Private sector at the core: Montenegrin employers lead the dialogue on just transition

Podgorica (ILO News)- On 8 December, the Montenegrin Employers Federation (MEF) hosted a high-level event to launch a national dialogue on Montenegro’s green transition, drawing on an Assessment of Nationally Determined Contributions (NDC)—the first comprehensive review of the country’s climate commitments from a business perspective. The event was organized with support from the International Labour Organization (ILO) under the ILO–GIZ project Promoting Social Dialogue on Just Transition Issues.

The NDC Assessment highlights that Montenegro has set an ambitious course for its climate future, committing to a 55 per cent reduction in greenhouse gas (GHG) emissions by 2030 under its NDC 3.0. This aligns the country with European Union objectives and signals a fundamental shift in its economic trajectory. However, the assessment reveals a clear gap between this high-level ambition and the private sector's current capacity to deliver it. Montenegro’s transition to a low-carbon economy hinges on the active participation of its private sector, particularly the micro, small and medium-sized enterprises (MSME)s. Yet their role in the country’s climate transition has been overlooked.

© ILO

© ILO

The Core Challenge: An Implementation Gap

A business survey conducted to inform this assessment reveals a critical disconnect: 97% of enterprises were not consulted during the preparation of NDC 3.0. This exclusion has contributed to a regulatory and policy framework that does not sufficiently reflect business realities, creating three primary categories of barriers for MSMEs:

1. Informational: Only 12% of surveyed enterprises are fully familiar with the NDC, and 57% report that available information on climate obligations and opportunities is unclear or insufficient. Nearly half (48%) cite limited internal capacities as the main obstacle to preparing for the green transition.
2. Financial: More than half of enterprises (53%) identify limited access to affordable green finance as a critical constraint. While the Eco-Fund represents a step forward, its resources remain insufficient, and commercial lending for climate projects is perceived as high-risk.
3. Institutional: The slow adoption of strategic documents such as the National Energy and Climate Plan (NECP) and delays in the amendment of the Law on Climate change, combined with complex permitting procedures, create uncertainty. High compliance costs disproportionately affect MSMEs, with 35% citing these as a major obstacle.

© ILO

© ILO

The business imperative: Competing in a decarbonising Europe

As Europe accelerates its green agenda, Montenegrin enterprises face both heightened risks and new opportunities. Key transition risks include exposure to the EU’s Carbon Border Adjustment Mechanism (CBAM), exclusion from EU supply chains, and rising carbon-related costs. At the same time, the transition offers significant opportunities in renewable energy, energy-efficiency upgrades, and the creation of green jobs and services across sectors such as energy, tourism, agriculture, construction and transport.

Key Recommendations for action

To close the implementation gap, the assessment proposes the following targeted interventions:

For the Government of Montenegro:

• Establish a Climate Council, potentially as a specialized body under the Tripartite Social Council, to ensure that the private sector is formally consulted on the implementation of the current NDC and the preparation of all future updates.
• Ensure a predictable and enabling business environment by accelerating the adoption of key climate and energy legislation and policies and simplifying administrative procedures.
• Expand access to green finance by mandating the Eco-Fund to launch credit-guarantee schemes and other de-risking mechanisms for MSME investment.

© ILO

© ILO

For MEF and the Business Community:

· Lead evidence-based advocacy by presenting clear positions supported by data aggregated from member companies.

· Provide direct support to members by establishing a Green Transition Helpdesk and offering training and consultancy to build long-term enterprise capabilities.

A shared commitment: Social dialogue at the heart of just transition

At the event, a panel including Minister of Ecology, Sustainable Development and Northern Region Development, the Director of Eco-Fund, the President of MEF, the President of the Pljevlja Coal Mine Trade Union, and climate experts engaged in constructive discussions based on the assessment’s findings. All parties agreed to strengthen engagement with social partners, recognising that social dialogue remains essential to addressing the green transition effectively. Notably, the Minister expressed agreement with the report’s recommendations and confirmed readiness to work more closely with MEF and trade unions on the implementation of NDC 3.0. Link to the report in MNE.

Link to the report