Updated Nationally Determined Contribution for Montenegro (NDC 2025)

1. Quantifiable information on the reference point (including, as appropriate, a base year) 1(a) Reference year(s), base year(s), reference period(s) or other Base year: 1990 starting point(s); 1(b) Quantifiable information on the reference indicators, their Quantification of the reference indicator will be based on national greenhouse gas (GHG) values in the reference year(s), base year(s), reference totals reported in the National Inventory Report of Montenegro in the Biennial Transparency period(s) or other starting point(s), and, as applicable, in the Reports (BTR). target year; 1(c) For strategies, plans and actions referred to in Article 4, Not applicable paragraph 6, of the Paris Agreement, or polices and measures as components of nationally determined contributions where paragraph 1(b) above is not applicable, Parties to provide other relevant information; 1(d) Target relative to the reference indicator, expressed Economy-wide net domestic reduction in GHG emissions of at least 55% by 2030 and 60% by numerically, for example in percentage or amount of 2035, compared to 1990 levels. reduction; 1(e) Information on sources of data used in quantifying the The source of data used in quantifying the base year is the latest available national GHG reference point(s); inventory. Quantification of the reference indicator will be based on data reported in the National Inventory Report submitted in the BTRs. 1(f) Information on the circumstances under which the Party may Values may be updated due to methodological improvements to the national GHG inventory. update the values of the reference indicators.

2. Time frames and/or periods for implementation 2(a) Time frame and/or period for implementation, including start 01 January 2025 – 31 December 2035 and end date, consistent with any further relevant decision adopted by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA). 2(b) Whether it is a single-year or multi-year target, as applicable. Multi-year target, 2030 and 2035 February 2025 Para Guidance provided by CMA 1 ICTU applicable to the Montenegro’s NDC

3. Scope and coverage 3(a) General description of the target; The target is an economy-wide target of a net domestic reduction of GHG emissions by at least 55% and 60% compared to 1990 by 2030 and 2035 respectively, without contribution from international credits. 3(b) Sectors, gases, categories and pools covered by the nationally Further details will be provided in accordance with IPCC guidelines in the Biennial determined contribution, including, as applicable, consistent Transparency Reports. with Intergovernmental Panel on Climate Change (IPCC) Sectors covered: guidelines; Energy Industrial processes and product use (IPPU) Agriculture Waste Land Use, Land Use Change and Forestry (LULUCF) (see Para 5e for further information on this sector). Gases: Carbon Dioxide (CO2) Methane (CH4) Nitrous Oxide (N2O) Hydrofluorocarbons (HFCs) Perfluorocarbons (PFCs) Sulphur hexafluoride (SF6) Nitrogen trifluoride (NF3) 3(c) How the Party has taken into consideration paragraph 31(c) Montenegro’s NDC is economy-wide and therefore complies with this provision. and (d) of decision 1/CP.21; All source and sink categories have been included as per the latest national GHG inventory. Notation keys have been used in accordance with the IPCC 2006 Guidelines (Volume 1) and paras. 31 and 32 of the Decision 18/CMA.1 Modalities, procedures and guidelines for the transparency framework for action and support referred to in Article 13 of the Paris Agreement. 3(d) Mitigation co-benefits resulting from Parties’ adaptation Not applicable. actions and/or economic diversification plans, including description of specific projects, measures and initiatives of Parties’ adaptation actions and/or economic diversification plans. February 2025 Para Guidance provided by CMA 1 ICTU applicable to the Montenegro’s NDC

4. Planning processes 4(a) Information on the planning processes that the Party Montenegro operates under a parliamentary political system and is divided into 25 political- undertook to prepare its nationally determined contribution territorial units known as municipalities, each responsible for local governance. and, if available, on the Party’s implementation plans, In the process of updating the NDC previous, during and after the technical assessments, including, as appropriate: three rounds of consultations were organised before adoption of the NDC by the government with the following national partners and stakeholders: • The Ministry of Ecology, Sustainable Development, and Northern Development, in charge of climate governance with the Directorate for Climate Change and Sustainable developement playing a central role in policy adoption, implementation, and monitoring. • The Environmental Protection Agency (EPA), under the same ministry, which plays a key role in establishing the greenhouse gas (GHG) emissions inventory and projections. • Ministry of Energy who is mandated to elaborate the National Energy and Climate Plan to achieve strategic goals by 2030 and transition to a low-carbon economy by 2050. • Institute of Hydrometeorology and Seismology that has competencies in meteorology, climatology, hydrology, hydrography, oceanography and seismology and is responsible for most of the physical climate data tracking and analysis of climate scenarios. • Ministry of Economic Development that oversees industrial policies, economic recovery programmes, and green economy development. • The Statistical office (MONSTAT), the municipalities and other sectoral line ministries such as Ministry of Agriculture, Forestry and Water management, Ministry of Transport, Ministry of Internal Affairs. • The National Council for Sustainable Development (NSOR) in which members of the workforce are appointed from state administration authorities responsible for certain sectors, local administration, scientific, professional, public and other workers, employers' associations, representatives of civil society associations operating in the field of climate change, independent experts and youth representatives. NSOR’s working groups focus on areas such as policy implementation, climate change mitigation, just transition, and sustainable development at both local and national levels. The updated NDC is based on analysis of historic GHG emission trends, and an impact assessment of mainly existing mitigation measures. The updated NDC has been shared and discussed with stakeholders and comments have been taken into account. The updated NDC for both 2030 and 2035 targets has also been approved by the government and streamlined with the policies and measures of the integrated National Energy and Climate Plan (NECP). February 2025 Para Guidance provided by CMA 1 ICTU applicable to the Montenegro’s NDC Different policies and measures have been set in the last decade, allowing Montenegro to develop and agree on its updated NDC commitment. Montenegro adopted a by-law allowing the country to participate in the EU ETS from 2025 onwards. The Law on the Protection against the Negative Effects of Climate Change entered into force in 2019, mandating the development of a GHG inventory, a low-carbon development strategy, a national system of MRV and a national ETS covering emissions from the industrial and power sectors. The 2020 Decree on activities that emit greenhouse gases for which a permit for the emission of greenhouse gases includes provisions for banking allowances. Additionally, Montenegro has adopted the 2021 Decree on aviation activities for which a monitoring plan is not submitted, a 2021 Rulebook on the form of the permit for the GHG emissions, a 2021 Rulebook on the form, content and manner of verification of the report on GHG emissions and a 2022 Rulebook on the content of the plan for monitoring GHG emissions from the stationary plant and continues working in the establishment of a stable national system of carbon prices in accordance with EU policy requirements. (i) Domestic institutional arrangements, public participation The NDC is prepared in the context of Montenegro’s commitment to gender equality and and engagement with local communities and indigenous cross-cutting priorities, as articulated in commitments such as: the commitment to create and peoples, in a gender-responsive manner; maximise synergies between the social, environmental, and economic dimensions of sustainable development; integrating the dimensions of human rights and gender equality into the national plans and strategies; and the Montenegro’s support for adoption of the United Nations Declaration on the Rights of Indigenous Peoples. Montenegro aims to achieve gender-balanced participation and encourage the full, equal, effective and meaningful participation and leadership of women and youth at all levels of climate action and decision making. The country will also continue to support their meaningful engagement in climate change decision-making processes, as well as climate education and training, and increase public awareness on climate change. Montenegro welcomes the recognition by the UN Human Rights Council and General Assembly that the right to a clean, healthy and sustainable environment is a human right and will actively engage in discussions advancing this right and promote inclusion and non- discrimination. (ii) Contextual matters, including, inter alia, as appropriate: . Montenegro is located in southeastern Europe, occupying the southernmost part of the continent and forming part of Montenegro is located in Southeastern Europe, occupying the southernmost part of the continent and forming part of the Mediterranean region, known for February 2025 Para Guidance provided by CMA 1 ICTU applicable to the Montenegro’s NDC a. National circumstances, such as geography, climate, its natural beauty. The country is situated at the crossroads of two major geographical economy, sustainable development and poverty eradication; formations—the Dinaric Alps (Dinarides) and the Central Mediterranean—which results in a b. Best practices and experience related to the preparation of diverse and dynamic landscape. Covering an area of 13,812 km², Montenegro boasts a rich the nationally determined contribution; geological foundation, varied landscapes, diverse soils, and multiple climate zones, as recognized by the Convention on Biological Diversity. The country can be broadly divided into c. Other contextual aspirations and priorities acknowledged two main biogeographical regions: the Mediterranean and the Alpine, each hosting a wide range when joining the Paris Agreement; of ecosystems. Montenegro's water systems are split between two major drainage basins: the Adriatic Sea Basin and the Black Sea Basin. The Adriatic Basin is dominated by the Morača and Bojana rivers, with Lake Skadar serving as a vital freshwater resource. Meanwhile, the Black Sea Basin is drained by rivers such as the Tara, Lim, and Piva, which flow toward the Danube via the Drina River. Hydropower is the country’s most important energy resource and Montenegro is ranked high in terms of availability of hydropower resources. However, environmental protection requirements and seismic risks reduce its utilization. Montenegro is a service-based economy. The energy sector, comprising energy supply and consumption in the transport, residential and service sectors, has the highest share of 2022 net GHG emissions (45%) followed by LULUCF (41%), waste (6%), agriculture (4%) and IPPU (3%)2. Most of the energy industry emissions comes from the thermal power plant (TPP) Pljevlja which is the only coal-fired power station in Montenegro into service since 1982 with a generation capacity of 225 MW and produces a third of the country's electricity. Forests cover around 70% of Montenegro’s land area and represent a net sink. Montenegro has a number of instruments and initiatives directed at various aspects of green economy. The main driver behind the strengthening of climate policy and legislation has been the process of accession to the EU. Montenegro is among the group of UN member countries which have officially adopted a National Strategy for Sustainable Development until 2030, which follows the UN Agenda 2030. The development of Montenegro’s NDC represents a good practice in integrating national priorities for a country aspiring to join a regional bloc such as the European Union. The NDC has been prepared with careful consideration of Montenegro’s priorities as an EU accession 2 The share of sectoral emissions is calculated using the absolute value for the LULUCF. February 2025 Para Guidance provided by CMA 1 ICTU applicable to the Montenegro’s NDC country, while also reflecting its national circumstances as a developing country. Drawing inspiration from the EU experience and following ICTU guidance, Montenegro’s NDC focuses on the country’s mitigation contributions, while a separate submission has been prepared for adaptation. This approach highlights the critical importance of adaptation for Montenegro, aligning with both international reporting requirements and best practices within the EU.” 4(b) Specific information applicable to Parties, including regional The updated NDC targets for 2030 and 2035 will be fulfilled by Montenegro and is not part of economic integration organizations and their member States, regional joint agreement. that have reached an agreement to act jointly under Article 4, In 2007, Montenegro accessed the Energy Community Treaty (ECT), which allows the country paragraph 2, of the Paris Agreement, including the Parties to be an active member of the Regional and European Energy Market, obliging the state to that agreed to act jointly and the terms of the agreement, in align its national energy and climate related legislation with the community acquis. accordance with Article 4, paragraphs 16–18, of the Paris Montenegro is a candidate country to the EU and is currently implementing negotiation Agreement; chapter 27 on ’Environment and Climate Change’. The chapter has been opened in December

2018. Further efforts are being set up to align with the EU2030 climate and energy policy framework. A National Energy and Climate Plan (NECP), as mandated by the EU Governance Regulation (EU 2018/1999), has been developed in alignment with the current NDC. While the NECP does not establish specific mitigation targets, it serves as a strategic framework for climate and energy policies, supporting the fulfilment of national commitments made prior to this NDC submission. In this context, this NDC submission and the NECP remain aligned in their policies and measures, technical assumptions, and national approaches to mitigation. 4(c) How the Party’s preparation of its nationally determined Montenegro participated in the Talanoa Dialogue during the COP24 in 2018 dedicated to raise contribution has been informed by the outcomes of the global global awareness for the necessary enhancement of NDCs by 2020. According to Article 14.2 stocktake, in accordance with Article 4, paragraph 9, of the of the Paris Agreement, the Conference serving as the Meeting of the Parties to the Agreement Paris Agreement; (CMA) shall undertake its first global stocktake in 2023 and every 5 years thereafter unless otherwise decided by the CMA. Montenegro NDC’s commitments will be considered in the Global Stocktake Reports. 4(d) Each Party with a nationally determined contribution under Not applicable. Article 4 of the Paris Agreement that consists of adaptation action and/or economic diversification plans resulting in mitigation co-benefits consistent with Article 4, paragraph 7, of the Paris Agreement to submit information on: February 2025 Para Guidance provided by CMA 1 ICTU applicable to the Montenegro’s NDC (i) How the economic and social consequences of response measures have been considered in developing the nationally determined contribution; (ii) Specific projects, measures and activities to be implemented to contribute to mitigation co-benefits, including information on adaptation plans that also yield mitigation co- benefits, which may cover, but are not limited to, key sectors, such as energy, resources, water resources, coastal resources, human settlements and urban planning, agriculture and forestry; and economic diversification actions, which may cover, but are not limited to, sectors such as manufacturing and industry, energy and mining, transport and communication, construction, tourism, real estate, agriculture and fisheries.

5. Assumptions and methodological approaches 5(a) Assumptions and methodological approaches used for Montenegro’s current approach to accounting is in accordance with methodologies and accounting for anthropogenic greenhouse gas emissions and common metrics assessed by the IPCC (see 5(d), below). removals corresponding to the Party’s nationally determined Montenegro has updated its GHG Emission Inventory and performed recalculations to contribution, consistent with decision 1/CP.21, paragraph 31, improve the quality of the resulting estimates. and accounting guidance adopted by the CMA; Consistent methodologies have been applied throughout the reported period (1990-2022), efforts have been made to apply country specific data and moving to higher Tier methods, and accuracy and completeness was increased – especially in the LULUCF sector. The accounting guidance included in Annex II of decision 4/CMA.1 has been used for accounting of anthropogenic emissions and removals. 5(b) Assumptions and methodological approaches used for Three GHG scenarios were developed to inform the NDC of Montenegro: a Without Measures accounting for the implementation of policies and measures or Scenario, a With Measures Scenario and a With Additional Measures scenario. These scenarios strategies in the nationally determined contribution; considered the impact of policies and measures in the future GHG emissions of the country. The scenarios were estimated from the latest GHG emission inventory available (1990-2022), in line with the 2006 IPCC Guidelines, and ensuring methodological consistency between the inventory, projections and policies and measures (PAMs). The PAMs considered in each scenario are listed below. Under the With Existing Measures (WEM) scenario, the following measures are included: ecological refurbishment of the Pljevlja Thermoelectric Power Plant February 2025 Para Guidance provided by CMA 1 ICTU applicable to the Montenegro’s NDC (TPP), carbon pricing for TPP, NDC renewable power plants and new renewable capacity, district heating in Pljevlja, development and implementation of an energy efficiency regulatory framework for buildings, increased energy efficiency in public buildings, financial incentives for citizens and private households to invest in energy efficiency, energy labeling and eco-design requirements for energy-related products, establishment and implementation of energy efficiency criteria in public tendering, implementation of energy efficiency measures in public municipal companies, utilities, and services, development of transmission and distribution networks to reduce losses, refurbishment of small hydroelectric power plants to enhance efficiency, promotion of electric vehicles, financial incentives for electric, plug-in hybrid, and full hybrid vehicles for both citizens and businesses, reduction of hydrofluorocarbons (HFCs) in line with the Law on Amendments to the Montreal Protocol on Substances that Deplete the Ozone Layer, reduction of bio-waste in municipal waste, and an increase in the sewerage system connection rate, targeting 93% by 2035. Under the With Additional Measures (WAM) scenario, additional policies and measures are considered, aligned with relevant EU legislation. These include industrial decarbonization, in line with the EU ETS and the Industrial Emissions Directive; sustainable transport, following CO₂ emission standards for vehicles, the Fit for 55 Package, and the Alternative Fuels Infrastructure Regulation; green buildings and enhanced energy efficiency, in accordance with the Energy Efficiency Directive (EED), the Energy Performance of Buildings Directive (EPBD), and the Renewable Energy Directive (RED); sustainable agriculture, as outlined in the Effort Sharing Regulation (ESR) and the Common Agricultural Policy (CAP); low-carbon refrigerants, aligned with the EU F-Gas Regulation; and enhanced waste management and circular economy measures, following the Landfill Directive, the EU Waste Framework Directive, and the Circular Economy Action Plan and the LULUCF Regulation. The scenarios developed are consistent with those reported in Montenegro’s first Biennial Transparency Report (BTR) as they were developed by the same team following the same methodologies and approaches, with the major exception that the NDC scenarios include the Land Use, Land-Use Change, and Forestry (LULUCF) sector. It should be noted that the estimated scenarios informed the decision on Montenegro’s NDC target; however, they do not constitute a commitment to the implementation of specific PAMs. February 2025 Para Guidance provided by CMA 1 ICTU applicable to the Montenegro’s NDC The PAMs for the implementation of the NDC will be further developed in the national policy framework as required. The accounting of policies and measures will be developed and monitored against the national GHG inventory, following the principles and good practices of IPCC Guidelines, and in line with the Modalities, Procedures and Guidelines of the Enhanced Transparency Framework of the Paris Agreement. 5(c) If applicable, information on how the Party will take into Not applicable. account existing methods and guidance under the Convention Montenegro’s NDC is an absolute, economy-wide net reduction in greenhouse gas emissions. to account for anthropogenic emissions and removals, in See 5 (d), below. accordance with Article 4, paragraph 14, of the Paris Agreement, as appropriate; 5(d) IPCC methodologies and metrics used for estimating Montenegro’s approach has been developed in accordance with the 2006 IPCC guidelines for anthropogenic greenhouse gas emissions and removals; GHG inventories, consistent with decision 18/CMA.1. Decision 5/CMA.3 also allows Parties to use the 2019 IPCC refinement on a voluntary basis and Montenegro has started using the refinement when it better reflects the national circumstances and improves the quality of the resulting estimates. The GHG emission inventory used to set the updated NDC is in compliance with the 2006 IPCC Guidelines and its 2019 Refinement. The Metrics used are the Global Warming Potentials on a 100 timescale in accordance with IPCC’s 5th Assessment Report (AR5). 5(e) Sector-, category- or activity-specific assumptions, Assumptions and approaches applicable to the LULUCF sector as a whole: the LULUCF sector methodologies and approaches consistent with IPCC guidance, emissions and removals estimates build on IPCC guidance, TACCC principles and existing as appropriate, including, as applicable: accounting rules. (i) Approach to addressing emissions and subsequent removals The target is accounted against the net GHG removals (emissions) occurring for: from natural disturbances on managed lands; LULUCF Categories: Emissions and removals occurring on reported categories of forest land, cropland, grassland, wetlands, settlements, other land, harvested wood products, other, (ii) Approach used to account for emissions and removals from atmospheric deposition and nitrogen leaching and run-off, including land use change between harvested wood products; these categories. (iii) Approach used to address the effects of age-class structure LULUCF Pools: Living biomass; Litter; Deadwood; Soil organic carbon in mineral soils; Soil in forests; organic carbon in organic soils ; Harvested wood products. LULUCF Gases: CO2, CH4, N2O. Variations on the carbon stock in forest is estimated based on the information of the Montenegro’s National Forest Inventory (NFI). February 2025 Para Guidance provided by CMA 1 ICTU applicable to the Montenegro’s NDC Living biomass increase has been estimated using increment data from the NFI. While there has only been one inventory cycle so far, increment estimates were derived based on increment borer measurements of sample trees. The following provides information relative to items i, ii and iii of paragraph 5(e): i) Emissions and removals are estimated using 2006 IPCC Guidelines without any special approach to exclude emissions or removals due to natural disturbances. ii) Harvested Wood Products are estimated based on the production approach (or approach B) of the 2006 IPCC Guidelines. Activity data have been derived from the FAOStat database on forestry production and trade statistics. iii) Age classes are taken into account implicitly in the estimation of the growth rates of the different species. 5(f) Other assumptions and methodological approaches used for (i) Not applicable. See 5(b) above. The NDC target is an absolute, economy-wide greenhouse understanding the nationally determined contribution and, if gas emissions reduction target. applicable, estimating corresponding emissions and removals, (ii) Not applicable including: (iii) Not applicable. The NDC target includes only forcers covered by IPCC guidelines (see (i) How the reference indicators, baseline(s) and/or reference Section 3 b). level(s), including, where applicable, sector-, category- or (iv) Not applicable activity-specific reference levels, are constructed, including, for example, key parameters, assumptions, definitions, methodologies, data sources and models used; (ii) For Parties with nationally determined contributions that contain non-greenhouse-gas components, information on assumptions and methodological approaches used in relation to those components, as applicable; (iii) For climate forcers included in nationally determined contributions not covered by IPCC guidelines, information on how the climate forcers are estimated; (iv) Further technical information, as necessary; 5(g) The intention to use voluntary cooperation under Article 6 of The accounting rules for international carbon markets under Article 6 of the Paris Agreement the Paris Agreement, if applicable. have not been set yet. Montenegro has not made any national decision on this issue yet but is striving to participate in the EU emission trading scheme from 2025 onwards.

6. How the Party considers that its nationally determined contribution is fair and ambitious in the light of its national circumstances February 2025 Para Guidance provided by CMA 1 ICTU applicable to the Montenegro’s NDC 6(a) How the Party considers that its nationally determined Montenegro’s at least 55% and 60% net reduction target by 2030 and 2035 is to be achieved contribution is fair and ambitious in the light of its national through domestic measures only, without contribution from international credits. circumstances; Montenegro’s NDC is both ambitious and fair as it takes into account the country specific national circumstances and emission reduction potential as well as the efforts made to date. The NDC submitted by Montenegro is fair and ambitious because it aims to secure significant reduction of its GHG emissions while satisfying the country’s need for economic development, allowing a feasible pathway for long-term decarbonisation. According to the IPCC 6th Assessment Report, global greenhouse gas emissions need to fall by about 43% below 2019 levels by 2030 to be on track for limiting warming to 1.5°C. The Montenegro’s “at least -55% and 60%” multi-year target is consistent with this level of reduction, building on the substantial emissions reductions achieved since the base year 1990. It should also be noted that Montenegro has already reduced net GHG emissions to 71.6% below 1990 levels in 2022, while emissions have risen by over 50% worldwide. In addition, Montenegro is on track on substantially exceeding its previous 2030 target. This NDC represents a progression of ambition compared to the previous NDC for the same timeframe. Montenegro is a developing country, highly vulnerable to the effects of the climate change. National GHG emissions represent only 0,002 % of global emissions (source: Edgar database, Join Research Centre) and the net per capita GHG emissions in Montenegro amounted in 2022 to 1.63 t CO2eq while in the EU27 this is 7.84 tCO2 eq per capita (source: Edgar database, Join Research Centre). Montenegro is committed to decouple GHG emissions from its economic growth and embark on a low emission development pathway. Regarding the costs of implementation, the mitigation effort required for Montenegro to achieve its NDC targets for 2030 and 2035 is estimated at €1,566,761,634. Additionally, the implementation of further policies and measures needed for EU accession by 2035, beyond the previously stated amount, is estimated at €1,258,683,319. 6(b) Fairness considerations, including reflecting on equity; Montenegro considers its update of the NDC from -35% compared to 1990 excluding LULUCF, to -55% in 2030 including LULUCF and -60% compared to 1990 to be achieved in 2035 ambitious and fair, as the country will have to ensure the implementation of mitigation measures, which require substantial investments, as well as mechanisms and awareness raising to ensure a just transition. February 2025 Para Guidance provided by CMA 1 ICTU applicable to the Montenegro’s NDC 6(c) How the Party has addressed Article 4, paragraph 3, of the The updated NDC target represent progression beyond the current NDC and reflects the Paris Agreement; highest possible ambition under consideration of the national circumstances. 6(d) How the Party has addressed Article 4, paragraph 4, of the Montenegro is a developing country Party and has hereby enhanced its NDC, which Paris Agreement; represents an economy-wide net and absolute emission reduction. Montenegro complies with this provision by having an economy-wide absolute target. 6(e) How the Party has addressed Article 4, paragraph 6, of the Not applicable. Paris Agreement.

7. How the nationally determined contribution contributes towards achieving the objective of the Convention as set out in its Article 2: 7(a) How the nationally determined contribution contributes Montenegro respects and supports the ultimate objective of the Convention and contributes towards achieving the objective of the Convention as set out in with its highest possible ambition, reflected in this updated NDC. its Article 2 7(b) How the nationally determined contribution contributes Montenegro considers its NDC to be in line with the objective of the UNFCCC and long-term towards Article 2, paragraph 1(a), and Article 4, paragraph 1, goals of the UNFCCC, the Paris Agreement and the EU, as explained in 6a, 6b and 7a. of the Paris Agreement.