Competitiveness in the Western Balkans and the Second Imperative of the EU Competitiveness Compass – Energy and Decarbonisation

Project duration: May 2025 - March 2026

Call/Program/Scheme: Direct service contract

Client / Financier: Joint Research Centre of the European Commission (JRC)

Participating institutions: Institute of Economic Sciences, Belgrade

Principal investigator (PI): dr Lazar Živković, Institute of Economic Sciences, Belgrade

The role of IEN in the project: IEN is a lead institution

IEN project team (manager/coordinator, team members):

dr Lazar Živković (coordinator)
dr Dijana Štrbac
dr Petar Mitić
dr Isidora Ljumović

Description:

The project addresses the need to better understand how the energy transition and decarbonisation agenda affect the competitiveness of Western Balkan economies, framed within the second pillar of the EU Competitiveness Compass - Energy and Decarbonisation. The main goal is to identify key challenges and opportunities, including the identification of energy-intensive industrial sectors most affected by energy price volatility and supply shocks, providing evidence-based insights for policymakers, and supporting more effective alignment with EU competitiveness and green transition priorities.

The methodological approach combines analysis of energy systems, emissions and industrial structures with a review of relevant policy frameworks. It is complemented by primary data collection through survey and semi-structured interviews with stakeholders from government, industry, academia and civil society. The analysis focuses on identifying structural barriers, investment needs and policy gaps, as well as vulnerabilities in key sectors and opportunities for strengthening competitiveness through decarbonisation.

The main output is a comprehensive analytical report, prepared for the Joint Research Centre, which assesses the state of energy transition and its implications for competitiveness in the Western Balkans. The report provides targeted policy recommendations and identifies priority actions for aligning decarbonisation goals with economic resilience.

Keywords: energy transition, decarbonisation, competitiveness, Western Balkans, energy-intensive industries