This chapter provides a brief overview of key environmental trends in Slovenia and progress towards the Sustainable Development Goals and other environmental targets. It assesses the environmental effectiveness and economic efficiency of the environmental policy mix, including regulatory, fiscal and economic instruments and investment in environment-related infrastructure. It examines the interaction between the environment and other policy areas with a view to highlighting the opportunities and barriers to enhance policy coherence for sustainable development.
Chapter 1. Towards sustainable development
Copy link to Chapter 1. Towards sustainable developmentAbstract
1.1. Introduction
Copy link to 1.1. IntroductionSlovenia has a small, open economy that enjoyed dynamic growth over 2014-2019. Although services (notably tourism) dominate, industry (automotive, pharmaceuticals, electrical and electronic equipment) accounts for a larger share of value added than in most OECD Member countries. Following a robust recovery from the COVID‑19 pandemic, economic growth has slowed but has remained resilient amid multiple shocks (OECD, 2024[1]). These shocks include the Russian Federation’s war of aggression against Ukraine and the 2023 floods. Gross domestic product (GDP) is projected to grow by 0.9% in 2025 and by 2.3% in 2026, driven by domestic demand (OECD, 2025[2]). Population is mainly rural, with small and dispersed settlements. Unemployment and income inequality are low (EC, 2025[3]). Nevertheless, regional disparities persist between the capital region and other parts of the country.
Located in the southern part of central Europe, at the junction of four biogeographic regions (the Alps, Pannonian Plain, Dinaric Mountains and the Mediterranean), Slovenia is one of the most biodiverse countries in Europe (Bolješić, 2019[4]). Forests cover about 60% of its land area and agricultural land covers 30%. The country is richly endowed with forest and freshwater resources. In 2024, renewable energy (mainly biomass and hydropower) accounted for 20% of energy supply, in line with the European Union (EU) average. However, the share of fossil fuels was lower in Slovenia (59% vs. 65%) due to its nuclear power plant. Imports (mainly oil) account for half of its energy supply.
Slovenia is a decentralised unitary state with 212 municipalities. The Ministry of the Environment, Climate and Energy (MOPE) and Ministry of Natural Resources and Spatial Planning (MNVP) are the main environmental authorities. In the absence of a regional governance level, municipalities are responsible for environmental management at the subnational level.
1.2. Addressing key environmental challenges
Copy link to 1.2. Addressing key environmental challenges1.2.1. Decoupling environmental pressures from economic growth
Slovenia has made progress on decoupling
Over 2010‑2024, Slovenia decoupled energy supply, emissions of greenhouse gases (GHGs) and major air pollutants, and to a lesser extent (relative decoupling), freshwater abstractions and municipal waste generation from economic growth (Figure 1.1). Domestic material consumption, which had declined in the early 2010s, rose in line with GDP over 2020‑2023, driven by the post-COVID recovery in the construction sector. It fell again in 2024.
Figure 1.1. Slovenia managed to decouple some key environmental pressures from economic growth
Copy link to Figure 1.1. Slovenia managed to decouple some key environmental pressures from economic growth
Note: LULUCF: land use, land-use change and forestry. NH3: ammonia. NOx: nitrogen oxides. PM2.5: fine particulates. Domestic material consumption is the amount of materials directly used in an economy, or the apparent consumption of materials. It is computed as domestic extraction used minus exports plus imports.
Source: EMEP (2026), WebDab (dataset); IEA (2025), IEA World Energy Statistics and Balances (dataset); OECD (2025), OECD Environment Statistics (dataset); OECD (2025), OECD Economic Outlook (dataset group); SURS (2026), SiStat (dataset).
The Slovenian Development Strategy 2030 (GoRS, 2017[5]) aims to ensure a high quality of life for all through balanced economic, social and environmental development. The country ranks in the top half of EU countries on most global composite indicators of quality of life (IMAD, 2025[6]). According to the Sustainable and Inclusive Wellbeing Index,1 Slovenia performs strongly on well-being, inclusiveness and the environment but lags in economic development. Its performance exceeds the EU average on most environment-related Sustainable Development Goals (SDGs), except for responsible consumption and production (SDG 12) and climate action (SDG 13) due to high related economic losses (Chapter 2) (EC, 2025[7]).
1.2.2. Biodiversity
Slovenia’s rich biodiversity is under threat
Slovenia is one of Europe’s most biodiverse countries (Bolješić, 2019[4]). It is also among the EU’s most forested territories, while its agricultural land is predominantly permanent grasslands (FAO, 2025[8]). Landscape categories are rich, comprising coastal and marine types, inland waters, scrub and grasslands, forests, marshes, rocky habitats and caves, as well as agricultural and urbanised landscapes. Less than 18% of the coastline, which stretches less than 50 km along the Adriatic Sea, is still in its natural state (UNEP/MAP-SPA/RAC, 2021[9]).
Although Slovenia compares favourably with the EU average, about 60% of habitats and half of species of conservation importance2 are in an unfavourable state, particularly freshwater ecosystems and grasslands (Figure 1.2). Agriculture, urbanisation and modification of water regimes are the main pressures on terrestrial habitats and species (ARSO, 2020[10]). Urbanisation is the key pressure on coastal and marine areas, followed by maritime transport and leisure boating (UNEP/MAP-SPA/RAC, 2021[9]). In addition, invasive species, new diseases and climate change affect biodiversity (Bolješić, 2019[4]).
Figure 1.2. A significant share of habitats and species is in an unfavourable state
Copy link to Figure 1.2. A significant share of habitats and species is in an unfavourable state
Note The unit shown (share of assessments) refers to single assessments in one biogeographical region over 2013‑2018. Therefore, one species or habitat type that occurs in more than one biogeographical region can have more than one assessment. Sclerophyllous scrubs: Juniperus communis formations on heaths or calcareous grasslands.
Source: EEA (2023), Conservation status of habitat types and species: Datasets from Article 17, Habitats Directive 92/43/EEC reporting.
The protected area network is extensive on land but limited in marine areas
With 40% of terrestrial areas designated for protection, the highest share in the OECD, Slovenia has already surpassed the 2030 target of 30% (Figure 1.3). Natura 2000 sites cover 38% of its territory, the largest share in the EU (EEA, 2025[11]). However, only 5% of marine areas under its jurisdiction are protected. The possibilities for expanding marine protected areas in a narrow and heavily modified coastal strip are limited. Nevertheless, Slovenia should step up efforts to protect the remaining natural coastline, address pressures from coastal urbanisation and co‑operate with its neighbours on marine biodiversity conservation (UNEP/MAP-SPA/RAC, 2021[9]).
Figure 1.3. Slovenia has the highest share of protected land in the OECD
Copy link to Figure 1.3. Slovenia has the highest share of protected land in the OECD
Note: CBD: Convention on Biological Diversity. EEZ: exclusive economic zone. IUCN: International Union for Conservation of Nature. Some protected areas have not been designated under a specific international category. Data exclude “other effective area-based conservation measures”, which are areas achieving sustained long-term outcomes for the in-situ conservation of biodiversity outside of protected areas.
Source: OECD (2025), OECD Environment Statistics (dataset).
The National Biodiversity Strategy and Action Plan (NBSAP), which is an integral part of the National Environmental Action Programme (NEAP) 2020‑2030, was updated in line with the Kunming-Montreal Global Biodiversity Framework (CBD, 2020[12]) In the NEAP, the National Nature Protection Programme defines the long-term vision, targets and guidelines for biodiversity conservation. The Natura 2000 Management Programme 2023‑2028 and sectoral strategies (e.g. agriculture, forestry) specify the measures to achieve the global goals. An inter-ministerial working group is developing a national plan for nature restoration expected by mid‑2026 (MNVP, 2025[13]).
Public spending on biodiversity has hovered around 0.06% of GDP per year since the mid-2010s and was below the EU average of 0.08% in 2023. Financing needs for Slovenia’s NBSAP 2030 have been estimated at EUR 47‑53 million per year over 2021‑2027 (GoRS, 2020[14]), nearly double public spending on biodiversity over 2014‑2020.
The number of studies assessing ecosystem services has increased in recent years (Hribar and Ribeiro, 2024[15]). Slovenia developed a handbook for the identification and mapping of ecosystem services in protected areas. However, the country has not yet conducted a comprehensive assessment of ecosystem services at national level as recommended in the 2012 Environmental Performance Review (OECD, 2012[16]). A full mapping and economic evaluation of ecosystem services, as conducted in Slovakia (OECD, 2024[17]), is pending. It would justify and support biodiversity action, as well as attract private funding.
Biodiversity could be further integrated into agriculture
Biodiversity in agricultural land continues to decline, although the Common Farmland Bird Index has decreased at a slower rate than in the EU (-5% vs. -21% over 2010‑2023). Agri-environmental measures (nature conservation and organic farming) have had some positive impact on the Index, but not sufficient to reverse its long-term decline (Kmecl, Gamsar and Šumrada, 2023[18]). The EU has launched an infringement procedure against Slovenia for the deterioration of several bird and butterfly species in Natura 2000 sites, mainly due to unsustainable agricultural practices (EC, 2024[19]).
Intensification of beef and dairy production, supported by direct payments from the Common Agricultural Policy (CAP), and forest succession3 in marginal areas,4 have been key drivers of biodiversity loss (Šumrada, Kmecl and Erjavec, 2021[20]). Agri-environmental measures have insufficiently targeted high nature value grasslands (Machado et al., 2025[21]), suggesting the need to identify the most relevant patches to preserve and to convert other lands into grasslands. To preserve these habitats, Slovenia could develop result-based approaches, which farmers prefer over management-based arrangements (Šumrada et al., 2022[22]).
Slovenia’s 2023‑2027 CAP Strategic Plan allocates 40% of its resources to the biodiversity objective, above the EU average of 30% (EC, 2025[23]). Farmers who voluntarily commit to environmental standards beyond legal requirements are supported through agri-environmental-climate payments (Pillar 2) and eco-schemes (Pillar 1). Although a large share of agricultural land is part of the Natura 2000 network (24%, twice the EU average), the proportion subject to biodiversity commitments seems low (18% vs. 31% in the EU). Only 6% of Natura 2000 area is under supported commitment (19% in the EU).
Forests are well preserved but have faced large-scale disturbances
Forests are relatively well preserved in terms of natural tree species composition and stand structure; 96% are naturally regenerating (SFS, 2025[24]). Logging intensity (ratio of fellings to gross increment) is lower than in most OECD European countries (Figure 1.4). After reaching high levels over 2014‑2018 due to large-scale forest disturbances, the logging intensity returned to its pre-2014 level. It then started to rise again, albeit to a lesser extent, with increasing volumes of sanitary cuts. All forests are under ten-year management plans. About 77% are privately owned, 20% belong to the state and 3% to municipalities. Private forest ownership is highly fragmented, with an average property size of 3 hectares.
More than most European countries, Slovenia practises close-to-nature5 and sustainable forestry (clear-cutting has been prohibited since 1947) (Larsen et al., 2022[25]). Over the past 15 years, nature conservation has been further integrated into forest management (MOP, 2020[26]). Thanks to the Forest Fund6 and EU support (e.g. LIFE-IP), the area left to natural development in Natura 2000 areas of private forests and the volume of deadwood have increased. Conserving forest biodiversity requires addressing several challenges: adapting forests to the consequences of climate change; protecting large forest areas at the landscape level; improving data; reconciling conflicting objectives (recreation and tourism, forest management, biodiversity conservation); and co-financing biodiversity conservation measures in private forests (SFS, 2025[27]) (Chapter 2).
Figure 1.4. Slovenia has a low intensity of logging
Copy link to Figure 1.4. Slovenia has a low intensity of logging
Note: Intensity of use of forest resources: ratio of fellings to productive capacity (gross increment). Panel A: countries selected are those with the highest and lowest logging intensity. Panel B: Slovenia has witnessed a series of forest disturbances on an unprecedented scale: ice storm in 2014, widespread bark beetle outbreaks in 2015 and 2016, windthrows in 2017 and 2018.
Source: OECD (2025), OECD Environment Statistics (dataset); SURS (2025), SiStat (dataset).
1.2.3. Water management
Slovenia is water abundant, but climate change is increasing seasonal scarcity
Freshwater resources are abundant in Slovenia, although water scarcity and drought in certain regions are a growing concern exacerbated by climate change (Chapter 2). The south and west of Slovenia are the most exposed to dry conditions and drought. River flows are declining across the country, with low water levels in some rivers (ARSO, 2025[28]). Climate change impacts, such as increasing temperatures and more intense precipitation events (which lead to increased runoff, rather than improving soil moisture), exacerbate such conditions. The lack of irrigation infrastructure makes agriculture vulnerable to climate impacts.
The large majority (77%) of freshwater abstractions between 2012‑2023 were for electricity cooling (non-consumptive use). Public water supply accounted for 19% of abstractions, industry for 4% and agriculture for less than 1% (OECD Environment Statistics).
Slovenia enjoys good water quality, but diffuse pollution from agriculture remains a key challenge
Water quality in Slovenia is generally good, but further progress to reduce agricultural pressures is needed to reach objectives under the EU Water Framework Directive. As of 2024, over three-quarters of bathing waters were of excellent quality and none were of poor quality (EC, 2025[29]). Just over half of surface water bodies fail to achieve good ecological status (Figure 1.5) due to hydro-morphological pressures, agricultural runoff, pesticides, other chemical pollutants and wastewater discharges. The share of water bodies meeting good ecological status in the Danube River Basin declined from 52% in the second River Basin Management Plans (RBMPs) to 41% in the third RBMPs, mainly due to improved coverage and methodologies to assess ecological status. Almost all (99%) surface water bodies have good chemical status, when mercury and other ubiquitous substances are not considered; no surface water bodies have good chemical status when these substances are taken into account. Chemical status is good for groundwater bodies in the Adriatic River basin, but several pressures in the Danube River Basin contribute to poor status in 17% of groundwater bodies. The main pressure on groundwater is diffuse pollution from agriculture due to nitrate leaching and pesticide contamination.
Overall, nitrate levels in groundwater have shown a downward trend; but the Savinja, Mura and Drava aquifers, where there is over 60% of agricultural land, have exceeded nitrate limit values since 2017 (ARSO, 2025[30]). Excessive levels of nitrates are a major cause of deterioration in the quality of drinking water (CoA, 2020[31]). Consumption of pesticides per hectare of arable land has declined since 2012. It remains relatively high compared to other EU countries but comparable to those with similar crop patterns and farming conditions (ARSO, 2025[32]). In 2017‑2022, 10% of surface water bodies in Slovenia exceeded thresholds for pesticides (EEA, 2024[33]). Further research is needed to identify the sources of chemical pollution and the impacts related to fishing (EC, 2021[34]).
Figure 1.5. Water quality in Slovenia is generally good, although ecological status is poor in over half of surface water bodies
Copy link to Figure 1.5. Water quality in Slovenia is generally good, although ecological status is poor in over half of surface water bodiesStatus of freshwater bodies in the Danube River Basin District and Adriatic River Basin District
Note: Status of freshwater bodies in the Adriatic RBD and Danube RBD as reported under the Water Management Plan for the period 2023‑2027 (data cover 2014-2019). uPBTs: ubiquitous, persistent, bioaccumulative and toxic substances, i.e. mercury, brominated diphenyl ethers, tributyltin and certain polyaromatic hydrocarbons.
Source: Government of Slovenia (2023), Water Management Plan for the Adriatic and Danube River Basin Districts for the period 2023-27.
The Water Management Programme of Measures, updated7 in October 2023, provides a framework to achieve environmental objectives for both surface water and groundwater bodies, incorporating measures from the RBMPs for the Danube and Adriatic Rivers for 2023-2027. The third RBMPs were submitted a year and a half after the deadline, leaving their implementation to be assessed (EC, 2025[29]). The updated programme emphasises integrating climate change adaptation and mitigation across various measures. This involves planning for extreme weather events, promoting nature-based solutions and raising public awareness about climate change impacts on water management (GoRS, 2023[35]). Water permits should be periodically reviewed8 and updated to ensure the sustainable use of water resources, including ensuring minimum ecological flows, as water scarcity becomes a more pressing concern. Enhancing resilience of water supply would require clearer regulations on alternative sources, such as wastewater re-use.
Stronger measures are needed to address diffuse pollution from agriculture. The entire country is designated as a nitrate vulnerable zone and decrees impose mandatory minimum standards for water protection. The Court of Audit determined that measures to reduce nitrate pollution in groundwater between 2014‑2018 were only partially effective. Shortcomings related to lack of demonstrated effectiveness of measures, insufficient targeting and monitoring gaps (CoA, 2020[31]). The updated Water Management Programme of Measures includes actions to reduce excess nutrients and pesticides on water, mainly through promotion of good practices via education, training and agri-environmental payments under the CAP. Efforts should focus on the most polluted areas. Regulations on the use of pesticides were adopted in 2025, strengthening protection of water bodies (GoRS, 2025[36]). Nevertheless, agri-chemicals benefit from a reduced value-added tax rate, which could be phased out. Slovenia could also consider broadening the policy mix to address diffuse pollution, including through greater use of economic instruments to improve cost effectiveness and better reflect the Polluter Pays Principle.
Slovenia applies a variety of economic instruments for water management, targeting major users (OECD, 2023[37]). Revenue from these instruments fund water management objectives. A water permit fee applies to several types of water users but does not apply to permits for public water supply. The regulation on water abstraction permits was updated in 2025. Consequently, the permit fee is based on the maximum volume that can be abstracted in the permit rather than a fixed annual payment. This is a positive development to better reflect the opportunity cost of the water allocated. Water abstraction charges are also in place for most types of water use, including drinking water supply, hydropower, cooling thermal power plants, irrigation, public swimming pools and natural spas, with the highest rates applying to electricity production. A wastewater tax also applies to municipal and industrial wastewater discharges. The tax base is calculated based on pollutant loads. The tax burden is reduced for municipal wastewater, up to 90% for discharges to a sewage system with secondary wastewater treatment and 40% for those with primary treatment (GoS, 2012[38]). Revenues from the wastewater tax declined by 48% between 2012 and 2024 in real terms (OECD, 2026[39]), a reflection of expanded wastewater collection and treatment, and less environmental pollution from municipal wastewater.
A highly fragmented WSS sector limits performance and investment capacity
The water supply and sanitation (WSS) sector is highly fragmented. There are nearly 100 water utilities, 80% of which serve about a quarter of the population. This leads to high costs of service provision and affordability pressures in small municipalities. A robust framework for monitoring utility performance has been lacking. Water losses in public water supply are relatively high and have increased over 2013‑2023, reaching 30% of the total abstracted for public supply (Figure 1.7, panel B). High water losses arise from ageing infrastructure and deferred maintenance; this may also point to potential issues with utility performance. These factors underscore the need for greater investment to improve and maintain public water infrastructure. Slovenia does not have an independent economic regulator for WSS services. Local governments are required to follow a national tariff-setting methodology and are responsible for ensuring service quality and appointing management for water utilities. Drinking water quality is generally good, although e.coli contamination is an issue in some small municipalities.
The 2025 Act on drinking water and urban wastewater introduces key reforms
In 2025, Slovenia adopted the Drinking Water Supply and Urban Wastewater Collection and Treatment Act, strengthening the legal framework for public WSS services. In addition to providing the statutory basis for the constitutional right to water (GoRS, 2025[40]), the law enhances national oversight of the sector, including a centralised information system to report on efficiency of public service delivery. It also provides a more robust basis for sustainable cost recovery and requires incorporating state-of-the-art climate data and projections into the planning, construction and maintenance of WSS infrastructure. The law also prohibits profit-making concessions and requires their revocation within five years. Municipalities relying on private concessions will need to set up public entities to manage the service.
The adoption of the law is a key development that should strengthen the sector’s performance and improve its transparency and accountability. However, Slovenia should ensure that adequate resources (funding and technical capacity) are available to ensure effective implementation of the new legal provisions.
Slovenia has expanded wastewater treatment but does not yet comply with the UWWTD
Slovenia has significantly expanded wastewater collection and treatment. The share of population connected to urban wastewater treatment rose from around half of the population in 2012 to nearly 70% in 2023. Still, the country remains among the OECD Members with the lowest share of the population connected to urban wastewater treatment. Individual or other appropriate systems (IAS) manage 7% of the wastewater load (approximately 112 300 population equivalent). These non-centralised systems operate in 120 agglomerations, reflecting the country’s dispersed settlement pattern.
Despite progress, Slovenia is one of the EU’s poorest performers in terms of compliance with the EU Urban Wastewater Treatment Directive (UWWTD) (WISE, 2025[41]). The overall compliance rate in 2020 was just under 60%, below the EU average of 76%. There are notable regional disparities, with Vzhodna (East Slovenia) achieving much higher compliance rates than Zahodna (West Slovenia) (Figure 1.6, panel B). Between 2016 and 2020, the country progressed towards the targets for the collection of urban wastewater; biological treatment and nitrogen (N); and phosphorus (P) removal. In Ljubljana, most wastewater (89%) receives secondary treatment, 7% is treated by IAS and only 3% receives more stringent treatment with N and P removal, although the city is subject to Article 5 (WISE, 2025[41]). In November 2023, the European Court of Justice ruled that the country was in breach of the UWWTD due to failure to treat all collected wastewater in Ljubljana (EC, 2025[29]). Closing the urban wastewater treatment compliance gap is a pressing priority: the revised UWWTD entered into force on 1 January 2025 with stricter requirements to improve sustainability and environmental outcomes.
Figure 1.6. Slovenia lags behind other EU countries in complying with the Urban Wastewater Treatment Directive
Copy link to Figure 1.6. Slovenia lags behind other EU countries in complying with the Urban Wastewater Treatment Directive
Note: Proportion of urban wastewater that meets all UWWTD requirements (collection, biological treatment, biological treatment with nitrogen and/or phosphorus removal).
Source: EEA (2024), Waterbase Urban Wastewater Treatment Directive Reported data.
Significant investment in water infrastructure is needed to reach compliance and water management objectives
Investment in water supply and wastewater infrastructure has increased in recent years (Section 1.3.2) and annual investment per capita in 2023 was well above the EU average (Figure 1.7, panel C). However, the scale of investment required to implement the Water Management Programme of Measures is significant. For 2021‑2027, the estimated costs for municipal wastewater discharge and treatment reach nearly EUR 1 billion and an additional EUR 620 million is needed to improve drinking water supply. In addition, EUR 64‑101 million is allocated to ensure the favourable status of water-dependent species and habitats in Natura 2000 areas (GoRS, 2023[35]).
Multiple sources provide funding for the programme, including the Water Fund, EU Cohesion Fund, state and municipal budgets, and the Recovery and Resilience Plan. While Slovenia has strengthened the legal basis for sustainable cost recovery, the average price of drinking water is relatively low compared to other EU countries (Figure 1.7, panel A). In addition, there remains a mismatch between high investment needs, and technical and financial capacity, especially for small municipalities. Recovering the costs of water services is a prerequisite for financing the sector. Slovenia performs relatively well compared to other EU countries in recovering the costs of water supply, wastewater collection and treatment, although there is scope for improvement (EC, 2021[42]). A clear and realistic financing strategy is needed to ensure compliance with UWWTD requirements and meet water management goals.
Figure 1.7. Slovenia needs to mobilise significant investment for wastewater infrastructure
Copy link to Figure 1.7. Slovenia needs to mobilise significant investment for wastewater infrastructure
Note: Panel A: tariff comparison based on a water consumption of 15 m3 per month. Panel C: general government investment according to the COFOG classification (05.2 and 06.3). Panel D: investment for the renewal, upgrade or replacement of urban wastewater infrastructure as indicated in the Slovenian Operational Programme for the discharge and treatment of municipal wastewater. Measures outside the agglomerations refer to individual systems, i.e. plants with a capacity of less than 50 PE, or septic tanks complying with regulations for municipal wastewater treatment.
Source: GoRS (2020), The Operational Programme for the Discharge and Treatment of Municipal Wastewater; EC (2025), Environmental Implementation Review, Country Report – Slovenia; Eurostat (2025), General government expenditure by function – COFOG; IBNET (2025), Tariff Dashboard.
1.2.4. Waste management and circular economy
Recycling is high, but municipal waste generation continues to rise
In 2023, recycling and composting in Slovenia together accounted for over 70% of municipal waste treatment (Figure 1.8), the highest rate in the EU. Slovenia is on track to meet the targets of recycling 55% of municipal waste and 65% of packaging waste by 2025, as well as landfilling less than 10% of municipal waste by 2035 (EC, 2023[43]). However, with only 31% of waste electrical and electronic equipment collected in 2023, it has not reached the 2021 target of 65%. Municipal waste generation has increased over the last ten years. In 2023, for the first time, Slovenia generated more municipal waste than the EU average (517 vs. 511 kg/capita), partly due to the increase in bulky waste from the floods (SURS, 2024[44]; Eurostat, 2025[45]).
Figure 1.8. Municipal waste recycling has improved, but generation continues to rise
Copy link to Figure 1.8. Municipal waste recycling has improved, but generation continues to rise
Note: Municipal waste: household and similar waste collected by or for municipalities, originating mainly from households and small businesses. Includes bulky waste and separate collection. “Other disposal”: mostly incineration without energy recovery.
Source: OECD (2025), OECD Environment Statistics (dataset); SURS (2025), SiStat (dataset).
Slovenia’s progress on recycling has been driven by a combination of a widespread separate collection system for paper and cardboard, metals, plastics, glass and bio-waste; a landfill tax (2000); and a landfill ban for biodegradable waste (2011) (EEA, 2025[46]). The country also has a pay-as-you-throw system covering the entire population. The price is based on the volume of waste containers and the frequency of collection or, more rarely, the actual weight.
As recommended in the previous review (OECD, 2012[16]), Slovenia adopted waste management plans (2016, 2022) and strengthened the waste information system. Reform of the extended producer responsibility system (EPR) aims to better apply the Polluter Pays Principle, among other goals (Government Office for Legislation, 2025[47]). The system lacks transparency and oversight, resulting in households bearing most of the costs of municipal packaging waste management (Berger et al., 2023[48]).
Introducing advanced EPR fee modulation, as planned, would encourage use of recyclable and reduced packaging. Slovenia has a voluntary deposit refund system (DRS) for some reusable beverage containers (glass, plastic), but their market share is limited (Wilcox and Mackenzie, 2021[49]). A law proposing a DRS for single-use plastic bottles and cans is under discussion (National Assembly, 2025[50]). The law could increase the quantity and quality of collected materials. However, Slovenia should establish methods for arbitration between producers, the DRS operator and existing producer responsibility organisations to address overlaps or compensation for services rendered (Laubinger et al., 2022[51]). Setting quotas for reusable beverage containers put on the market, as in Austria, would support waste reduction (OECD, 2026[52]).
Slovenia’s circular material use rate remains below the EU average (10% vs.12% in 2024), likely due to the higher share of non-metallic minerals in its domestic material consumption (Eurostat, 2024[53]). In 2018, the country developed a Roadmap towards the circular economy (CE), giving priority to the food system, forest-based value chains, manufacturing industry and mobility (ETC CE, 2024[54]). It has not yet set specific targets on CE. The Podravje region, and the cities of Maribor and Ljubljana, also adopted CE strategies. Slovenia amended the green public procurement regulation to integrate CE requirements. Other initiatives include “Decarbonising Slovenia: The Deep Demonstration of a Circular, Regenerative and Low-Carbon Economy”, which has promoted CE in the built environment and the food value chain; and the Slovenian Centre for Circular Economy, which connects businesses, research institutions, the public sector and civil society to implement circular solutions. Their results remain to be assessed.
1.3. Promoting investment and economic instruments for green growth
Copy link to 1.3. Promoting investment and economic instruments for green growthSlovenia’s investment rate has been catching up with the EU average since the second part of the 2010s. This increase has been driven by the closure of the EU 2014-2020 Multiannual Financial Framework, the Recovery and Resilience Plan, and the 2023 post-flood reconstruction (IMAD, 2025[6]). In 2023‑2024, public investment (exceeding 5% of GDP) was among the highest in the EU (EC, 2025[55]).
Nevertheless, project appraisal, selection and management could be improved (IMF, 2024[56]; EC, 2025[3]). Co‑ordination between ministries to plan long-term public investments is limited. Projects are seldom appraised before budget allocation. Moreover, systematic external quality assurance to assess larger projects is lacking and ex post reviews are ad hoc.
1.3.1. Promoting a green economic recovery from the multiple crises
Effective use of EU funds is key for the green transition
Over 2021‑2027, Slovenia will benefit from EUR 6.6 billion9 in EU funding via the Recovery and Resilience Facility,10 the Cohesion policy11 and the CAP (MF, 2025[57]; EC, 2026[58]; EC, 2025[59]). Of this total, EUR 2.2 billion (about 3.5% of 2023 GDP) will be allocated to green measures.
Slovenia’s Recovery and Resilience Plan (RRP) comprises 48 investments and 36 reforms to be supported by EUR 1.6 billion in EU grants12 and EUR 0.5 billion13 in loans until 2026. Slovenia dedicated 45% of its RRP budget to climate objectives (Figure 1.9), exceeding the EU requirement of 37%. A large share of these funds is dedicated to upgrading railway infrastructure and reducing flood risks. The country added the REPowerEU to the RRP in 2023 to reduce dependence on fossil fuels. As part of this component, Slovenia scaled up investment for deployment of renewable energy, and for alternative fuels infrastructure in transport such as charging points for electric vehicles.
Figure 1.9. Slovenia’s recovery plan focuses on sustainable mobility and adaptation to climate change
Copy link to Figure 1.9. Slovenia’s recovery plan focuses on sustainable mobility and adaptation to climate change
Note: Panel A: a clean and safe environment: mainly reducing flood risks. Sustainable mobility: mainly increasing railway infrastructure capacity. Panel B: European Regional Development Fund and Cohesion Fund.
Source: EC (2026), Cohesion Open Data Platform; MF (2025), Fourth amendment to the RRP, December.
In December 2025, Slovenia had received more than 70% of its RRP allocations (EC, 2026[60]). Disbursements for the green transition reached only 41% of allocations, which was still above the EU average of 33%. Like other countries, Slovenia experienced delays in implementation. These delays were due to insufficient assessment of planned measures; lengthy public procurement and project preparation processes; supply-chain disruptions; unclear management responsibilities with the change in government and administrative reorganisation in 2022; and reporting deficiencies (CoA, 2025[61]). The government, the Ministry of Finance and the Recovery and Resilience Office have taken corrective measures, including to make public procurement more efficient (OECD, 2025[62]). The RRP was amended several times to improve its achievability (CoA, 2025[61]). Continued efforts are needed as investments are highly concentrated towards the end of the implementation period (EC, 2025[3]). The RRP could raise the level of Slovenian GDP by around 0.8% in 2026, when the effect would be the largest (GoRS, 2024[63]).
Slovenia decided on 76% of investments planned under the “Greener Europe” objective14 of the Cohesion policy for 2021‑2027 by December 2025, compared to an EU average of 62% by the same date (EC, 2026[58]). Sustainable water management and climate change adaptation – particularly flood risk reduction – accounted for more than half of the selected projects.
Slovenia adopted several programmes to address damage from the August 2023 floods (Chapter 2). The budget for reconstruction had reached EUR 1.2 billion by the end of September 2025 (GoRS, 2025[64]). This included investment transfers to municipalities, compensation for businesses and homeowners, river restoration and road repairs. In 2025, investment was expected to focus on water infrastructure (GoRS, 2025[65]). The rehabilitation efforts are expected to be completed within five years. The government plans to allocate an additional EUR 2.3 billion over 2025‑2028 (GoRS, 2025[66]). Expenditure is financed by the EU Solidarity Fund; a temporary increase in the corporate income tax rate; and a temporary bank levy.
Identifying and assisting people in energy and transport poverty remains challenging
Slovenia implemented various measures to mitigate the effects of high energy prices following the Russian Federation’s war of aggression against Ukraine. Related fiscal support was estimated at 3% of GDP in 2022‑2023 (Figure 1.10). The measures included energy tax reliefs; transfers to households and companies, including energy-intensive companies; compensation payments to suppliers for price caps on electricity and gas; and one-off payments to pensioners (OECD, 2024[1]). However, measures did not sufficiently target the most vulnerable groups (Figure 1.10). In addition to being costly, energy price support measures limit the incentive to save energy. With energy market prices stabilising, measures to mitigate rising energy costs were gradually phased out in 2024. The general government deficit declined from 2.6% of GDP in 2023 to 0.9% in 2024, mainly due to the reduced scope of intervention measures (Fiscal Council, 2025[67]).
Figure 1.10. Fiscal support during the energy crisis was mostly untargeted
Copy link to Figure 1.10. Fiscal support during the energy crisis was mostly untargetedGross fiscal costs of energy support measures, percentage of GDP, 2022-2023
Note: Support measures are considered targeted if their main beneficiaries are not “all households” or “all firms” or “all energy users”. The figure includes both price and income measures.
Source: OECD (2023), OECD Energy Support Measures Tracker (dataset).
Energy poverty has declined in the past decade, although progress has stalled in recent years (Figure 1.11). In 2024, 7% of households (about 110 000 persons) were energy poor according to Slovenian legislation, down from 11% in 2014. These include households at risk of poverty15 that are also financially unable to keep home adequately warm, to pay utility bills and/or live in inadequate housing conditions. With 3% of the population struggling to keep home warm, energy poverty in Slovenia is moderate compared to the EU average (9%) (Eurostat, 2025[68]).
Figure 1.11. The decline in energy poverty has stalled in recent years
Copy link to Figure 1.11. The decline in energy poverty has stalled in recent years
Note: According to the Slovenian definition (Ur. l. RS, No. 132/2022), energy-poor households are those with an income below the at-risk-of-poverty threshold in the year prior to the Living Conditions survey and that met at least one of the following criteria: they were financially unable to keep home adequately warm; to pay utility bills (waste disposal, water, electricity, heating, etc.) on time due to financial difficulties (in the last 12 months prior to the survey); and/or they had problems with leaking roofs, damp walls/floors/foundations or rot in window frames/floors in their dwellings (lived in inadequate housing conditions).
Source: SURS (2025), SiStat (dataset).
Living in inadequate housing conditions is the main factor contributing to energy poverty (SURS, 2025[69]). The issue is more prevalent in eastern regions than in western ones and affects single-person households, older people and single-parent families to a greater extent.
Since 2010, households benefitting from social support have been eligible for free energy advice. They can also receive grants from the Eco Fund16 (ZERO and ZERO500 programmes) for the full cost of thermal insulation and heating system replacement. These measures have helped increase the share of the population living in dwellings with improved energy efficiency (IMAD, 2025[6]). However, identifying and engaging beneficiaries remains challenging.
Slovenia has adopted an action plan to reduce energy poverty (GoRS, 2023[70]). It aims to i) reduce the share of energy-poor households to between 3.8-4.6%; ii) invest in energy efficiency and the use of renewables in at least 8 000 energy-poor households; and iii) achieve 573 GWh cumulative energy savings in energy-poor households over 2021-2030. The plan will be allocated EUR 33 million over 2024‑2027, mostly financed by EU funds.
Over 2021-2023, more than 1 000 measures were implemented in 793 energy-poor households representing about 10% of the 2030 target (MOPE, 2025[71]). Cumulative energy savings reached 46% of the planned value for this period. This highlights the need to strengthen the Eco Fund and develop support structures (regional advice points, awareness-raising networks) to better reach and assist those most in need.
In 2024, 2% of all Slovenians and 10% of people at risk of poverty could not afford a car. This is well below the EU averages of 6% and 16%, respectively (EC, 2025[3]). Public transport is highly affordable (Gabrovec et al., 2024[72]) but often inconvenient. While public transport is free for groups such as pensioners and subsidised for schoolchildren and students, it is often not frequent enough or else significantly slower than driving. Most employees are entitled to a commuting cost reimbursement. This takes either the form of the public transport fare or a generous lump sum per kilometre travelled, which encourages the use of private cars (Chapter 2).
Slovenia is developing a Social Climate Plan to monitor and reduce energy and transport poverty. The plan will be financed through revenues from the new EU Emissions Trading System (ETS2). Transport poverty affected around 3.5%17 of the population in 2023 (Gabrovec et al., 2024[72]). The National Energy and Climate Plan (NECP) aims to reduce the share of the population without satisfactory public transport from 20% to 10% by 2030 and to 0% by 2050.
1.3.2. Investment in environmental and low-carbon infrastructure
Spending on environmental protection has varied with programming periods of EU funds
After peaking at 1.1% of GDP in 2015, public environmental protection expenditure fell until 2017, then rose again to 0.9% of GDP in 2023 (Figure 1.12), slightly above the EU average of 0.8%. This reflects municipal investment efforts in wastewater treatment and the increase in government subsidies to reduce GHG emissions since the mid-2010s. The trend in spending on environmental protection is shaped by the absorption of EU funds, which accelerates at the end of programming periods.
Figure 1.12. Public investment in environmental protection has focussed on wastewater treatment, while businesses have invested in climate mitigation
Copy link to Figure 1.12. Public investment in environmental protection has focussed on wastewater treatment, while businesses have invested in climate mitigation
Note: Left panel: data refer to expenditure for environmental protection of the general government according to the COFOG classification and include subsidies and transfers paid to other sectors. “Pollution abatement” includes protection of air and climate; protection and remediation of soil, surface water and groundwater; noise abatement and protection against radiation. Right panel: Industry: NACE 2 categories B, C, D, E. “Other” includes protection and remediation of soil, surface water and groundwater, biodiversity and other environmental protection activities. 2024: preliminary data.
Source: OECD (2026), OECD National Accounts (dataset); SURS (2026), SiStat (dataset).
Slovenia estimates that an additional EUR 7 billion (11% of 2023 GDP) in investment is needed over 2021‑2030 to meet its 2030 climate targets (GoRS, 2024[73]). Of this, around EUR 2.2 billion is expected from the public sector for rail infrastructure, sustainable mobility and public buildings. The government plans to mobilise EUR 2.1 billion through environmentally related tax revenue (surcharges on both energy end-use efficiency and for promotion of renewable electricity generation and high-efficiency cogeneration, carbon tax and auctioning of EU ETS allowances) and EUR 2.7 billion from EU funds. This leaves an investment gap of EUR 2.2 billion. In 2025, Slovenia became the first EU country to issue a sustainability-linked sovereign bond tied to its 2030 climate target under its NECP (MOPE, 2025[74]). It raised EUR 1 billion through a ten-year bond whose rate depends on its performance in reducing GHG emissions.18
Slovenia has shifted investment from road to rail
Slovenia can be commended for the recent shift of investment from road to rail. In 2022‑2023, 51% of investment in transport infrastructure went to rail, up from 34% in 2016‑2017 (Figure 1.13). The country ranks among the leading EU countries in terms of length of road and rail infrastructure per capita. However, the quality of infrastructure, especially related to rail, is among the lowest in the EU (IMAD, 2025[6]). The ongoing major railway investment projects are expected to moderate the growth of road traffic and help reduce GHG emissions.
Figure 1.13. Slovenia has shifted investment from road to rail
Copy link to Figure 1.13. Slovenia has shifted investment from road to railInvestment in transport infrastructure, 2016‑2023
Source: ITF (2025), Transport Infrastructure Investment and Maintenance Spending (dataset).
Transport and spatial planning are insufficiently integrated (Tiran et al., 2022[75]). Over the past two decades, residential development has often occurred in areas with limited access to public transport. The functional areas of large cities are increasingly expanding into suburban and peripheral areas. This is especially the case along the motorway network and in regions with well-developed road infrastructure connecting to key employment hubs (IMAD, 2025[6]). Slovenia needs to shift planning from mobility towards accessibility (Plevnik et al., 2025[76]).
1.3.3. Greening the system of taxes and charges
Fiscal policies could better integrate environmental goals
Together with taxing environmentally harmful activities and phasing out environmentally harmful subsidies, green budgeting was part of the 2022 coalition agreement (Fiscal Council, 2022[77]). The previous review had recommended green tax reform and the phase-out of environmentally harmful subsidies (OECD, 2012[16]). However, little progress has been made on these recommendations given the rise in energy prices following the Russian Federation’s war of aggression against Ukraine.
Slovenia has made progress on green budgeting. In 2018, the Ministry of Finance with support from other ministries and public stakeholders, analysed the environmental impact of 45 tax incentives, subsidies and other measures (MF, 2018[78]). It estimated that measures with positive impact amounted to EUR 282 million, while harmful measures totalled EUR 354 million in 2016, more than half of which was for the commuting allowance. The evaluation also helped develop and adopt a tagging methodology (MF, 2023[79]) and proposed avenues for reforming environmentally harmful support. The development of a green budgeting methodology and its implementation is also one of the milestones of Slovenia’s RRP. According to the Ministry of Finance, all projects and measures of the budget were expected to be screened and evaluated by 2025. However, it seems there are no plans to report on these results (EC, 2025[80]).
Revenue from environmentally related taxes decreased from 4.4% of GDP in 2015‑2016 to 2.8% in 2024 (Figure 1.14), remaining higher than the EU average (2% in 2023). As in most other countries, taxes on energy products, notably on road fuels, make up the bulk of revenue from environmentally related taxes. This is particularly true for Slovenia, which has heavy domestic and transit traffic, dispersed settlement and underdeveloped public transport (IMAD, 2024[81]). Transport fuel consumption has remained broadly stable since the mid-2010s, except for 2020 due to the COVID‑19 pandemic. The drop in revenue from environmentally related taxes was driven by fuel tax cuts until 2022 and the temporary suspension of the carbon tax between 2022 and 2023, in response to increasing energy prices. Revenue from such taxes rose slightly in 2024, driven by higher fuel tax rates and the near doubling of the carbon tax rate (to EUR 30.85/tCO2). Revenue from the carbon tax remains modest compared to that from fuel excise taxes.
Figure 1.14. Revenue from environmentally related taxes fell due to fuel tax cuts
Copy link to Figure 1.14. Revenue from environmentally related taxes fell due to fuel tax cutsRevenue from environmentally related taxes by tax base, 2010-2024
Carbon prices are not consistent across sectors and fuels
GHG emissions in Slovenia are priced through fuel excise taxes, a carbon tax and the EU ETS (OECD, 2025[82]). The fuel excise taxes arise from Slovenia’s energy tax (Trošarina na energente). This applies to specified uses of oil products, natural gas, and coal and coke consumption; a strategic stockpile on gasoil used for heating purposes; a surcharge on energy end-use efficiency; and a surcharge for the promotion of electricity generation from renewable energy sources and high-efficiency cogeneration. The carbon tax applies to certain fuel uses on top of the energy tax.
With an average effective carbon rate (ECR) of EUR 89 per tonne of CO2 in 2023, Slovenia was on par with the EU average. However, despite higher permit prices, this rate dropped by 9% over 2021‑2023 (Figure 1.15), more than in most EU countries. This drop was due to the cut in fuel tax rates and the temporary suspension of the carbon tax, weakening incentives to reduce GHG emissions.
While the increase in the carbon tax rate in 2024 is welcome, Slovenia still needs to plan for gradual and predictable increases in carbon prices to achieve its climate goals. A linear increase to EUR 140 per tonne of CO2 by 2030 would reduce GHG emissions and have a relatively small negative impact on Slovenian GDP (IMAD, 2024[81]). Recycling higher revenue to reduce the tax burden on labour, and to support low-carbon investment and vulnerable groups, would ensure economic growth and sustainable development (IMAD, 2025[6]).
In 2023, carbon prices covered about 80% of GHG emissions and nearly 70% were priced at an ECR above EUR 60 per tonne of CO2, the midpoint benchmark for carbon costs in 2020 (OECD, 2026[83]). However, ECRs do not provide consistent incentives across sectors and fuels. Most emissions from road transport, electricity and industry were priced at over EUR 60 per tonne of CO2 in 2023, However, emissions from buildings, agriculture and other GHGs – methane and nitrous oxide – faced lower prices (Figure 1.15).
The tax gap between diesel and petrol has narrowed over the past decade. However, in 2024, petrol was more taxed than diesel, which continues to benefit from multiple tax reliefs (see below). Industrial emissions are mostly priced through ETS permit prices. However, the heterogeneity in rates of fuel excise and carbon taxes does not provide incentives to switch to less carbon-intensive fuels in the sector: natural gas, while less carbon intensive, faces higher fuel excise and carbon tax rates than coal and non-renewable waste; coal either faces a reduced rate or is exempt of carbon tax, and non-renewable waste is exempt (OECD, 2025[82]). While the EU ETS2 will raise carbon prices in buildings and road transport, the Climate Act provision to automatically cut excise duties to offset higher carbon prices is causing concern (Climate Council, 2025[84]).
Figure 1.15. Over 2021‑2023, carbon prices fell significantly
Copy link to Figure 1.15. Over 2021‑2023, carbon prices fell significantlyAverage effective carbon rates, by sector, Slovenia, 2021 and 2023
Note: Effective carbon rate is the sum of prices from the carbon tax, fuel excises and ETS permits without considering free allocations of allowances in the EU ETS. Excludes emissions from the combustion of biofuels. Other GHG emissions: methane, nitrous oxide, F-gases and process CO2 emissions excluding land-use change and forestry.
Source: OECD (2026), Carbon Pricing and Energy Taxation (dataset).
Slovenia needs a clear plan to phase out fossil fuel subsidies
Slovenia’s updated NECP aims to phase out fossil fuel subsidies by 2030. However, it lacks specific milestones to achieve this goal, which has not been enshrined in the Climate Act (Climate Council, 2025[84]). Slovenia supports oil consumption through tax expenditures such as the partial refund on excise duty for diesel used in commercial transport and stationary motors, reduced rate for diesel used in agricultural and forestry machinery, and exemptions for aviation and navigation (Figure 1.16). It supports coal through tax reductions and exemptions in some energy-intensive industries. Since 2025, it has also supported operation of the Šoštanj coal-fired thermal power plant and the Velenje coal mine (EUR 403 million over 2025‑2027) (Chapter 2) (EC, 2025[3]). The country also encourages the use of natural gas in combined heat and power plants through feed-in-tariffs. In 2023, budgetary transfers exceeded tax expenditure with business subsidies to compensate for high electricity and gas prices. These temporary measures increased support for fossil fuels from 0.2% of GDP in 2021 to 1.8% in 2023 but were gradually phased out in 2024.
Figure 1.16. Fossil fuel support increased during the energy crisis
Copy link to Figure 1.16. Fossil fuel support increased during the energy crisisFossil fuel support by fuel type, 2010-2024
Source: OECD (2026), "Fossil Fuel Support – Slovenia", OECD Fossil Fuel Support Portal (dataset).
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Notes
Copy link to Notes← 1. A multidimensional measurement framework used by the Institute of Macroeconomic Analysis and Development of the Republic of Slovenia to monitor implementation of the country’s Development Strategy.
← 2. The Habitats Directive (92/43/EEC) protects habitats and species of Community interest, i.e. which are threatened to disappear in the European Union, have a small natural range or present outstanding examples of typical characteristics of Europe’s biogeographical regions.
← 3. Gradual transformation of grasslands into forests.
← 4. Facing natural or other specific constraints.
← 5. Nature-based forest management (NBFM) considers forests as complex ecosystems; advocates management based on natural processes; attempts to integrate many forest functions at small spatial scales; and applies variable management approaches, most commonly low-impact harvesting, which means minimising negative impacts on regeneration, the remaining stand and whole forest ecosystem. Special emphasis is placed on maintaining the integrity of forest microclimate and soil; thus clear-cutting, intensive soil preparation and the use of fertilisers and herbicides are generally avoided. NBFM is synonymous with continuous cover management in Atlantic Europe, close-to-nature management in Central Europe and forest ecosystem management in the United States. The proportion of forests where NBFM is practised ranges from a few percent in Portugal, Finland and Sweden to almost 100% in Switzerland, Slovenia and some German states where this approach is required by law.
← 6. In 2025, the Forest Fund (mainly financed by revenue from the sale of timber from state forests) allocated EUR 3 million to the management of Natura 2000 areas in private forests.
← 7. The Water Management Programme of Measures is subject to review and supplementation every six years, as mandated by Article 57 of the Slovenian Water Act.
← 8. In July 2024, the European Commission launched an infringement procedure against Slovenia for violating Article 11 of the WFD because it has not introduced periodic reviews of water permits and concessions (EC, 2025[29]).
← 9. Including grants and loans from the Recovery and Resilience Facility.
← 10. The deadline for disbursements under the Recovery and Resilience Facility is set for the end of 2026.
← 11. European Regional Development Fund, Cohesion Fund, European Social Fund Plus and Just Transition Fund.
← 12. Considering the 2022 downward revision of the Recovery and Resilience Facility, REPowerEU grants and Brexit Adjustment Reserve.
← 13. This amount was reduced from EUR 1.1 billion to EUR 0.5 billion in the fourth amendment to Slovenia’s RRP (December 2025).
← 14. European Regional Development Fund and Cohesion Fund investment in climate change mitigation and adaptation, environment and sustainable urban mobility.
← 15. With an equivalised disposable income (after social transfers) below 60% of the national median.
← 16. The Eco Fund provides loans and grants for environmental and climate-related investments, financed primarily through energy end-user fees and emissions allowance revenues.
← 17. Living below the at-risk-of-poverty threshold and lacking access to an adequate public transport service.
← 18. The bond links its final coupon to Slovenia’s 2030 climate target under the National Energy and Climate Plan, which aims to cut GHG emissions by 35‑45% by 2030. If Slovenia fails to meet the minimum 35% reduction, the interest rate will rise by 50 basis points; if it achieves the 45% target, the rate will drop by 50 basis points.