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H.E. Jørn Eugen Gjelstad, Ambassador Of Norway To Serbia

Environmental And Strategic Imperative

I have a strong belief in the prospects of green transition in Serbia. Now is the time to step up the momentum and accelerate the change

Markets will push green transition and investments in green technologies, thus persuading Serbia to continue harmonising its environmental regulations with those of its European peers. This seems to be one of the most crucial lessons to be learned from the experience of the Nordic countries. This was the main topic of our interview with Norwegian Ambassador to Serbia H.E. Jørn Eugen Gjelstad.

If we compare the conference you hosted in cooperation with the Serbian Ministry of Mining and Energy in December last year and the new one scheduled to take place at Science and Technology Park Belgrade this month (November 2022), what do you see as the major changes that have happened in the meantime?

– The major change that has occurred is the energy crisis that has struck our continent. We have seen record-high electricity prices and an increased focus on energy and energy independence. It has become clear that shifting away from fossil fuels is not only an environmental imperative, but a necessity of strategic autonomy. This has always been the case, but rarely to the extent that it is now. The current crisis has underscored the urgent need for a variegated supply chain and more renewables in countries’ energy mix. In this regard, I was glad to hear Prime Minister Brnabić declare, for similar reasons, energy the main priority of the new government, with renewables representing a significant part of that priority.

Energy is indeed a hot political topic. To what extent does this help or hinder the transition to greener solutions?

– Major industrial transitions are always difficult and costly, but it is important to be clear that green transition is both a must and an opportunity. Strategic investments made today will pay off later and should not be considered as burdensome costs. It is a must primarily because all evidence points towards the catastrophic environmental consequences of inaction.

Moreover, in order to remain competitive in today’s global markets, both businesses and countries must invest in the future – and that future is undeniably green! We can already see this at the European level. The EU has clearly signalled its commitment to green transformation. And we know that the markets will follow suit. In the case of Serbia, the EU Carbon Border Adjustment Mechanism stands out as a key challenge for everyone. With this new carbon tax, it will be increasingly difficult to sustain export access to European markets if products are not aligned with these new environmental criteria. As Serbia continues to harmonise its environmental policies with those of its European counterparts, markets will drive the green transition, and consequently investments in green technologies will become more profitable than the alternatives. This transformative shift should not only be considered a necessary undertaking based on principles and standards, but should also be considered as being existential to the future of national economic interests and public health.

What further steps need to be taken in advancing the green agenda and improving resilience in the energy sector?

– Firstly, I would like to acknowledge that Serbia has achieved important progress in terms of renewable energy and energy efficiency over the past few years. Legislative efforts have been made in the fields of energy and mining that are intended to improve conditions for energy independence and enable further harmonisation with EU legislation. Still, two-thirds of Serbia’s energy production continues to rely on low-quality coal. This is unsustainable over the long run and presents a major challenge that requires cross-sectoral efforts to solve.

The shift to renewable sources of energy is one of the most important steps any country can take to improve its energy resilience. However, time is needed to bring about transformative change in the way a country manages its resources, industries and value chains. The EU’s 2022 Enlargement Report on Serbia stated that Serbia has a lot of untapped potential regarding Chapter 15 on energy.

Battery solutions, hydrogen storage and reversible hydropower are some of the energy carriers that have been identified as having major potential in Serbia’s upcoming shift away from coal. Developing these sources and carriers, in parallel with transmission and distribution networks, will be key.

What advances the green agenda more than anything else is a decisive commitment to change. Through the Nordic Green project, we hope to contribute to knowledge-sharing and constructive initiatives that can accelerate green transition in Serbia and realise the country’s great potential.

How might Norwegian expertise help in reducing the country’s dependency on both specific energy sources and individual suppliers?

– What Norwegian expertise can do is to share our experience of organising the energy sector in the most effective way, based on a diversified mix of sources and carriers. We can do this with a view to increasing output and reducing greenhouse emissions. Secondly, and not to be forgotten, we also have certain competence in bringing state-owned companies in line with internationally accepted corporate governance principles. By doing so, we are making the energy sector attractive to investors, which eases access to capital. In this way, we can significantly increase sector productivity and profitability, making the energy sector the cornerstone of the national economy. The success of today’s Norwegian energy sector is rooted in decades of targeted action, as well as the profile of our higher education system that can respond easily to the requirements of the energy economy.

Serbia has a lot of talented young people, and they should be given the right opportunities to develop their skills and contribute to new growth impulses in the national economy. This is the future

Additionally, I think it is relevant to mention that our cluster model, which connects research institutions, companies, universities/ student programmes, government, and private equity funds, has over time been a strong driver behind our high-level technological entrepreneurship and our culture of innovation.

Overall, what do you see as the major achievements of bilateral relations between our two countries and the Serbian EU integration process in the areas supported by Norway?

– Relations between our two countries remain strong. Norway continues to be a reliable partner to Serbia on important issues and is a consistent supporter of socioeconomic development across the region. I would highlight our long-term support to socioeconomic development in cooperation with local SMEs and municipalities. Additionally, we will now step up our efforts in the areas of innovation and entrepreneurship, with a particular view to make use of young and highly skilled professionals in this country. Serbia has a lot of talented young people, and they should be given the right opportunities to develop their skills and contribute to new growth impulses in the national economy. This is the future.

At the same time, we hope to continue our excellent cooperation on energy and on efforts to make the energy sector efficient, diversified and as green as possible. We believe energy should be considered the main driver of strengthened and deepened regional cooperation among the WB6. Common engagement across borders to meet the energy challenge will build trust and make the region much more resilient.

Norway, therefore, continues to work with financial partners like the Western Balkans Investment Framework (WBIF) to support investments in clean energy, sustainable infrastructure and improving the competitiveness of business sectors within this region. Norway is consistently among the biggest bilateral donors to the WBIF, and we are happy to further our strong commitment in this regard.

OPPORTUNITY

Major industrial transitions are always difficult and costly, but it is important to be clear that green transition is both a must and an opportunity

PROGRESS

Serbia has achieved important progress in terms of renewable energy and energy efficiency over the past few years, mainly in the realm of legislative efforts

CONTRIBUTION

Through the Nordic Green project, we hope to contribute to knowledge-sharing and constructive initiatives that can accelerate green transition in Serbia

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