Energy transition in the Western Balkans

The Western Balkans are entering the energy transition under structurally more demanding conditions than most EU Member States. High carbon intensity, ageing energy infrastructure, and continued reliance on coal and hydropower intersect with increasing pressures stemming from EU climate policy, market integration, and the introduction of the Carbon Border Adjustment Mechanism. This report examines the implications of decarbonisation for competitiveness, energy security, and economic development across the Western Balkans. Drawing on quantitative indicators and qualitative evidence, the analysis highlights structural characteristics of regional energy systems and identifies key barriers to the effective implementation of the transition. The findings indicate that while renewable energy deployment is accelerating, progress is constrained by outdated grid infrastructure, limited institutional capacity, and restricted access to finance. The report concludes that successful decarbonisation will depend on strengthening implementation capacity, mobilising large-scale investment in energy infrastructure, and aligning energy transition policies with broader competitiveness and place-based transformation strategies. Based on these findings, the report outlines a set of policy recommendations aimed at strengthening institutional capacity, accelerating grid modernisation, and improving access to financing mechanisms that can support a sustainable and competitive energy transition in the region.