Chapter 6: Slovenia
(continued)
In general, Slovenia's environment fares relatively well in comparison with many other CEE countries, and there are no particular environmental disaster areas. Surface and groundwater pollution, acid rain, and transboundary air pollution from neighboring countries are the main environmental problems experienced.
The quality of surface and groundwater has deteriorated over the past few decades mainly due to discharges of untreated municipal and industrial wastewater, agricultural run-off, and pollution caused by the numerous industrial and municipal waste disposal sites. The quality of drinking water is generally poor, and only a small proportion of wastewater is treated. Improvements (and investments) in the sector are expected over the next few years.
In the context of air pollution, the energy sector has been the main area of concern, and high priority has been given to flue gas desulfurization at power plants. In 1994, air pollution control programs accounted for more than 70 percent of national environmental spending. Although many improvement projects have since been successfully implemented, power plants and increasing urban traffic are still the main sources of air pollution, especially around Ljubljana. Pollution from the transport sector is a growing issue and acid rain has also become a problem.
There are also growing problems related to poor waste management, and soil pollution caused by the extensive use of pesticides and fertilizers. Waste management is an area of particular concern because of the growing amount of industrial and municipal waste generated, and because of the contamination caused by leaching from unregulated and illegal dump sites. Hazardous waste management, and management of radioactive wastes are high priority areas.
There exists a high level of public awareness and a strong environmental NGO sector in Slovenia. However, most environmental decisions made in the past were based mainly on political grounds, without a comprehensive strategy or direction. The National Environmental Protection Program, currently under preparation, should help focus environmental efforts. Priority capital investments, the introduction of more comprehensive and viable environmental policies and legislation, and improved enforcement of regulations and institutional improvements are among those issues needing to be addressed in the near future.
Within the Ministry there are several agencies with different tasks related to the environment. The Nature Protection Authority is responsible for environmental policy implementation and permitting, with a range of duties including the handling of waste, water management, management of public services, provision of information services, technical assistance to the Environmental Development Fund, etc. The Authority's Water Management Department consists of eight subdivisions, one for each major watershed, while its Nature Protection Department has seven regional offices which operate as technical supervisory bodies to local authorities. The Office for Physical Planning is responsible for land use and planning, including urban and regional development and the supervision of land-use development plans undertaken by local authorities.
The Inspectorate for Environment and Physical Planning supervises the implementation of environmental regulations, oversees water resources management, and regulates physical planning and house building activities. The Inspectorate has nine regional offices responsible for environmental inspection, and twelve offices responsible for physical planning.
Within the structure of the Ministry of Environment there are also other institutions with environmental responsibilities, including: the Geophysics Administration, the Surveying and Mapping Authority, the Nuclear Safety Administration, and the Hydro-Meteorogical Institute.
The administration of environmental regulations in Slovenia is carried out both at the national level and at the local level (through 147 municipalities). The main function of local authorities related to the environment include setting regulatory policy concerning the protection of air, soil, and water resources on the local level (local regulations can be more stringent than the national) and the provision of public services, including the regulation and maintenance of water and power supply facilities; the collection and disposal of municipal waste; protection against excessive noise, and the preservation of local natural and cultural monuments. No environmental administration takes place on the regional level, although there are 58 regional administrative units which operate between the national and the local authorities, and which perform some local administration tasks.
Finally, there are several independent or semi-independent scientific institutes that play some role in environmental protection. These include the Josef Stefan Institute, the Water Management Institute, and the National Chemical Institute.
An estimated USD 400 million is likely to be spent on environmental projects within the next three to seven years, based on the received and approved requests ("reservations") for long-term funding support for environmental protection programs submitted (before July 4, 1995) to the Ministry of Environment and Physical Planning by different companies during the process of privatization.
Contributions from municipal budgets are also a significant source of environmental funding although rather difficult to estimate.
Co-funding of environmental investments is a common scheme in Slovenia. Under the arrangement, the government supports environmental projects undertaken by businesses with up to 30 percent of the total investment. Projects are issued based on a public tender. Between 1991 and 1994, annual co-funding increased from USD 1.7 million to USD 4 million. The main condition for the co-funding of any project is that it must ensure the direct reduction of emissions.
It is expected that environmental investments from the private sector will increase significantly due to provisions in the privatization law that allows companies to reduce their asset value by reserving long-term funds for investment in environmental protection.
The PHARE Programme is one of the biggest contributors of foreign funding in Slovenia, with more than USD 100 million in grants disbursed since 1992. However, only a part of this amount was related to environmental projects, such as the construction of wastewater treatment plants and sewerage networks, conversion of domestic heaters, industrial sanitation and coastal management programs. Additional sources of finance included loans from the EBRD (e.g. a wastewater treatment plant in Maribor, currently under preparation) and the World Bank, which co-financed the conversion of domestic and small commercial heaters from coal to natural gas. Further donors include the governments of Austria, France, the Netherlands, and the UK, all of which support various programs in the public and private sector.
The major state bodies involved in preparing environmental legislation are the Parliament, which passes basic legislation; the Ministry of Environment and Physical Planning; the Environmental Protection Council; the Nature Protection Agency established within the Ministry of Environment, and local authorities, dealing with environmental protection issues at the local level.
The general structure of environmental legislation reflects the pattern of the Slovenian legal system. Its hierarchy of legal sources begins with the Constitution, followed by basic environmental legislation (i.e., the 1993 Environmental Protection Act) and subordinate regulations and decrees covering individual sectors. The legislative framework related to air and water pollution is already in place. Although the government has recently adopted a waste strategy, the legislation covering waste management is still missing. Moreover, legislation concerning the implementation and enforcement of existing regulations is lagging behind. Although Slovenian officials are putting great effort into harmonizing national environmental legislation with EU standards, many gaps still exist, especially in sectoral and enforcement legislation.
The levels of compliance are still below EU standards in many key areas, such as the industrial and energy sectors, or in the management of municipal and hazardous waste. The country's efforts to enforce compliance have focused mainly on air pollution control and water quality protection, and have neglected many important areas.
In the future, more attention will have to be paid to introducing air, waste and water regulations, to the Integrated Pollution Prevention and Control (IPPC) directive, and to establishing funding sources for environmental protection projects.
| TABLE 6.3: ENVIRONMENTAL EXPENDITURES IN SLOVENIA, 1994-1996 (MLN USD) | ||
|---|---|---|
| Year | Environmental Expenditures | Share of GDP |
| 1994 | 146.6 | 1.0% |
| 1995 | 150.4 | 0.8% |
| 1996 (estimated) | 147.6 | 0.8% |
| Source: IMAD Spring Report 1997, based on data collected from the Statistical Office of the RS, Ministry of Finance, EcoFund of the Republic of Slovenia, and IMAD estimates | ||
The breakdown of environmental expenditures by media in 1994 is shown in Table 6.4. Air protection projects accounted for the largest share of national expenditures (71 percent of the total). In contrast to the other surveyed countries, waste management related projects accounted for a significant proportion of the total spending (18 percent), followed by water and wastewater activities (9 percent).
| TABLE 6.4: BREAKDOWN OF ENVIRONMENTAL EXPENDITURES BY MEDIA, 1994 | ||
|---|---|---|
| Media | Mln USD | Share of Total |
| Air | 104.8 | 71% |
| Water and wastewater | 13.3 | 9% |
| Waste | 26.6 | 18% |
| Other | 3.0 | 2% |
| Total | 147.6 | 100% |
| Source: The Statistical Yearbook of Slovenia, 1995 | ||
An increase in environmental expenditures can be expected over the next few years as a result of efforts to improve compliance with environmental legislation and policy which is increasingly being harmonized with EU standards. According to a 1997 study prepared for the EU "Assessing the Costs of CEE Approximation with EU Environmental Directives," the annual costs of compliance in the major environmental sectors (air, wastewater and waste) are estimated to exceed USD 152 million in Slovenia. The bulk of this amount is expected to be spent on purchasing new environmental technologies and on upgrading old systems, and will come in part from improved enforcement of regulations and collection of fees and fines.
| TABLE 6.5: SPENDING ON ENVIRONMENTAL TECHNOLOGIES IN SLOVENIA (MLN USD) | |
|---|---|
| Category | 1994 |
| Air | 3.3 |
| Water | 12.5 |
| Waste | 4.0 |
| Energy | 0.2 |
| Noise and vibration | 0 |
| Total | 20.0 |
The REC survey included 121 environmental companies. The combined 1995 turnover of the 95 companies of the 121 which responded to the question on turnover amounted to USD 87 million. As shown in Table 6.6, the Slovenian environmental market is geared primarily toward providing technical services (40 percent of revenues). The next major source of income was manufacturing of environmental technologies (26 percent), followed by non media-specific "other" (19 percent), and testing, monitoring and laboratory services (15 percent).
| TABLE 6.6: BREAKDOWN OF THE REVENUES OF ENVIRONMENTAL BUSINESSES IN SLOVENIA BY ACTIVITY, 1995 | |
|---|---|
| Activity | % of Revenues |
| Technical Services | 40% |
| Environmental Technologies | 26% |
| Testing, Monitoring and Laboratory Services | 15% |
| Other (non-media specific) | 19% |
| Source: REC, The Emerging Environmental Market, 1997 | |
The NEPP should in particular cover: (i) environmental stress and its impact on the health of the population; (ii) the assessment of the state of the environment and natural resources, and the risks to which they are exposed; (iii) long term projections of environmental trends and conditions; (iv) attainable goals and methods for their realization; (v) the necessary financial means for achieving the goals set; (vi) priority tasks and projects; (vii) analysis of expected costs and benefits; and (viii) guidelines for the technical development of environmental protection activities and public services. The NEPP should be divided into global, national, regional and local fields of activity, and is expected to include short, medium, and long-term policy targets together with a list of the major environmental problems facing the country. The NEPP also focuses attention on the conditions necessary for its effective implementation, including the expected costs, which are estimated to be about 1.5 percent of GDP annually (currently standing at approximately 0.8 percent of GDP).
While it is not expected that the NEPP will be adopted before 1998, the following priority areas were identified in the Ministry of Environment 1995 Environmental Report as needing urgent attention:
| TABLE 6.7: BREAKDOWN OF REVENUES OF ENVIRONMENTAL BUSINESSES IN SLOVENIA BY MEDIA, 1995 | |
|---|---|
| Media | % of Revenues |
| Water and wastewater | 30% |
| Waste | 30% |
| Air | 9% |
| Energy | 7% |
| Other (not media specific) | 24% |
| Source: REC, The Emerging Environmental Market, 1997 | |
Although the EcoFund has been fully operational since 1995, 1996 was the first year of significant financial turnover. Total revenues in 1996 amounted to USD 13.9 million, while expenditures amounted to USD 10.3 million. Table 6.8 presents information on the financial activities of the Fund.
| TABLE 6.8: REVENUES AND EXPENDITURES OF THE ECOFUND, 1994-1996 (USD MILLION) | |||
|---|---|---|---|
| 1994 | 1995 | 1996 (estimate) | |
| Total Revenues | 1.2 | 10.5 | 13.9 |
| Total Expenditures | - | 0.6 | 10.3 |
| Source: The Slovenian Environmental Development Fund, 1997 | |||
The Slovenian EcoFund is generally regarded as one of the best funds of this type in Central and Eastern Europe. The Fund operates as a non-profit financial organization providing soft loans for environmental projects on preferential terms. The project funding opportunities are publicly announced, and the funding is awarded through tendering procedures. The priorities of the Fund reflect the priorities outlined in the Environmental Protection Act, and include air pollution abatement, phasing out of ozone-depleting substances, municipal infrastructure development, and programs for the reduction of industrial pollution. Table 6.9 presents the breakdown of the Fund's expenditures by media.
| TABLE 6.9: BREAKDOWN OF THE EXPENDITURES OF THE ECOFUND BY MEDIA | ||
|---|---|---|
| Media | 1995 | 1996 (estimate) |
| Air | 100% | 57% |
| Water and wastewater | - | 29% |
| Waste | - | 14% |
| Source: The Slovenian Environmental Development Fund, 1997 | ||
During the period 1995-96, the Fund awarded loans worth USD 4.5 million to municipalities and municipal service companies for wastewater treatment, waste management, and construction of water, sewage, and gas pipelines. In 1996, the Fund awarded USD 7 million in loans to companies for air and water pollution reduction projects, and for programs to phase out ozone-depleting substances. In May 1996, the Fund obtained a USD 20 million loan from the World Bank for air pollution projects, and a further USD 3.5 million loan to set up the Geo Information Center. Currently, the PHARE programme is considering awarding the Slovenian Fund a grant of ECU 5 million for further environmental investments.
The main problems still facing the Fund, however, are the lack of capital and high interest rates, pegged 6 percent above the rate of inflation. Another problem commonly noted by businesses is the large amount of time necessary to process a funding application.
