the overall cost-effectiveness of policy measures. Slovenia is unlikely to meet the target of 10% renewable energy in final consumption in the transport sector.

 

Recommendations

  • Expedite the adoption and implementation of the Climate Change Act, including provisions for: legally-binding targets for reducing GHGs; a system of rolling “carbon budgets” that caps emissions over specific periods harmonised with the timing of international and EU processes; an independent body to advise on carbon budgets and to assess progress; a system of reporting to Parliament, including on climate change adaptation policies.
  • Promote more coherent and consistent climate- and energy-related policies by better co ordinating, and reinforcing capacity for, analysis of their economic aspects, and by regularly reviewing the cost-effectiveness and linkages among policy measures; establish a strong, stable shadow price for carbon in the evaluation of public investments; include greenhouse gas emissions from consumption of imported products in the analysis of climate-related policies.
  • Urgently develop a comprehensive strategy to reduce energy use in, and related emissions from, the transport sector; ensure coherence of this strategy with policies for managing air pollution; ensure that funding allocated for planned investment in public transportation and rail under the 2007 13 EU Operational Programme for Environmental and Transport Infrastructure is fully used for these purposes; and comprehensively review the tax regime that applies to the purchase and use of private and commercial vehicles, including refunds of excise duty on diesel fuel used for commercial purposes, with a view to optimising environmental and economic benefits.
  • More systematically identify and exploit low-cost opportunities to reduce energy consumption in sectors outside the EU ETS.
  • Develop comprehensive strategies to achieve air quality objectives in urban centres, including through accelerated renovation and replacement of small-scale wood burning stoves, promotion of cleaner modes of transport in urban areas, and better integration of land use planning, transport and environmental policies; assess the feasibility of pollution and congestion charges for car use in urban centres.
  • Clarify the roles of municipal governments in air pollution reduction policies and measures, and establish a framework, in co-operation with the associations of municipalities and towns of Slovenia, that enables them to become pro-active partners in these policy areas; establish clear policy targets and guidelines for policy implementation at the local level.
  • Undertake vulnerability and impact assessments with a view to elaborating a strategy for adaptation to climate change covering affected sectors and regions.

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Assessment

 

At the beginning of the decade, waste management was considered one of the most poorly regulated areas of environmental protection in Slovenia. Close to 100% of waste was disposed in landfills, which did not always meet the highest standards, and the waste recovery rate was low. Illegal disposal of waste, especially in karstic areas, was common.


Accession to the EU provided a strong impetus to strengthen waste management policies and practices. It also provided finance for upgrading and constructing waste management infrastructure. Implementation of the EU environmental acquis was operationalised in a number of programmes, including two National Environmental Action Programmes (2000 05 and 2005 12) and several operational programmes for different waste streams. Policy has largely been driven by compliance with EU directives rather than by the situation in Slovenia. The need to transpose the revised 2008 EU Waste Directive, and to develop a new programming framework beyond 2012, provides an opportunity for Slovenia to develop a more systematic and consistent strategy for waste management that strikes a better balance between implementing EU policies and addressing Slovenian priorities, taking account of the costs and benefits of alternative ways of managing its waste. Given that implementing the requirements of the EU Landfill Directive to pre-treat waste sent to landfill will be difficult because the definition in the Directive is unclear, Slovenia should establish a less stringent pre-treatment target, and one not based on total organic carbon as this restricts the forms of pre-treatment which can be used.


The overall use of materials by the Slovenian economy increased by one-quarter during the review period, but remained around half of the OECD and OECD Europe averages on a per capita basis. Material productivity (i.e. economic output generated for each unit of abiotic primary material consumed) decreased by 4% in the 2000 07 period, which compares poorly with the OECD overage of 12% increase during the same period. However, these trends have been strongly influenced by the increased share of construction materials in domestic material consumption. Material productivity increased for the first time in the decade in 2008.


The system of data collection for material flows and waste is still developing, and some classifications have changed in recent years. This complicates performance assessment. Nevertheless, available information suggests that the amount of waste generated in Slovenia increased by over 40% from 2000 to 2007, falling back somewhat thereafter due to the impacts of the economic crisis of 2008 09. In 2010, non-hazardous waste from production and services accounted for 85% of waste generated. Of this, construction demolition waste accounted for a significant fraction, peaking at 37% of the waste generated in 2007. Municipal waste has increased since 2000 at a slower rate than GDP and private final consumption. It accounted for 12% of total waste in 2010. Hazardous waste accounted for 1.5% of the total in the same year. During the second half of the decade, the amount of waste imported for recycling increased six times. This provides important business opportunities, but also requires careful monitoring and oversight to ensure appropriate treatment standards. On a per capita basis, waste generation remained well below OECD average related to Slovenia’s lower GDP per capita. This suggests that there will be further pressures to generate waste as incomes converge with the OECD and EU averages.


Slovenia has reduced its reliance on landfilling and improved the environmental integrity of existing landfills. The landfill gate fee increased significantly to cover aftercare costs. Recovery of municipal waste also increased, particularly in the period 2009 10, to 35% of the total. Separate collection of individual waste streams (including waste packaging, organic waste, batteries, waste electrical and electronic equipment, end-of-life vehicles and tyres) was important in this regard. However, further efforts are needed to improve separate collection to meet the national objective of recovering 55% of municipal waste. Producers should bear the costs of collection and recycling schemes, either directly or by fully reimbursing local authorities for providing these services. The government should set clear targets for recovery and recycling and specify related performance standards. These steps should be accompanied by vigorous efforts to prevent the generation of waste at source in industry and households.


Since the amount of biodegradable waste that goes to landfills is well in excess of the 2012 target of 28%, strengthened efforts are needed to establish effective systems for separate collection of kitchen and garden waste. This will require parallel development of adequate treatment capacity for the collected material, and of quality assurance schemes designed to develop confidence in the market for composts.


The landfill tax, in place since 2000, was an important factor in improving the operation and performance of landfills. However, this was mainly due to reinvestment of the revenues generated. The tax design appears to have had only a limited incentive effect on producers of waste in the production and service sectors, and to have provided perverse incentives for municipalities to continue landfilling. Some adjustments to the design of the tax, and the use of revenue, made in 2010 should improve its overall effectiveness. However, the current tax rate is low compared to the rates in many other European countries. Increasing it would provide greater incentives to reduce waste disposal in landfills.


The proportion of the population covered by regular municipal waste collection increased from 76% in 1995 to 96% in 2010. However, coverage varies significantly between municipalities. Waste management services are largely provided by a large number of relatively small public authorities. The level of recovery through charges for collection and treatment costs is low in some municipalities. There is no coherence or consistency between prices across regions/municipalities (e.g. either per capita, per tonne or per m3), which makes the assessment of performance of different systems difficult. The transfer of pricing responsibility to local communities in 2009 (in the absence of an appropriate pricing methodology and an independent regulatory body) led to a substantial price increase, with no incentive to reduce costs or improve efficiency. A new methodology under preparation should encourage a more appropriate level of cost-recovery for operations, impose greater market discipline on service operators in setting prices, and provide better incentives for waste separation. These steps should be supported by widening kerbside/door-to-door systems for collection of recyclables, as well as increasing the number of the larger collection centres where the range of separately collected items is wider. Operators’ performance should be benchmarked. The consolidation of service provision in larger units could help to reduce costs by realising economies of scale. Public concerns about locating waste facilities should be addressed through early and open consultation procedures.


Further measures are needed to reduce the generation of construction and demolition (C&D) waste. While recycling has increased, it is less than half of the total generated, well short of the EU target of 70%. To address this challenge, consideration should be given to the application of economic instruments, such as taxes on primary aggregates or refundable compliance bonds, as well as to ensuring that collection centres make provisions for receiving C&D waste. Better monitoring and tracking of the fate of wastes generated by C&D activities is also needed, including “auditing” of the mass flows of waste from C&D sites. Strengthening licensing and requirements for better registration of C&D deposits with the Environmental Inspectorate could help both to reduce the extent of illegal disposal and to increase the rate of recycling of C&D wastes. Better information is needed about the presence of asbestos in Slovenian buildings; about one-quarter of buildings still have asbestos-cement coverings. The improved information should be used to set up appropriate infrastructure to manage asbestos waste in an environmentally sound manner and mobilise adequate financial resources for such a programme.


Several contaminated sites exist in Slovenia, resulting from past industrial activities or from inadequate waste disposal and treatment. Several measures have been taken to limit water and air contamination and reclaim contaminated soil. However, progress has been slow due to high costs and technical complexities of decontaminating the affected sites. In the short term, more detailed programmes should be developed for each site and adequate resources provided, using risks to human health and the environment as criteria to prioritise actions.

 

Recommendations

  • Develop an overarching waste management strategy that takes account of EU requirements, Slovenia’s specific conditions, and the costs and benefits of alternative ways of managing waste.
  • Strengthen the information system for the generation, collection and treatment of different waste streams to allow better analysis of waste sources and trends, and of the performance of waste management operators, and to develop more effective policies for waste prevention, higher rates of recovery and recycling, and safe disposal.
  • Review Extended Producer Responsibility schemes with a view to ensuring that producers bear the full costs of collection and recycling of their products.
  • Clarify the definition of “pre-treatment” to be used in the implementation of the EU Landfill Directive without restricting the forms of pre-treatment that can be used; introduce quality assurance schemes for outputs of biowaste treatment in order to develop confidence in the market for compost products.
  • Increase the tax on landfill with a view to capturing the full benefits of avoided disposal and providing better incentives for redirecting waste from landfills; promote co operation between municipalities for the treatment of residual waste.
  • Improve the recycling, re-use and recovery of construction and demolition waste (C&D), for instance through improved licensing, reporting and registration of C&D deposits, auditing of the mass flows of waste from C&D sites, and greater use of economic instruments, such as a tax on primary aggregates and refundable compliance bonds.
  • Conduct a survey of existing buildings containing asbestos, with a view to establishing a programme to manage asbestos-containing waste in an environmentally sound manner and mobilising adequate financial resources for such programme.

__________________________________________________________

 

For more information please contact Krzysztof Michalak or Shayne MacLachlan

__________________________________________________________

www.oecd.org/env/countryreviews/slovenia

 

 

 

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