EUROPEAN COMMISSION Brussels, 8.9.2022 SWD(2022) 273 final COMMISSION STAFF WORKING DOCUMENT Environmental Implementation Review 2022













Country Report - SLOVENIA



























Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Environmental Implementation Review 2022: Turning the tide through environmental compliance













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This report has been written by the staff of the Directorate-General for Environment, European Commission. Comments are welcome. Please send them to: ENV-EIR@ec.europa.eu More information on the European Union is available at: ( http://europa.eu ). Photographs: For reproduction or use of these photos, permission must be sought directly from the copyright holder. ©European Union, 2022 Reproduction is authorised provided the source is acknowledged. Table of Content Executive summary Part I: Thematic Areas 1. Circular Economy and waste management

Measures towards a circular economy Waste management 2. Biodiversity and natural capital Nature protection and restoration Marine ecosystems Ecosystem assessment and accounting 3. Zero Pollution Clean air Industrial emissions Major industrial accidents prevention – SEVESO Noise Water quality and management Chemicals 4. Climate Action Key national climate policies and strategies Effort sharing target Key sectoral developments Use of revenues from the auctioning of EU ETS allowances Part II: Enabling framework: Implementation tools 5. Financing

Environmental investment needs in the European Union EU environmental funding 2014-2020 EU environmental funding 2021-2027 National expenditure on environmental protection Green budget tools Overall financing compared to the needs 6. Environmental Governance Information, public participation and access to justice Compliance assurance Effectiveness of environmental administrations Reforms through the Commission’s Technical Support Instrument (TSI) TAIEX EIR peer to peer



Executive summary In previous environmental implementation reviews (EIRs), the Commission identified the following main challenges for Slovenia’s implementation of EU environmental policy and law: ·putting in place all conservation measures and enforcing their implementation in Natura 2000 sites; ·integrating nature-conservation measures into other sectors, by getting the support of some sectoral stakeholders, particularly in the agriculture sector; ·reducing particulate matter emissions by reducing traffic congestion and the burning of fossil fuels, as well as supporting efficient and clean district heating; ·improving urban wastewater collection and treatment through appropriate investments to meet the country’s accession obligations (which expired at the end of 2015);

On the Natura 2000 network, all sites of community importance have been designated as special areas of conservation. As a result, the Natura 2000 network on land can be considered complete. However, there is still a gap in the classification of marine special protection areas which is the subject of an EU infringement procedure. In addition, site-specific conservation objectives of sufficient quality have yet to be established for all Natura 2000 sites. There are also delays in implementing the necessary conservation measures for many sites. All conservation measures for all Natura 2000 sites need to be strengthened and fully implemented, using also the prioritised action framework. In terms of EU funding, there are practically no funds for biodiversity in the national recovery and resilience plan to cover several needs. Therefore, the shortfall needs to be made up from other EU funds (in particular, from those under the common agricultural policy and cohesion policy) and national sources. On integrating nature conservation measures into other sectors, there has been no progress. This has contributed to the deterioration of the conservation status of habitats and species. On the impact of agricultural practices on grassland habitats and associate species (inside and outside Natura 2000 sites), the Commission started an infringement procedure. Adapting agricultural practices within the sites where the conservation status of habitats and/or species is declining due to agricultural activities is a priority. The integration of nature-conservation measures into other sectors still remains a concern. On air quality there has been progress. The emissions of key air pollutants have decreased significantly in Slovenia in recent years, while GDP growth continued. Slovenia expects to reach its emission-reduction commitments for all air pollutants covered by the National Emission Reduction Commitments Directive for the period 2020-2029, and for most pollutants from 2030 onwards. However, the projections do not demonstrate that they meet the emission-reduction commitments for PM2.5 for 2030 onwards. In terms of EU funding, almost a quarter of the national recovery and resilience plan is allocated to sustainable energy and transport which is expected to benefit air quality, including PM2.5. Despite some progress made in recent years in the wastewater sector, Slovenia has yet to fully achieve compliance with the Urban Waste Water Treatment Directive. Slovenia is under infringement procedure as some agglomeratons with a population of over 10.000 are not compliant with the requirements of the UWWTD. The procedure may result in fines. The situation regarding smaller agglomerations (above 2 000 people.) is also unsatisfactory. Developing and modernising the necessary infrastructure for all agglomerations, as set out under the Urban Waste Water Treatment Directive, has yet to be completed. Slovenia’s environmental financing for investments came to 1.76% of GDP (EU average: 0.7%) in 2014-2020, over 80% of which originated from domestic sources. On the other hand, the country’s environmental-investment needs for 2021-2027 are estimated to be at least 2.06% of GDP, indicating an additional financing need (or gap) of 0.3% of GDP for environmental implementation compared to the 2014-2020 period financing baseline. On environmental harmful subsidies, Slovenia allocated more than the EU average numbers of these subsidies for fossil fuels, which is significantly higher than the subsidies allocated to renewable energy. This does not encourage greener investments.



Part I: Thematic Areas 1. Circular Economy and waste management Measures towards a circular economy The new Circular Economy Action Plan adopted in March 2020 is one of the main building blocks of the European Green Deal. The EU’s transition to a circular economy will reduce pressure on natural resources and will create sustainable growth and jobs. It is also a prerequisite to achieve the EU’s 2050 climate neutrality target and to halt biodiversity loss. The Action Plan announces initiatives along the entire life cycle of products, aiming to reduce the EU's consumption footprint and to double the EU's circular material use rate by 2030. It targets how products are designed, promotes circular economy processes, encourages sustainable consumption, and aims to ensure that waste is prevented and the resources used are kept in the EU economy for as long as possible. The circular material use rate is a good indicator of an economy’s circularity, as it includes all the materials that are fed back into our economy. Large differences in the circularity rate exist between countries. To help achieve the goal in the EU circular economy action plan of doubling the EU’s circular material use rate by 2030, ambitious measures targeting the whole product life cycle are needed at Member State level. Such measures range from sustainable product design that makes it possible to increase the durability, reparability, upgradability and recyclability of products, to other measures, like: (i) remanufacturing; (ii) increasing circularity in production processes; (iii) recycling; (iv) boosting eco-innovation and (v) increasing the uptake of green public procurement. The rate of Slovenia’s circular (secondary) use of material rose from 8.5% in 2016 to 12.3% in 2020, coming close to the EU average of 12.8%, and showing a strong and positive dynamic. Figure 1: Circular material use rate (%), 2010-2020 Resource productivity expresses how efficiently the economy uses material resources to produce wealth. Improving resource productivity can help to minimise negative impacts on the environment and reduce dependency on volatile raw material markets. As shown in Figure 2, Slovenia generated EUR 1.54 per kg of material consumed in 2020. This puts resource productivity in Slovenia considerably below the EU average of EUR 2.09 per kg. Figure 2: Resource productivity, 2010-2020

Circular economy strategies The Commission encourages Member States to adopt and implement national/regional circular economy strategies covering the whole life cycle of products. This is because such strategies are one of the most effective ways to progress towards a more circular economy at Member State level. Since the launch of the online Circular Economy Stakeholder Platform in 2017 , national, regional or local authorities have used the platform to share their strategies and roadmaps. In May 2018, the ‘Roadmap towards the Circular Economy in Slovenia’ was published. It sets out the path for Slovenia to become a front runner for the circular economy in the region. The roadmap identifies four priority sectors, gives recommendations to the government and identifies best practice. In November 2012, the Slovenian Government adopted an Implementation plan for an European Institute of Innovation & Technology (EIT) Climate-KIC-led project called ‘A Deep Demonstration of a Circular, Regenerative and Low-Carbon Economy in Slovenia’. The initiative is one of eight deep demonstrations launched by EIT Climate-KIC, which together offer a test bed environment for the ambitious, 1.5-degree-consistent systems. Slovenia’s plan centres on driving circularity in five main areas: (i) forestry; (ii) built environment; (iii) manufacturing; (iv) food; and (v) mobility. It focuses on the three pillars of: (i) smart and circular communities, (ii) circular green development and (iv) circular policy design and science. Slovenia does not have in place a sectoral strategy for plastics, textiles or construction. However, the proposal on ‘Deep Demonstration of a Circular, Regenerative and Low-Carbon Economy in Slovenia’ includes initiatives targeting these sectors. In addition, as part of the national recovery and resilience plan, Slovenia will establish a strategic and legal framework for the transition to a circular economy. It will also work on extending producer responsibility, promoting the integration of recycled material into new products, integrating the principle of circular economy in the green public procurement system, and establishing a one-stop shop to support businesses. Eco-innovation A successful transition to a circular economy requires social and technological innovation. This is because the full potential of the circular economy can only be reached when it is implemented across all value chains. Eco-innovation is an important enabling factor for the circular economy. New approaches to product design and new business models can help to produce circularity innovations, creating new business opportunities. In 2021, Slovenia ranked 13th on the 2021 Eco-Innovation Index, with a total score of 113, resulting in an average eco-innovation performance. In one out of five components (eco-innovation inputs), Slovenia performed above the EU average. However, its performance is below the average for eco-innovation activities, eco-innovation outputs, resource-efficiency outcomes and socio-economic outfits. Figure 3: Eco-innovation performance, 2010-2019 Green public procurement (GPP) Public procurement accounts for a large proportion of European consumption, with public authorities’ purchasing power representing around 14% of EU GDP. Although GPP is a voluntary instrument, it has a key role to play in the EU's efforts to become a more resource-efficient and sustainable economy. The European Commission is helping to increase the use of GPP or green purchasing. Thus, EU GPP criteria are set up for many sectors . A Green Public Procurement Regulation has been in force since 2012, renewed in 2018 and 2021. In January 2020, minor changes in some articles were introduced. The regulation is mandatory for 22 groups of products and services. According to the data from the annual statistical reports on the award of public contracting authorities, the GPP system is gradually expanding. Since 2019, the GPP team at the Ministry of the Environment and Spatial Planning has been offering substantive promotion and support. The team has built its capacity and human resources mainly through LIFE IP project ‘Care 4 Climate’.

EU ecolabel and the eco-management and audit scheme (EMAS) The number of EU ecolabel products and EMAS-licensed organisations in a given country provides some indication of the extent to which the private sector and national stakeholders in that country are actively engaged in the transition to a circular economy. It also shows how committed public authorities are to supporting instruments designed to promote the circular economy. As of September 2021, Slovenia had 110 products out of 83 590, and 35 licences out of 2 057 registered in the EU ecolabel scheme. This shows a low take-up of the products and licences . Moreover, 16 sites belonging to 10 organizations in Slovenia are currently registered in EMAS . Since the last report in 2019, there have been 38 new registrations of EU ecolabel products and 5 licence registrations, as well as 5 new organisations registered with EMAS in Slovenia. In 2019, one of the priority actions recommended for Slovenia was to continue efforts to get all economic sectors to accelerate their uptake of the circular economy. In view of Slovenia’s good progress and its commitment, this action has not been recommended this time. Waste management Turning waste into a resource is supported by: (i) fully implementing EU waste legislation, which includes the waste hierarchy, the need to ensure separate collection of waste, the landfill diversion targets, etc.; (ii) reducing waste generation and waste generation per capita in absolute terms; (iii) limiting energy recovery to non-recyclable materials and phasing out landfilling of recyclable or recoverable waste. This section focuses on the management of municipal waste , for which EU law sets mandatory recycling targets. Preventing products and materials from becoming waste for as long as possible is the most efficient way to improve resource efficiency and to reduce the environmental impact of waste. Waste prevention and reuse are the most preferred options, and are therefore at the top of the waste hierarchy. The amount of municipal waste generated is a good indicator of the effectiveness of waste-prevention measures. After a downward trend, municipal-waste generation in Slovenia has started to increase again in recent years. It came to 487 kg/year/inhabitant in 2020 (compared to 449 kg/year/inhabitant in 2015), although it remains just below the EU average (505 kg/year/inhabitant) – see Figure 4. Figure 4: Municipal waste by treatment in Slovenia, 2010-2020 Figure 4 also shows municipal waste by treatment type, in kg per capita. The situation varies by region, but managing waste efficiently still remains a challenge for Slovenia. Slovenia has made slow but steady progress over the past decade on stepping up its recycling rate and diverting municipal waste from landfilling. The recycling rate for municipal waste in 2020 was 59.3%. This is well above the EU-27 average of 47.8% (2020). This puts Slovenia among eight Member States (Germany, Austria, the Netherlands, Belgium, Denmark. Luxembourg and Italy), which achieved recycling rates of 50% or higher.

There is still a problem with several illegal landfills that have yet to be closed. Two infringement cases remain open, one concerning the site of Bukovžlak close to Cinkarna Celje, and the landfill of Suhadole (last remaining ones of the group of illegal landfills). Slovenia may be facing fines due to the abovementioned infringements. Figure 5 shows that Slovenia has already reached the EU’s 2025 recycling target (55%) and is on the way to meeting the EU 2030 recycling target (60%). Figure 5: Recycling rate of municipal waste, 2010-2020 The Commission's Early Warning report did not list Slovenia as one of the countries at risk of missing the EU 2020 target of recycling 50% of municipal waste – it is among best performing Member States in this respect. The Commission is currently finalising its analysis of the progress made on the recommendations from the 2018 Early Warning Reports and its analysis of the progress made towards achieving the 2025 waste recycling targets. This report will be presented at the end of 2022 and will assess the progress made to date. Implementation of the 2018 waste legislative package By 5 July 2020 EU Member States were required to bring their national laws into line with changes included in the revised Waste Framework Directive, the Packaging and Packaging Waste Directive and the Landfill Directive . Slovenia has notified the transposition of the Landfill and the Packaging and Packaging Waste directives to the Commission. A conformity assessment is now ongoing. Waste-management plans and waste-prevention programmes are instrumental for the full implementation of the EU waste legislation. They set out key provisions and investments to ensure compliance with existing and new legal requirements (e.g. on waste prevention; on separate collection for a number of specific waste streams; on recycling targets; and on landfill targets). Slovenia was due to submit revised waste-management plans and waste-prevention programmes by 5 July 2020. The drafting of the operational programme for waste management and prevention is in the final stage. It will provide the basis for the drawing up of an environmental report. The programme also includes activities for preventing food waste. An analysis of how effective the management of municipal and other waste was in 2018 and of possible developments over the next 20 years is being carried out. The Slovenian government had been expected to adopt the programme in the first quarter of 2022. The 2019 EIR for Slovenia contained several priority actions in the waste sector, including the need to: I.introduce new instruments to promote waste prevention, make reuse and recycling more economically attractive and shift reusable and recyclable waste away from incineration; II.improve and extend separate collection of waste, including for biowaste; III.set mandatory recycling targets for municipalities with measures in case of non-compliance (e.g. fines); IV.improve the functioning of extended producer responsibility systems; V.improve data on waste management; VI.close and rehabilitate the non-compliant landfills. 2022 priority actions

·Introduce new policies, including economic instruments, to further implement the waste hierarchy, i.e. promote prevention, and make reuse and recycling more economically attractive; and/or implement the policies which are already in place. ·Ensure a waste-management plan in line with the revised Waste Framework Directive is in place. ·Close and rehabilitate, as quickly as possible, the remaining illegal landfills to avoid charges from infringement procedures.



2. Biodiversity and natural capital The 2030 EU biodiversity strategy adopted in May 2020 aims to put the EU’s biodiversity on a path to recovery and sets out new targets and governance mechanisms to achieve healthy and resilient ecosystems. In particular, the strategy sets out ambitious targets to: (i) protect a minimum of 30% of the EU’s land area and 30% of its sea area and integrate ecological corridors, as part of a true trans-European nature network; (ii) strictly protect at least a third of the EU’s protected areas, including all remaining EU primary and old-growth forests; (iii) effectively manage all protected areas, defining clear conservation objectives and measures, and monitoring them appropriately. The strategy also sets out an EU nature restoration plan – a series of concrete commitments and actions to restore degraded ecosystems across the EU by 2030, and manage them sustainably, addressing the key drivers of biodiversity loss.. The EU Habitats and the Birds Directives are key legislative tools to deliver on the targets in the EU’s biodiversity strategy for 2030, and are the cornerstone of European legislation aimed at conserving the EU's wildlife. At present, Slovenia does not have a national strategy for biodiversity and nature that reflects the commitments and actions of the EU biodiversity strategy. Nature protection and restoration Natura 2000, the largest coordinated network of protected areas in the world, is the key instrument to achieve the objectives in the Birds and Habitats Directives. These objectives are to ensure the long- term protection, conservation and survival of Europe's most valuable and threatened species and habitats and the ecosystems they underpin. Key milestones towards meeting the objectives of the Birds and Habitats Directives are: (i) the setting up of a coherent Natura 2000 network; (ii) the designation of sites of community importance (SCIs) as special areas of conservation (SACs) , and the setting of conservation objectives and measures for the Natura 2000 sites. Setting up a coherent network of Natura 2000 sites Slovenia hosts 60 habitat types and 202 species covered by the Habitats Directive. The country also hosts populations of 76 bird taxa listed in the Birds Directive Annex I. By 2021, 37.9% of the national land area of Slovenia was covered by Natura 2000 (EU coverage 18.5%), with special protection areas (SPAs) classified under Birds Directive covering 25% (EU coverage 12.8%) and sites of community importance (SCIs) under the Habitats Directive covering 32.7% (EU coverage 14.2%) of the Slovenian territory. Whilst the Natura 2000 network on land can be considered complete, there is still a gap in the classification of marine SPAs for the Mediterranean Shag in Slovenian marine waters, for which the Commission began an infringement procedure in 2020. Taking into account both Natura 2000 and other nationally designated protected areas, Slovenia legally protects 40.5% of its terrestrial areas (EU-27 coverage 26.4%) and 5.2% of its marine areas (EU-27 coverage 10.7%).

Figure 6: Marine & terrestrial protected area coverage, 2021 Figure 7: Natura 2000 terrestrial protected area coverage, 2021 Designating SACs and setting conservation objectives and measures The 6-year deadline set by the Habitats Directive to designate an SCI as an SAC and to establish appropriate conservation objectives and measures has expired for all but a few sites in Slovenia. Although all SCIs have been designated as SACs, Slovenia has yet to establish site-specific conservation objectives of sufficient quality for all of them. Furthemore, the implementation of the necessary conservation measures has been delayed for many sites. Slovenia is currently addressing some of these shortcomings within the ‘LIFE Integrated Project for Enhanced Management of Natura 2000 in Slovenia’. Therefore, Slovenia still has to provide for the necessary conservation objectives and measures for the designated sites. Progress in maintaining or restoring favourable conservation status of species and habitats To measure the performance of Member States, Article 17 of the Habitats Directive and Article 12 of the Birds Directive require reporting on the progress made towards maintaining or restoring the favourable conservation status of species and habitats. According to the report submitted by Slovenia on the conservation status of habitats and species covered by Article 17 of the Habitats Directive for 2013-2018, the share of assessments for habitats in good conservation status in 2018 is 10% less than the 42.7% reported under the previous reporting period (2007-2012). On protected species, the share of assessments for habitats in good conservation status in 2018 was 29.22%, slightly more than the 28.96% reported under the previous reporting period (2007-2012). On birds, 82% of the breeding species showed short-term increases or stable population trends (for key wintering species this figure was 40%). At the same time, the share of habitats in bad conservation status in 2018 increased to 61.8% and the share of assessments for species in bad conservation status also increased to 53%. The habitat groups that have been faring particularly badly are forests, bogs, mires and fens, grasslands and freshwater habitats. On species, groups that have been faring particularly badly are mammals, amphibians and arthropods, while notably there are still knowledge gaps on the conservation status of species. The main pressures are from agriculture, urban development, changes in water regime, forestry and other extraction of resources. On the impact of agriculture on grassland habitats and associated species, in particular birds and butterflies, the Commission begun an infringement procedure against Slovenia in 2019 for its failure to address damaging agricultural practices inside and outside Natura 2000 sites. Figure 8: Assessments on conservation status for habitats for 2007-2012 and 2013-2018 reporting periods

Figure 9: Assessments on conservation status for species for 2007-2012 and 2013-2018 reporting periods To make significant progress in restoring and maintaining favourable conservation status of protected habitats and species, Slovenia should focus its implementation of conservation and restoration measures on the habitats and species in bad conservation status and/or declining trends, such as (i) grasslands and associated species by addressing agricultural pressures, (ii) forests and associated species by addressing forestry practices and (iii) freshwater habitats and associated species by addressing changes in the water system. Bringing nature back to agricultural land and restoring soil ecosystems Agricultural land The biodiversity strategy works alongside the new farm to fork strategy and the new common agricultural policy (CAP) to support and achieve the transition to fully sustainable agriculture. The biodiversity and farm to fork strategies have set four important targets for 2030: - a 50% reduction in the overall use of – and risk from – chemical pesticides; - a 50% reduction in the use of more hazardous pesticides; - a 50% reduction in losses of nutrients from fertilisers while ensuring there is no deterioration of soil fertility (which will result in a 20% reduction in the use of fertilisers); - bring back at least 10% of agricultural area under high-diversity landscape features and increase areas under organic farming to at least 25%. Slovenia has an estimated 10.76% of area under organic farming, marginally above the EU average of 9.07% (2020).

Figure 10: Share of total utilised agricultural area occupied by organic farming per Member State, 2020 Agricultural land covers 36% of Slovenia’s territory. The agricultural sector consists of a significant share of small-sized, semi-subsistence and small-scale commercial farms, due to the country’s geological and other natural conditions. Slovenia’s agriculture generates one of the lowest incomes from agriculture in the EU. In terms of environmental impacts, Slovenia’s agriculture has been identified as one of the main pressureswhich is, among other things, linked to the management of nutrients (nitrogen, phosphorous, potassium, etc.) and livestock manure. According to the Slovenian prioritised action framework (PAF), the sector also affects biodiversity because of the (i) intensification of agricultural systems (fertilisation, intensification of mowing systems), (ii) conversion into arable land, (iii) abandonment of traditional management systems, (iv) inappropriate techniques or timing for mowing grasslands, (v) inappropriate application of natural or inorganic fertilisers as well as (vi) drainage of land. Soil ecosystems Soil is a finite and extremely fragile resource. It is increasingly degrading in the EU. The new EU soil strategy, adopted on 17 November 2021, stresses the importance of soil protection, of sustainable soil management and of restoring degraded soils to achieve the Green Deal objectives as well as land degradation neutrality by 2030. This entails: (i) preventing further soil degradation; (ii) making sustainable soil management the new normal; (iii) taking action for ecosystem restoration. One factor in the degradation of soil ecosystems is the area of soil that is sealed or artificialised . The net land taken (land ‘taken’ means land that is sealed or artificialised) per year in 2012-2018 can be seen as a measure of one significant pressure on nature and biodiversity – land-use change. At the same time, land-use change constitutes an environmental pressure on people living in urbanised areas. Despite a reduction in the last decade (land take was over 1 000 km2/year in the EU-28 between 2000 and 2006), land take in the EU-28 still amounted to 539km2/year between 2012-2018 . The concept of ‘net land take’ combines land take with the return of land to non-artificial land categories (re-cultivation). While some land was re-cultivated in the EU-28 in 2000-2018, 11 times more land was taken than returned.

Slovenia ranks below the EU average with a net land take of 49.8 m2/km2 (EU-27 average: 83.8 m2/Km2). In 2018, according to the Performance Review and Implementation System (PRAIS3) reporting platform, Slovenia updated its reporting on land degradation with actions intended to combat the degradation identified. However, Slovenia has not yet committed to setting land degradation neutrality targets under the UN Convention to Combat Desertification (UNCCD). Figure 11: Land take and re-cultivation in EU27 (m2/km2), 2012-2018 Contamination can severely reduce soil quality and threaten human health and the environment. The last available information from EU Member States estimated that potentially polluting activities have taken place or are still taking place on approximately 2.8 million sites in the EU. At EU level, 650 000 of these sites have been registered in national or regional inventories. A total of 65 500 contaminated sites already have been remediated. Slovenia had registered 181 sites where potentially polluting activities had taken place or are still taking place, and had already remediated or applied aftercare measures on 83 sites. Soil organic matter plays an important role in the carbon cycle and in climate change. Soils are the second largest carbon sink in the world after the oceans. Forests and timber The EU forest strategy for 2030, adopted in July 2021, is part of the ‘Fit for 55’ package. The strategy promotes the many services that forests provide. Its key objective is to ensure healthy, diverse and resilient EU forests that contribute significantly to the strengthened biodiversity and climate ambitions. Forests are important carbon sinks and conserving them is vital if the EU is to achieve climate neutrality by 2050. Of the 27% of EU forest area protected under the EU nature directives, less than 15% has a favorable conservation status. Assessments reveal that bad conservation status increased from 27% to 31% in the EU in 2018 compared to 2015. More than 75% of the assessments in Slovenia show a bad to poor conservation status. In Slovenia, forests cover 58.61% of its territory and more than 75% of the assessments reveal a bad to poor status. A total of 34 000 ha in Slovenia are covered by primary forests. Figure 12: Conservation status of forests protected under the Habitats Directive in EU Member States, 2013-2018 (% assessments) The European Union Timber Regulation (EUTR), which prohibits the placing on the EU market of illegally harvested timber. In accordance with the EUTR, EU Member States’ competent authorities must conduct regular checks on operators and traders, and apply penalties for non-compliance. With the amendment of Article 20 of the EUTR, reporting every 2 years has been changed to annual reporting, and covers the calendar year as of 2019. In the period from March 2017 to February 2019 , Slovenia carried out 611 checks on domestic timber operators. It also carried out 29 checks on operators importing timber. It is estimated that Slovenia had 2 124 operators placing imported timber types onto the internal market over the reporting period.

The new Deforestation Regulation will repeal and replace the EUTR, as it will essentially integrate and improve the existing system to check the legality of timber. Invasive alien species (IAS) IAS are a key cause of biodiversity loss in the EU (alongside changes in land and sea use, overexploitation, climate change and pollution). Besides inflicting major damage on nature and the economy, many IAS also facilitate the outbreak and spread of infectious diseases, posing a threat to humans and wildlife. The implementation of the EU Invasive Alien Species Regulation and other relevant legislation must be stepped up. The biodiversity strategy for 2030 aims to manage recognised IAS and decrease the number of 'red list' species they threaten by 50%. The core of Regulation (EU) 1143/2014 on IAS (‘the IAS Regulation’) is the list of IAS of Union concern. The total number of IAS of Union concern is currently 66, of which: 30 are animal species; 36 are plant species; 41 are primarily terrestrial species; 23 are primarily freshwater species; 1 is a brackish-water species; and 1 is a marine species. According to a 2021 report on the review of how the IAS Regulation has been applied, the implementation of the IAS Regulation is already starting to deliver on its objectives such as a coherent framework for addressing IAS at EU level and increased awareness of the problem of IAS. At the same time, the above report identified some challenges and areas for improvement. Given that the deadlines for implementing the various obligations of the IAS Regulation applied gradually between July 2016 and July 2019, it is premature to draw conclusions on several aspects of the implementation of the IAS Regulation. A 2021 report on the baseline distribution (see Figure 13) shows that from the 66 species on the Union list, 21 have been observed in the environment in Slovenia. Figure 13: Number of invasive alien species of EU concern, based on available georeferenced information for Slovenia, 2021 An infringement case is ongoing against Slovenia as it failed to establish and implement a single action plan or a set of action plans fulfilling the requirements specified in Article 13 of the IAS Regulation by 13 July 2019 and to notify it/them to the Commission. 2022 priority actions ·Improve the quality of conservation objectives and measures in all sites. ·Fully implement all conservation measures in all Natura 2000 sites, paying special attention to adapting agricultural practices within the sites where conservation status of habitats and/or species are experiencing a decline due to agricultural activities. ·Integrate the Commission’s recommendations in the Slovenian CAP strategic plan of relevance to environment and climate action, including related EU objectives. ·Commit to setting land degradation neutrality targets under the UNCCD.

·Take measures to address the bad and poor conservation status of forest habitats to ensure the number of habitats with a favourable status increases. ·Establish and implement a single action plan or a set of action plans under Article 13 of the IAS Regulation. Marine ecosystems The EU Biodiversity Strategy for 2030 aims to substantially reduce the negative impacts on sensitive species and habitats in marine ecosystems and to achieve good environmental status as well as eliminate or reduce the incidental catches of protected, endangered, threatened and sensitive species to a level that allows species recovery and conservation [1]. The Marine Strategy Framework Directive (MSFD) requires Member States to achieve good environmental status (GES) for their marine waters. To that end, Member States must draw up marine strategies for their marine waters, and cooperate with Member States sharing the same marine region or sub-region. These marine strategies comprise different steps to be developed and implemented over 6-year cycles. The MSFD also requires Member States by 15 October 2018 to draw up a set of GES characteristics for each descriptor (Article 9), and to provide an initial assessment of their marine waters (Article 8). The Commission then assesses whether this constitutes an appropriate framework to meet the requirements of the Directive. The Commission assessed Slovenia’s 2018 determinations of GES for each of the MSFD’s 11 descriptors and determined their level of adequacy in relation to the Commission GES Decision . A good or very good score in the Commission assessment indicates that the national determinations of GES are well aligned with the requirements of the Commission GES Decision, and provide qualitative and quantitative national environmental objectives to be achieved for their marine waters. Figure 14: Level of adequacy of GES determination by Slovenia (MAD region) with criteria set under the Commission GES Decision – article 9 (2018 reporting exercise) Slovenia has one marine sub-region, MAD Mediterranean: Adriatic Sea. In this marine sub-region, 6 out of 11 determinations of GES were assessed as good or very good. The national determination of GES by Slovenia is consistent for 6 out of 11 descriptors. The MSFD also requires Member States to make an assessment of the current environmental status of their marine waters in relation to the determination of GES. A good or very good score indicates that the Member State has good capabilities to assess its marine environment in accordance with the requirements set out in the Commission GES Decision. Figure 15: Level of adequacy of national assessment of Slovenia’s marine environment (MAD region) with criteria set under the Commission GES Decision – article 8 (2018 reporting exercise) Seven descriptors out of 11 were scored as good or very good. Slovenia’s assessment of its marine environment is aligned with the requirements set out under the Commission GES Decision for 7 out of 11 descriptors. In the EIR 2019, the Commission recommended that Slovenia should promptly report on the updates to the different steps to comply with the MSFD. Furthermore, in March 2022, the European Commission published a Communication with recommendations for Member States. The Commission assessment highlighted that Member States need to step up their efforts to determine good environmental status and the use of the criteria and methodological standards according to the Commission GES Decision. The above considerations form the basis for the 2022 priority actions.

2022 priority actions ·Ensure regional cooperation with Member States sharing the same marine (sub)region to address major pressures. ·Implement the recommendations made by the Commission in the staff working document accompanying the Communication on recommendations per Member State and region on the 2018 updated reports for Articles 8, 9 and 10 of the MSFD. It should improve national GES determinations for five descriptors with a very poor/poor score; and it should carry out assessments of the marine environment for five descriptors with a very poor/poor score. ·Implement the Commission’s recommendations regarding the preparation of the marine strategies, encompasing: (i) their assessment, (ii) the determination of good environmental status and (iii) the establishment of environmental targets. Ecosystem assessment and accounting The EU biodiversity strategy for 2030 calls on Member States to better integrate biodiversity considerations into public and business decision-making at all levels and to develop natural capital accounting. The EU needs a better performing biodiversity observation network and more consistent reporting on the condition of ecosystems. Within the AlpES project (Ecosystem Services in the Alps, 2018), eight ecosystem services have been mapped for the whole of Slovenia: (i) surface water for drinking; (ii) biomass production from grassland, (iii) fuelwood; (iv) filtration of surface water by ecosystem types; (v) protection against avalanches, mudslides and rockfalls; (vi) CO2 sequestration by forest and bogs; (vii) outdoor reacreation activities; and (viii) symbolic alpine plants and animals, landscapes. The mapping is publicly available at the AlpES project’s website . To assess progress in ecosystem mapping and assessment, the Commission sends out a questionnaire twice a year containing 27 implementation questions. Slovenia has provided updated information and progress has been recorded since January 2016 (Figure 16). This assessment is updated every 6 months. Figure 16: ESMERALDA MAES Barometer, January 2016 - March 2021 Progress on ecosystem accounting implementation is assessed at national scale based on 13 questions (see figure 17). Figure 17: Ecosystem accounting Barometer, September 2021 2022 priority action ·Slovenia should continue to support the mapping and assessment of ecosystems and their services, and the development of ecosystem accounting. It should do this through appropriate indicators for integrating ecosystem extent, condition and services (including some monetary values) into national accounts. Slovenia should also continue to support the development of national business and biodiversity platforms, including natural-capital accounting systems to monitor and value the impact of business on biodiversity.



3. Zero Pollution Clean air EU clean air policies and legislation need to significantly improve air quality in the EU, moving the EU closer to the quality recommended by the WHO and curbing emissions of key air pollutants.

Air pollution and its impacts on ecosystems and biodiversity should be further reduced with the long-term aim of not exceeding critical loads and levels. This requires strengthening efforts to reach full compliance with EU clean air legislation and defining strategic targets and actions for 2030 and beyond. The 2030 zero pollution action plan targets are to reduce the health impacts of air pollution by 55% and to reduce the EU ecosystems threatened by air pollution by 25%. The EU has developed a comprehensive suite of air- quality legislation, which sets health-based air-quality standards and emissions-reduction commitments by Member State for a number of air pollutants. Air quality in Slovenia still continues to give cause for concern. However, the trend seems to be more positive compared with previous data. The latest available annual estimates (for 2019) by the European Environment Agency point to Slovenia suffering about 1 400 premature deaths each year (or 15 500 years of life lost (YLL)) attributable to fine particulate matter concentrations ; 90 premature deaths each year (1 000 YLL) attributable to excessive ozone concentrations ; and 40 premature deaths (400 YLL) attributable to excessive nitrogen dioxide concentrations . Compared with the EU-27 average, Slovenia is doing worse for fine particulate matter and ozone, but better for nitrogen dioxide concentrations. The number of YLL due to air pollution from PM2.5 decreased from 1 016 in 2018 to 744 in 2019, which is below the EU average of 762 per 100 000 inhabitants. Similarly, the number of YLL due to pollution from NO2 dropped from 29 per 100 000 inhabitants in 2018 to 19 in 2019 (EU-27 average is 99). The emissions of key air pollutants have decreased significantly in Slovenia in recent years, while GDP growth has continued (see Figure 18). According to the latest projections as submitted under Article 10(2) of the National Emission Reduction Commitments Directive (NECD) , Slovenia projects that it will reach its emissions-reduction commitments for all air pollutants covered by the Directive for the period 2020-2029 and for most pollutants from 2030 onwards. However, the projections do not demonstrate how the emissions-reduction commitments for PM2.5. from 2030 onwards will be reached. The latest inventory data submitted by Slovenia, prior to review by the Commission, indicate that Slovenia complied with the emissions-reduction commitments for all pollutants in 2020. Slovenia submitted its national air-pollution control programme on 10 October 2019. Figure 18: Emission trends of main pollutants/ GDP in Slovenia, 2005-2019 Figure 19: PM2.5 and NOx emissions by sector in Slovenia, 2019 In 2020, no exceedances above the EU limit values set by the Ambient Air Quality Directive were registered. However, for several air-quality zones, the target values for ozone concentration have not been met . Persistent breaches of air-quality requirements, which have severe negative effects on health and the environment, are being followed up by the European Commission through infringement procedures (mainly for PM10 and NO2 exceedances) covering all Member States concerned, including Slovenia for exceedances of PM10 limit values. The aim is for appropriate measures to be put in place to swiftly bring all air-quality zones into compliance with the EU requirements. An infringement case against Slovenia concerning daily exceedances of PM10 values has been ongoing since 2012. Slovenia received several priority actions from the Commission in the 2019 EIR as regards clean air. More specifically, the Commission recommended that Slovenia: (i) take action to reduce the main emission sources, under its national air-pollution control programme (NAPCP); (ii) accelerate the reduction in particulate matter emissions and concentrations; (iii) upgrade and improve the air-quality monitoring network; and (iv) ensure the timely reporting of adequate data. Slovenia has been taking some action in this respect, e.g. planning for clean-energy and transport investments under the national recovery and resilience plans, and upgrading the monitoring network, e.g. with funding of approximately EUR 39 million under the 2014-2020 cohesion policy (this was used for a monitoring project: ‘Sinica - Upgrading the Air-Pollution Monitoring System, Identifying Causes of Excessive Burden, and Analysing the Effects of Improvement Measures’). 2022 priority actions ·Take, in the context of the NAPCP, action towards reducing emissions from the main sources mentioned above.

·Ensure full compliance with EU air-quality standards and maintain downward trends in emissions from air pollutants. This will help the country reduce adverse air-pollution impacts on health and the economy and abide by WHO guideline values in the future. Industrial emissions The main objectives of EU policy on industrial emissions are to: (i) protect air, water and soil; (ii) prevent and manage waste; (iii) improve energy and resource efficiency; (iv) clean up contaminated sites. To achieve this, the EU takes an integrated approach to the prevention and control of routine and accidental industrial emissions. The cornerstone of the policy is the Industrial Emissions Directive (IED). The Commission tabled a proposal in April 2022 . The revision seeks to improve the Directive’s contribution to the zero-pollution objective, as well as its consistency with climate, energy and circular-economy policies The overview of industrial activities regulated by IED below is based on data reported to the EU Registry (2018) . In Slovenia, around 260 industrial installations are required to have a permit based on the IED. The distribution of installations is shown in the Figure 20 below. The industrial sectors in Slovenia with the most IED installations in 2018 were: (i) metals production (24%), (ii) waste management (17%), (iii) chemicals production (15%), and (iv) intensive rearing of poultry and pigs (14%). Figure 20: Number of IED industrial installations per sector in Slovenia, 2018 The industrial sectors identified as contributing the largest burden to the environment for emissions to air were: ·the iron and steel production for cadmium (Cd), mercury (Hg), nickel (Ni), lead (Pb), zinc (Zn) and dioxins; ·the power generation for arsenic (As), chromium (Cr), Copper (Cu), nitrogen oxides (NOx) and sulphur oxides (SOx); ·manure management for ammonia (NH3); ·coating applications for non-methane volatile organic compounds (NMVOCs); and

·mineral activities for particule matter (PM2.5). Figure 21: Emissions to air from IED sectors and rest of national total air emissions in Slovenia, 2018 The environmental burdens for industrial emissions to water mainly result from: (i) the production of pulp, paper and wood for heavy metals and (ii) total organic carbon. The breakdown, based on E-PRTR data, is presented in Figure 22. Figure 22: Relative releases to water from industry in Slovenia, 2018 The EU approach to enforcement under the IED creates strong rights for the public to have access to relevant information and to participate in the permitting process for potentially polluting installations. This empowers the public and NGOs, to ensure that permits are appropriately granted and that the conditions of these permits are complied with. As part of environmental inspection, competent authorities undertake site visits to IED installations to take samples and to gather necessary information. According to Article 23(4) of the IED, site visits must be carried out between once a year and once every 3 years, depending on the environmental risks posed by the installations. In 2018, Slovenia undertook 130 site visits. The largest number of visits were at plants for the production of metals (31% of visits), chemicals production (15% of visits), and waste management (15% of visits). Figure 23: Number of inspections in IED installations in Slovenia in 2018 The development of best-available technique (BAT) reference documents (BREFs) and BAT conclusions ensures good collaboration between stakeholders and enables better implementation of the IED . Since the last EIR report, the Commission adopted BAT conclusions for Slovenia for: (i) waste incineration; (ii) the food, drink and milk Industries; and (iii) surface treatment using organic solvents including the preservation of wood and wood-products with chemicals. The Commission relies on the efforts of national competent authorities to implement the legally binding BAT conclusions and associated BAT emission levels in environmental permits. This should result in considerable and continuous reductions in pollution. In 2019, Slovenia received priority actions to (i) review permits to comply with newly adopted BAT conclusions; and (ii) to strengthen control and enforcement to ensure compliance with BAT conclusions. These actions have been followed up by the Commission through the reporting by Slovenia to the EU Registry. The Commission is currently verifying with Slovenia the reported information about the permits granted for each installation in the scope of the IED. There is an ongoing infringement case against Slovenia concerning the transposition of the requirements of IED Directive into its legislation.

Major industrial accidents prevention – SEVESO The main objectives of EU policy on the prevention of major industrial accidents are to: (i) control major accident hazards involving dangerous substances, especially chemicals; (ii) limit the consequences of such accidents for human health and the environment; (iii) continuously improve prevention, preparedness and response to major accidents. The cornerstone of the policy is Directive 2012/18/EU (the Seveso-III Directive) . The below overview of industrial plants regulated by the Seveso-III Directive (‘Seveso establishments’) is based on data reported to the eSPIRS database (2018) and the Slovenia report on the implementation of the Seveso-III Directive for the period 2015-2018 . In Slovenia, of the 60 Seveso establishments, 36 are categorised as lower-tier establishments (LTEs) and 24 as upper-tier establishments (UTEs), based on the quantity of hazardous substances likely to be present in them. The UTEs are subject to more stringent requirements. The change in the number of Seveso establishments is presented in Figure 24. Figure 24: Number of Seveso establishments in Slovenia (2011, 2014 and 2018) Many Seveso establishments are required to draw up external emergency plans (EEPs). These EEPs are essential to allow proper preparation and effective implementation of the necessary actions to protect the environment and the population should a major industrial accident occur at them. According to Slovenia, an EEP is required for 24 UTEs. In 2018, 24 UTEs had an EEP, and 23 of these EEPs had been tested over the last 3 years. The summary of EEPS in Slovenia is shown in Figure 25. The establishment of EEPs is essential to enable establishments to properly prepare and implement effectively the actions needed to protect the environment and the population should a major industrial accident ever happen. Figure 25: Situation regarding EEP in Slovenia(2018) The following types of information are permenantly available for 80% of the Seveso establishments in Slovenia: (i) information to the public referred to in Annex V of the Seveso-III Directive especially about how the public concerned will be warned if there is a major accident; (ii) information about appropriate behaviour in the event of a major accident; and (iii) information containing the date of the last site visit. This provision on knowledge is an important provision of the Seveso-III Directive, as knowledge of this information by the public may reduce the consequences of a major industrial accident. The share of UTEs for which information on safety measures and requisite behaviours was actively made available to the public in recent years are presented in Figure 26. Figure 26: Share of UTE for which information on safety measures and requisite behaviours was actively made available to the public in Slovenia (2011, 2014 and 2018) Slovenia has had some issues with the transposition of the Seveso-III Directive.

2022 priority action ·Slovenia should strengthen control and enforcement to ensure compliance with Seveso-III Directive provisions, especially on information to the public. Noise The Environmental Noise Directive provides for a common approach to avoid, prevent and reduce the harmful effects of exposure to environmental noise although it does not set noise limits as such. Its main instruments in this respect are noise mapping and planning. A key target under the 2030 zero pollution action plan is to reduce by 30% the share of people disturbed by transport noise. Excessive noise from aircrafts, railways and roads is one of the main causes of environmental-health‐related issues in the EU. It can cause ischaemic heart disease, stroke, interrupted sleep, cognitive impairment and stress . In Slovenia, based on a limited set of data , environmental noise is estimated to cause at least 30 premature deaths and 130 cases of ischaemic heart disease annually . Moreover, some 15 000 people in Slovenia suffer from disturbed sleep. In Slovenia, the proportion of people exposed to noise reduced by 9% between 2012 and 2017. On the basis of the latest full set of information analysed, noise mapping of agglomerations, roads and railways is complete. Water quality and management EU legislation and policy requires that the impact of pressures on transitional, coastal and fresh waters (including surface and ground waters) be significantly reduced. Achieving, maintaining or enhancing a good status of water bodies as defined by the Water Framework Directive will ensure that EU citizens benefit from good quality and safe drinking and bathing water. It will further ensure that the nutrient cycle (nitrogen and phosphorus) is managed in a more sustainable and resource-efficient way. Water Framework Directive The Water Framework Directive (WFD) is the cornerstone of the EU water policy in the 21st century . The WFD and other water-related legislation set the framework for sustainable and integrated water management, which aims at a high level of protection of water resources, prevention of further deterioration, and restoration to good status. By March 2022, Member States were meant to have reported on the third round of river basin management plans (RBMPs). Under the WFD, Member States must draw up management plans for all river basins on their territory. The Commission will assess the reported status of river basins and progress made in these river basins. It will check how the findings identified in its assessment of the second round of RBMPs have been addressed. Slovenia has yet to report on the third round of RBMPs. The Commission published in December 2021 the 6th Implementation Report, which assesses implementation of the WFD and the Floods Directives . This report includes an interim assessment of: (i) the implementation of the programmes of measures; and (ii) the new priority substances. The assessment report for Slovenia , which forms part of the 6th Implementation Report, showed that 78 measures (71 basic and 7 supplementary) were adopted in the Programme of Measures (PoM) for the second management cycle. The measures in the PoM are not related to key type measures and do not give any structured information about significant pressures or chemical substances that could prevent environmental objectives from being achieved. The targeted pressures are described only in a general sense. It was also noted that in 2018 and 2021, the environmental objective had not been met for addressing any of the pressures originating from chemical substances and there are no specific measures to: (i) cover remediation of contaminated sites; (ii) control pollution originating from forestry; (iii) implement natural water retention; and (iv) adapt to climate change. They are only implicitly included in various measures. Based on the reporting in the second round of RBMPs and the data published in 2020 , 58.4% of all surface water bodies in Slovenia have reached good ecological status (with only 3.2% of surface water bodies having unknown status), while only 0.6% have reached good chemical status (with only 0.6% having unknown status). For groundwater, 14.3% of groundwater bodies failed to achieve good chemical status, while 100% are in good quantitative status. Figure 27 below illustrates the proportion of surface water bodies in Slovenia and other European countries that failed to achieve good ecological status. Figure 27. Proportion of surface water bodies (rivers, lakes, transitional and coastal waters) in less than good ecological status per River Basin District Figure 28 presents the percentage of surface water bodies in Slovenia and other European countries failing to achieve good chemical status. For Slovenia, the percentage is 98.7%, if one includes water bodies failing due to substances behaving as ubiquitous PBTs (uPBTs –persistent, bio-accumulative and toxic). Without uPBTs, 99% of surface water bodies achieve good chemical status. Figure 28. Percentage of surface water bodies not achieving good chemical status

Under the IED framework, it should be stressed that over the last decade, Slovenia showed a significant increase (61.1%) in releases of heavy metals like Cd, Hg, Ni, Pb and a decrease in total organic carbon (5.8%) to water . The total water abstracted annually (corresponding to 2019 baseline) from surface and groundwater sources in Slovenia is 943.22 hm3 (EEA, 2022). The percentage for water abstraction per sector is: (i) 0.37% for agriculture, (ii) 18.02% for public water supply, (iii) 77.08% for electricity cooling, (iv) 4.42% for manufacturing, and (v) 0.11% for mining and quarrying (Figure 29). Slovenia uses a register to monitor water abstractions. Small abstractions do not require permits in Slovenia, but all are registered. Figure 29: Water abstraction per sector in Slovenia In Slovenia, the water-exploitation index plus (WEI+) was 0.7% in 2017, which is less than the 20% that is generally considered as an indication of water scarcity . Slovenia is ranked 20th (with 1st indicating a country that has a high WEI+ and therefore a country with water-scarcity problems )in the EU on the WEI+. Figure 30. Water exploitation index plus (WEI+) inside EU, 2017 It is worth mentioning that as a positive step, in its recovery and resilience plan , Slovenia invested over EUR 50 million to support improved drinking water supply and water-saving projects. Furthermore, in what can be considered an example of good practice, Slovenia has set up satellite observation of watercourses. Floods Directive As mentioned earlier, the Commission published in December 2021 the 6th Implementation Report, which assesses the implementation of both the WFD and the Floods Directive. The report includes a review and update of the preliminary flood-risk assessments drawn up by all Member States during the second cycle (2016-2021). Within the 6th Implementation Report, the assessment report showed that the approach that Slovenia took for designating new areas of potential significant flood risk (APSFRs) and for making changes to existing APSFRs (from the first cycle) is straightforward and included a public consultation. The final decision is made by specialist and local staff of the water management authorities. In addition, the following was noted as good practice: in areas where it is estimated that climate change will affect the projected extent of high waters in a way that will result in them being reduced in the future, Slovenia has not reduced the hazard potential and therefore has taken a precautionary approach. Slovenia should consider including long-term trends, other than climate change, in their flood-risk assessments. Slovenia has not yet adopted or reported on the second round of flood-risk management plans under the Floods Directive. The European Commission will assess progress made since the adoption of the first flood-risk management plans and publish a report on this, as it did in 2019. Drinking Water Directive On the Drinking Water Directive , no new assessment of the quality of drinking water has been available since the 2019 EIR. The quality of drinking water in Slovenia has not been indicated as an area of concern. The recast Directive entered into force on 12 January 2021, and Member States have until 12 January 2023 to transpose it into their national legal system. Slovenia will have to comply with these revised quality standards. Bathing Water Directive

On the Bathing Water Directive, Figure 32 shows that in 2020, out of the 361 Slovenian bathing waters, 85.1% were of excellent quality . Detailed information on Slovenian bathing waters is available from a national portal and via an interactive map viewer of the European Environment Agency. Figure 31: Bathing water quality in Europe in the 2020 season Figure 32: Slovenia, bathing water quality 2017-2020 Nitrates Directive According to the last report on the implementation of the Nitrates Directive for 2016-2019, there is a mixed picture on groundwater quality in Slovenia and trends in this respect. On one hand, the percentage of monotoring stations above 50 mg of nitrate per litre (l) decreased from 11.6% (2012-2015) to 9%, which is an improvement. However, the percentage of monitoring stations in the range of 40-50 mg/l increased from 4.5% (2012-2015) to 6.2% (2016-2019), which is a deterioration. However, after considering these two ranges together (i.e. the range above 40 mg of nitrate per l), there was a slight improvement in 2016-2019, with 15.2% of monitoring stations exceeding 40 mg/l (2016-2019) versus 16.1% of monitoring stations (2012-2015). There is also an improvement in the percentage of monitoring stations in the range below 25 mg/l, from 72% (2012-2015) to 73.9% (2016-2019). The situation concerning nitrate concentrations in surface water deteriorated with eutrophication increasing from 4.2% (2012-2015) to 19.4% (2016-2019). Slovenia has an average livestock density and a surplus of nitrogen and phosphorus slightly below the EU average. There is a well-developed network of monitoring stations. There are numerous hotspots, with a nitrate concentration above 50 mg/l. and numerous surface waters are eutrophic. A revised action programme was published in 2017 . The Commission recommends that Slovenia continues to follow up on these hotspots. Urban Waste Water Treatment Directive Slovenia has, over the years, encountered difficulties in meeting its obligations under the Urban Waste Water Treatment Directive (UWWTD). Overall, in Slovenia, the compliance rate is 61%, which is lower than the EU average in 2018. 0.7% of urban wastewater in Slovenia is not collected and/or does not meet the requirements for biological treatment . Figure 33: The proportion of urban waste water that meets all requirements of the UWWTD (collection, biological treatment, biological treatment with nitrogen and/or phosphorus removal) in compliant urban areas of the UWWTD (‘compliance rate’), 2018 In recent years, there have been improvements in compliance with the UWWTD, for which the use of EU funding has been fundamental. But despite these improvements, the incomplete implementation of the UWWTD has led to several rulings of the Court of Justice of the European Union against Slovenia. In 2020, the Commission has decided to refer Slovenia to the Court of Justice because it had not applied the UWWTD properly. 2022 priority actions ·Assess new physical modifications of water bodies in line with Article 4(7) of the WFD. In these assessments, Slovenia has to consider alternative options and adequate mitigation measures. ·Continue to follow up on the nitrates groundwater hotspots and address the increasing eutrophication of surface waters. ·Make efforts to improve the coordinated implementation of water, marine and nature policies.

·Implement the UWWTD completely for all agglomerations under the Directive, by building up the necessary infrastructure. Chemicals The EU seeks to ensure that chemicals are produced and used in way that minimises any significant adverse effects on human health and the environment. In October 2020, the Commission published its chemicals strategy for sustainability – 'Towards a Toxic-Free Environment' , which led to some systemic changes in EU chemicals legislation. The strategy is part of the EU's zero pollution ambition – a key commitment of the European Green Deal. The EU’s chemicals legislation provides baseline protection for human health and the environment. It also ensures stability and predictability for businesses operating within the internal market. Since 2007, the Commission has gathered information on the enforcement of the Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals (‘the REACH’ Regulation’) and the Regulation on Classification, Labelling and Packaging (‘CLP Regulation’). In December 2020, the Commission assessed the Member States’ reports on the implementation and enforcement of these Regulations , in line with Article 117(1) of the REACH Regulation and Article 46(2) of the CLP Regulation. According to the latest available data, national enforcement structures have not changed much in recent years. However, it is apparent from this report that there are still many disparities in the implementation of the REACH and CLP Regulations, and notably in the area of law enforcement. Recorded compliance levels in Member States seem to be quite stable over time, but with a slight worsening trend, which is likely due to: (i) enforcement authorities being more effective in detecting non-compliant products/companies; and (ii) more non-compliant products being put on the EU market. In August 2021, the Commission published a measurable assessment of the enforcement of the two main EU Regulations on chemicals (the REACH Regulation and the CLP Regulation) using a set of indicators on different aspects of enforcement. Responsibility for checking compliance with REACH in Slovenia lies with the following authorities : ·Chemicals Inspection (part of the Chemicals Office of the Republic of Slovenia); ·the Health Inspectorate; ·the Labour Inspectorate. Slovenia has developed and fully implemented both its REACH and CLP enforcement strategies . The strategies include the annual planning of enforcement activities. They are also subject to an annual evaluation and review. As a rule, all infringements of REACH are classed as serious or very serious environmental administrative offences. If the infringement is sufficiently serious, the competent authority may decide to impose further penalties in addition to a fine. That authority may also, where necessary, order the provisional seizure of assets and documents. In Slovenia only four full-time equivalent workers (FTEs) are allocated to REACH and CLP enforcement . However, more than 3 500 REACH and CLP inspections were carried out in the reporting period (2019). Most of the inspections were reactive/non-routine (i.e. investigations in response to complaints, accidents and referrals) compared with proactive inspections. The high percentage of non-compliance cases out of the total number of inspections should be underlined (Figure 34). Figure 34: Percentage % of non-compliance cases out of the total number of REACH and CLP inspections during 2019 per Member State and compared to the EU average 2022 priority action ·Slovenia should upgrade its administrative capacities in implementation and enforcement towards a policy of zero tolerance to instances of non-compliance. 4. Climate Action In line with the Paris Agreement and as part of the European Green Deal, the European Climate Law sets the EU target of reaching climate neutrality by 2050 and reducing its greenhouse gas emissions by 55% by 2030 compared to 1990. The law also limits the contribution that carbon removals can make towards emission reductions in 2030 to ensure that there is sufficient mitigation effort. The EU and its Member States submitted updated Nationally Determined Contribution (NDC) to the UNFCCC in December 2020. The EU is working across all sectors and policies to cut greenhouse gas emissions and make the transition to climate neutral and sustainable economy, as well as addressing unavoidable consequences of climate change. Climate legislation has been adopted to incentivize emissions reductions from power generation, industry, transport, the maritime sector and fluorinated gases (F-gases) used in products. In road transport, current EU legislation requires the greenhouse gas intensity of vehicle fuels to be cut by 6% by 2020 compared to 2010 and sets GHG emission standards for different vehicle categories to be respected . Thanks to the current F-gas Regulation, the EU’s F-gas emissions will be cut by two-thirds by 2030 compared with 2014 levels. From 2021 emissions and removals of greenhouse gases from LULUCF have been included in the EU emission reduction efforts. The EU adaptation policy is an integral part of the European Green Deal.

Starting in 2021, Member States are required to report on their national adaptation policies. The European Climate Law recognises adaptation as a key component of the long-term global response to climate change. It requires Member States and the Union to enhance their adaptation action by introducing a requirement for the implementation of national strategies and regular progress assessments as part of the overall EU governance on climate action. In February 2021, the updated EU adaptation strategy sets out how the EU can adapt to the unavoidable impacts of climate change and become climate resilient by 2050. Key national climate policies and strategies Slovenia has an integrated national energy and climate plan (NECP) for 2021-2030, which is consistent with the national long-term strategy. Slovenia is required to reach climate neutrality in line with the EU general target. The national objective is to reduce GHG emissions by 36% below 2005 levels. In its national recovery and resilience plan, Slovenia allocates 42% of the funds to climate objectives and outlines crucial reforms and investments to further the transition to a more sustainable, low-carbon, and climate-resilient economy. Investments are allocated to clean power, building renovation and sustainable transport (more details in Chapter 5). Adaptation priorities were laid down in the strategic framework for climate change adaptation, adopted by the government in December 2016. It provides a long-term vision, purpose and strategic guidelines for stepping up adaptation-related activities. Between 1990 and 2020, economy-wide greenhouse-gas emissions decreased by 15%, less than the EU average (24%). Figure 35: Total greenhouse gas emissions (incl. international aviation) in Slovenia, 1990-2020 Effort sharing target For emissions not covered by the EU’s emissions trading scheme (ETS), Member States have binding national targets under the Effort Sharing legislation . Under EU legislation, Slovenia has a target to limit the increase of GHG emissions in the non-ETS sectors (buildings, road and domestic maritime transport, agriculture, waste and small industries) to +4% by 2020 and reduce emissions by 15% by 2030, compared to 2005 levels. Slovenia is estimated to largely overachieve its current national 2020 and 2030 targets. Figure 36: Emissions and targets under the Effort Sharing Decision/ Effort Sharing Regulation in Slovenia, 2020 and 2030 as percentage change from 2005 Figure 37: Emissions, annual emission allocations (AEAs) and accumulated surplus/ deficit of AEAs under the Effort Sharing Decision in Slovenia, 2013-2020 Key sectoral developments On road transport, the GHG intensity of vehicle fuels in Slovenia decreased by 2.9% from 2010 to 2019. The country needs to act swiftly to meet the current reduction target of a 6% decrease in GHG intensity by 2020. There are several types of action that Member States can take in this regard, for example: (i) further expanding the use of electricity in road transport; (ii) supporting the use of biofuels, and advanced biofuels in particular; (iii) incentivising the development and deployment of renewable fuels of non-biological origin; and (iv) reducing upstream emissions before refining processes. Road transport in 2019 in Slovenia represented 32% of the total GHG emissions. Emissions in road transport have increased by 29% compared to 2005. Emissions from agriculture have remained at the same level as in 2005. Figure 38: Greenhouse gas emissions by sector in Slovenia – historical emissions 1990-2020, projections 2021-2030

Emissions from buildings have been on a decreasing trend. The national energy and climate plan includes comprehensive information on buildings, including a target to reduce final energy consumption by 20% by 2030 compared to 2005. In the land-use, land-use-change and forestry (LULUCF) sector, Slovenia projects net removals of CO2 equivalent from land use and forestry by 2030. Reported quantities under the Kyoto Protocol for the LULUCF sector in Slovenia show net emissions of, on average, 0.8 Mt CO2-eq in 2013 to 2019. Therefore, Slovenia represents -0.2% of the EU-27’s annual average sink of 344.9 Mt CO2-eq. Using a separate measurement scheme, carbon accounting for the same period shows net ‘debits’ of, on average, 3.9 Mt CO2-eq, which represents -3.4% of the EU-27 accounted sink of 115.0 Mt CO2-eq. Reported net removals for 2013 decrease markedly to net emissions in 2014 that remain on that level until 2018 and slightly decrease in 2019. Accounted quantities show the same pattern with net ‘credits’ (i.e. the equivalent of carbon removals) for 2013 and net debits thereafter. Slovenia is one of three EU Member States with average net emissions and one of six EU Member States that show net emissions for at least one year. In addition, Slovenia is one of six EU Member States with average net debits and one of 14 EU Member States that show net debits for at least one year in this preliminary accounting exercise. Figure 39: Reported and accounted emissions and removals from LULUCF in Slovenia Use of revenues from the auctioning of EU ETS allowances The total revenues from the auctioning of emission allowances in Slovenia under the EU ETS in 2011-2021 were nearly EUR 412 million. In Slovenia, 100% of the auctioning revenues are used for climate and energy projects. 2022 priority actions ·Support energy efficiency, especially through the renovation of buildings. ·Support sustainable transport. ·Increase its uptake of renewable energy. ·Ensure the sustainability of biomass.



Part II: Enabling framework: Implementation tools 5. Financing Environmental investment needs in the European Union

Financing environmental measures is essential for their success. Although most financing comes from national sources, various EU funds contribute significantly, helping to close the financing gap between countries. Post-2020, environmental measures will also be supported by the EU’s COVID-19 Recovery Fund (via the RRF) and the ‘do no significant harm’ (DNSH) principle which runs across the EU budget. The renewed commitments made at COP26 (Glasgow, Oct-Nov 2021) and the Biodiversity Convention (April-May 2022) will also be reflected in the EU budget. Overall environmental investment gaps (EU-27) The EU’s investment needs for the green transition cover a range of interlinked areas. The additional investment needs over the baselines (i.e. the gap between what is needed and what is forecast to be invested if no additional action is taken) for climate, energy and transport were estimated in 2021 at EUR 390 billion a year (EU-27) , with a further EUR 130 billion a year to deliver the EU's core environmental objectives . The costs of climate-change adaptation can also be significant, and are estimated to reach a total of EUR 35-62 billion (narrower scope) or EUR 158-518 billion (wider scope) per year . Those investment needs reflect the implementation objectives to 2020 and to 2030 (except for climate-change adaptation, the costs of which are expected to last over a longer time horizon). A preliminary update of the EU’s core environmental investment gap is provided in Table 1 . Almost 40% of the environmental-investment needs relate to dealing with pollution, which accounts for nearly two thirds of the total gap if combined with water management. The investment gap in the circular economy and waste is estimated to be between EUR 13-28 billion a year, depending on the levels of circularity implemented. The annual biodiversity financing gap is estimated at around EUR 20 billion. Table 1: Estimated breakdown of the EU’s environmental-investment needs, by environmental objective, 2021-2030 (per year) Environmental objective Estimated investment gap (EU27, p.a.) EUR billion % Pollution prevention & control 42.8 39% Water management & industries 26.6 24% Circular economy & waste 13.0 12% Biodiversity & ecosystems 21.5 20% R & D & I and other 6.2 6% Total 110.1 100% Environmental-investment needs in Slovenia There is a clear shift of investment priorities in Slovenia to support climate, energy and transport policies as can be seen in the national recovery and resilience plan. Over EUR 750 million will be spent under the Recovery and Resilience Fund on investments in a wide range of economic sectors such as energy efficiency and energy renovation of housing, clean transport, water management, flood protection and the circular economy. Pollution prevention & control The EU’s first Clean-Air Outlook under the clean- air programme estimated that the total air-pollution-control costs for Slovenia to reach the NECD’s emission-reduction requirements by 2030 amount to EUR 384 million per year. This includes EUR 239 million for capital investment (assuming the 2030 climate and energy targets are achieved). The second EU Clean-Air Outlook suggests that the EU would largely achieve the reductions of air pollutant emissions that correspond to the obligations under the NEC Directive for 2030 if: (i) all relevant legislation adopted up to 2018 is implemented (including all air-pollution legislation and the 2030 climate and energy targets set in 2018); and (ii) Member States also implemented the measures announced in their national air-pollution-control programmes. The only exception is for ammonia (NH3) for 15 Member States, excluding Slovenia. Water management According to the OECD study ‘Financing Water Supply Sanitation and Flood Protection (2020)’, Slovenia has relatively abundant water resources and low abstraction rates. It performs well in the provision of drinking water but significant investment is needed in sanitation infrastructure. Ageing networks and connection challenges need to be addressed. Slovenia also faces significant future flood risks. EU funding has provided a significant share of public funding over the past decade . It is also estimated that Slovenia will need to invest an additional cumulative EUR 894 million by 2030 for drinking water and sanitation. This corresponds to around EUR 89 million in investment needs (capital expenditure) per year, with almost 90% of it related to wastewater . Moreover, the recent 6th Water Framework Directive and Floods Directive Implementation Report and the financial - economic study accompanying it, are also a relevant source of information in this domain. Waste & the circular economy According to a Commission study if Slovenia is to meet the recycling targets for municipal waste and packaging waste, it still needs to invest an additional EUR 109 million (around EUR 16 million per year) in 2021-2027 in: collection, biowaste treatment, recycling reprocessors, waste-sorting facilities and waste-registry digitalisation. This does not include the investment necessary for other key waste streams (plastics, textile, furniture) or for enabling a higher uptake of circularity and waste prevention across the economy.

Biodiversity & ecosystems The recently submitted prioritised action framework (PAF) for Slovenia shows that costs for nature protection (including Natura 2000) in 2021-2027 are about EUR 600 million, or around EUR 57 to EUR 86 million per year. Within total annual costs, the annual one-off costs are EUR 29 million. The main conservation priorities relate to the management of the Natura 2000 network and restoration and/or maintenance of grassland, forest and freshwater habitats . This excludes additional costs to implement the biodiversity strategy to 2030, including on increased protection and restoration. EU environmental funding 2014-2020 The multiannual financial framework (MFF) for 2014-2020 allocated almost EUR 960 billion (in commitments, 2011 prices) for the EU to spend over this period. The commitment in this 2014-2020 MFF to the green transition included a 20% spending target for climate. It also included funding opportunities for the environment, in particular, under the European Structural and Investment (ESI) Funds . The 2014-2020 MFF budget was subsequently topped up with over EUR 50 billion (in current prices) from the REACT-EU programme for cohesion-policy action against COVID-19 . Slovenia received EUR 4.5 billion from the ESI Funds over 2014-2020 to invest in job creation and a sustainable and healthy European economy and environment. The planned direct environmental investment amounted to EUR 514.4 million of this 4.5 billion with a further EUR 258.8 million identified as indirect environmental investment, totalling EUR 773.2 million. Figure 40 shows an overview of (planned) individual ESI Funds earmarked for Slovenia (EU amounts, without national amounts). Figure 40: ESI Funds allocated to Slovenia, including environmental investments 2014-2020 Table 2: Direct and indirect Environmental investments under the ESI Funds in Slovenia, 2014-2020 Instrument Allocations for the environment (EUR million) Under Cohesion policy (ERDF + CF) Direct environmental investments water air quality biodiversity and nature land rehabilitation climate and risk management Indirect environmental investments renewable energy energy efficiency other energy sustainable transport business development, R&I 767.4 508.5 303.3 38.9 41.0 32.4 92.8 258.8 16.5 86.8 13.6 115.3 26.6 Under EAFRD/rural development 0 Under EMFF Direct environmental investments environment protection & resource efficiency 5.8 5.8 5.8 Under ESI Funds total Direct environmental investments Indirect environmental investments 773.2 514.4 258.8 Funding for the environment from the ESI Funds has also been supplemented by other EU funding programmes available to all Member States, such as the LIFE programme or Horizon 2020, which added up to an estimated total of EUR 832 million of EU environmental financing for Slovenia in 2014-2020. The LIFE programme is entirely dedicated to environmental and climate objectives. It finances demonstration and best-practice actions for green solutions to be deployed. In the 2014-2020 period, Slovenia received EU support for 11 LIFE projects worth EUR 36.4 million from the LIFE programme for nature and environmental projects (out of 1 028 EU-27 LIFE projects financed with a total EU contribution of EUR 1.74 billion) . In 2014-2020, Horizon 2020 allocated about EUR 22.3 million for Slovenia for the environment, which is about 5.9% of Slovenia’s total allocation under Horizon 2020 . These Horizon 2020 funds are directed at Slovenian environmental projects focused in particular on the circular economy, research and innovation biodiversity, climate action and biodiversity. From the European Fund for Strategic Investments (EFSI), Slovenia did not receive any environmental funding out of its total allocation (EUR 153 million) . Furthermore, from the EIB, Slovenia did not receive any environmental support out of the total EIB loans for Slovenia (EUR 1.6 billion). The country ranks number 23 in the amount of total EIB lending it received in this period. In 2020, the EIB provided EUR 24.2 billion in funding across Europe to fight climate change, 37% of its total financing. It also provided EUR 1.8 billion (3% of its financing) for broader environmental lending . EU environmental funding 2021-2027 The 2020 European Green Deal investment plan calls for EUR 1 trillion in green investments (public and private) to be made across the EU by 2030. The 2021-2027 MFF and the NextGenerationEU spending programme will mobilise EUR 2.018 trillion (in current prices) to support the recovery from COVID-19 and the EU's long-term priorities, including environmental protection . Following the EU Green Deal’s pledge to ‘do no harm’ and the Interinstitutional Agreement on the 2021-2027 MFF , 30% of the EU budget in 2021-2027 will support climate efforts, while biodiversity will receive 7.5% of the EU budget as of 2024 and 10% as of 2026. Increased programming of financial resources is required to reach these levels of spending on biodiversity, specifically under the 2021-2027 cohesion policy and the 2023-2027 CAP.

Sustainable finance significantly increases transparency on environmental sustainability (a goal promoted by the EU Taxonomy) . It also strengthens non-financial reporting requirements and facilitates the issuance of green bonds (by developing the EU green bond standard ). Reinforced by the renewed sustainable finance strategy (2020) , sustainable finance will increase investment flows to climate and the environment. The new strategy on adaptation to climate change can help to close the insurance-protection gap, which currently leaves many risks from climate-related events uninsured . The EIB will align 50% of its lending for climate and environment projects by 2025 with a EUR 250 billion contribution to the Green Deal investment plan by 2027. Table 3 provides an overview of the EU funds earmarked specifically for Slovenia for the 2021-2027 period. These funds are also supplemented by other EU funding programmes available to all Member States. Table 3: Key 2021-2027 EU funds allocated to Slovenia (current prices), 2021-2027 Instrument Country funding allocation (million EUR) Cohesion policy ERDF CF ESF+ ETC (ERDF) Total: 3 058.4 1 537.9 718.2 727.3 75 Just Transition Fund 258.7 EAFRD/rural development under CAP Strategic Plans 2023-2027 550.9 European Maritime, Fisheries and Aquaculture Fund (EMFAF) 23.9 Recovery and Resilience Facility (RRF) 2021 – 2026 1 776.9 (grants) 705.4 (loans) In Slovenia, the programming for most EU funds (cohesion policy funds, EAFRD and EMFAF) is ongoing. However, the negotiations have been concluded under the RRF. Slovenia’s national recovery and resilience plan (RRP) responds to the urgent need to foster a strong recovery and make Slovenia more resilient in the future. The reforms and investments in the plan will help Slovenia become more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. To this end, the plan consists of 55 investments and 33 reforms. Slovenia requested almost EUR 1.8 billion in grants and over EUR 700 million in loans. 42.5% of the plan will support climate objectives. This exceeds the RRF’s 37% climate target. In terms of the green transition, the plan includes reforms for renewable energy, sustainable mobility and the circular economy to support the decarbonisation of the country’s economy. The investments will focus on: (i) energy efficiency and seismic renovation of buildings (EUR 230 million); (ii) decarbonisation, digitalisation and safety of railway infrastructure transport (EUR 292 million); (iii) drinking water supply, water-saving and wastewater projects (EUR 54 million); and (iv) actions to facilitate the transition to a circular economy (EUR 48 million) . Figure 41: Climate expenditure in RRP (2021-2026) Under NextGenerationEU, the Commission will issue up to EUR 250 billion of EU green bonds (one third of all bonds issued under NextGeneration EU) until 2026 that will comply with the general spirit of the ‘do no significant harm’ principle. However, this EUR 250 billion in green bonds will not be subject to the currently developed delegated acts related to the EU Taxonomy and will not fully align with the proposed EU standard for green bonds. In addition to EU funds earmarked specifically for Slovenia in 2021-2027, there are also funding programmes that can be accessed at EU level and which are open to all Member States. These include the LIFE programme (EUR 5.4 billion), Horizon Europe (EUR 95.5 billion) , the Connecting Europe Facility (EUR 33.7 billion) or the funds to be mobilised via the InvestEU programme . These other sources of funding will also support the green transition, including through research and innovation activities for environmental protection (Horizon Europe) , clean transport and energy (the Connecting Europe Facility) or sustainable infrastructure (InvestEU) . National expenditure on environmental protection Total expenditure on environmental protection (including all relevant current and capital expenditure ) in the EU-27 was EUR 272.6 billion in 2020, representing 2% of EU-27 GDP. This percentage has remained quite stable over time. Although the largest absolute amounts of expenditure are concentrated in a few countries, most countries spend between 1-2% of their GDP on environmental protection. Slovenia spends 2% of its GDP on environmental protection. Of this spending, the EU-27's capital expenditure (Capex) on environmental protection (i.e. investment) amounted to EUR 56.3 billion in 2018, falling to EUR 54.5 billion in 2020, representing around 0.4% of EU-27 GDP. Most Member States invested 0.2-0.5% of their GDP in environmental protection, with Slovenia slightly above that, investing 0.6% of its GDP. During 2014-2020, this totalled to around EUR 376 billion of environmental investment in the EU-27, and to EUR 2.6 billion for Slovenia. Figure 42: Direct and indirect environmental protection investments in the EU-27 (EUR million and % of GDP), 2018

By institutional sector, around 32% of Slovenia’s investment in environmental protection (capital expenditure) came from the general government, just 5% came from specialist producers (of environmental-protection services, e.g. waste and water companies) and the lion’s share 64% (the highest compared with other EU Member States) came from industry (businesses) not specialised in environmental-protection services. At EU level, 37% of investment in environmental protection comes from governments, 33% from specialist producers and 30% from industry (businesses) not specialised in environmental protection. Figure 43: EU-27 Member States' environmental protection investments (Capex) by institutional sectors (Total economy = 100%, 2018)

A breakdown of investment by environmental topic is partially available, but only at the level of institutional sectors (rather than at economy level), due to different reporting patterns across the sectors . In 2018, at Slovenia’s general-government level, 70% of environmental-protection investments went to wastewater, 11% to environmental R&D, 7% to waste management and 7% to biodiversity. For the country’s specialist producers, waste management was the key priority with 92% of relevant investments. For industry (businesses) not specialised in environmental protection, waste management attracted 29% of environmental investments, air protection 25%, wastewater 15% and biodiversity protection 7%, to name the most significant items. In 2020, the total annual issuance of green bonds worldwide amounted to USD 279.8 billion. Of this, the total annual issuance of European green bonds (including some non-EU countries) was USD 156 billion (EUR 137 billion ), up from USD 117 billion (EUR 105 billion) in 2019. Looking only at EU-27 Member States, green-bond issuance in 2020 was EUR 124 billion. In 2014-2020, 83% of the green bonds issued by European countries served objectives in energy, buildings or transport, while 8% supported water and waste, with a further 6% supporting land use, with links to ecosystem conservation and restoration. These data are based on the climate-bonds taxonomy, which is broadly similar to the EU Taxonomy . Of this 2020 annual EU green-bond issuance, Slovenia had no issuance. Figure 44: Annual EU green bond issuance in 2020 (EUR billion) Green budget tools Green taxation and tax reform Slovenia’s revenue from environmental taxes in 2020 was above the EU average, as shown in Figure 45 (2.95% compared to the EU-27 average of 2.24%). Within this, energy and transport taxation represent the highest share with 2.38% and 0.45% of GDP respectively, while pollution/resource tax accounts for 0.12% of GDP . Figure 45: Environmental taxes in the EU27 (2020)

The 2019 European Green Deal underlines that well-designed tax reforms can boost economic growth and resilience, foster a fairer society and promote a just transition. Tax reforms can contribute to this by sending the right price signals and incentives to economic actors. The Green Deal creates the context for broad-based tax reforms, the removal of fossil-fuel subsidies, and a shift in the tax burden from labour to pollution. It achieves this while simultaneously taking account of social considerations . The Green Deal promotes the ‘polluter-pays principle’ , which stipulates that polluters should bear the cost of measures to prevent, control and remedy pollution. The polluter-pays principle is facilitated by the EU Commission’s Technical Support Instrument (TSI) flagship project on greening taxes. According to a Commission’s study on Green taxation and other economic instruments (2021), Slovenia applies polluter-pays economic instruments for air, water and waste . Environmentally-harmful subsidies Addressing and removing environmentally-harmful subsidies is a further step towards wider fiscal reforms.

Fossil-fuel subsidies are costly for public budgets, and make it difficult to achieve the Green Deal objectives. In many cases these subsidies also counteract incentives for investments in green technologies. Annual fossil-fuel subsidies have been around EUR 55 billion in the EU since 2015. They rose by 4% between 2015 and 2019, although some countries (such as Latvia, Lithuania Sweden, Greece or Ireland) managed to decrease them in this period. In the EU, subsidies for petroleum products in sectors such as transport and agriculture continued to increase in 2015-2019. However, subsidies for coal and lignite decreased, largely due to the diminishing role of solid fuels in electricity generation. As a share of GDP, fossil-fuel subsidies ranged from 1.2% in Hungary to less than 0.1% in Malta in 2019 (with an EU average of 0.4%). In 2019, total fossil-fuel subsidies in Slovenia amounted to EUR 0.1 billion, representing 0.13% of the GDP. In 2020, the EU-27’s total amount of fossil-fuel subsidies decreased to EUR 52 billion (due to falling consumption trends amid the COVID-19-related restrictions). Without Member State actions, these subsidies are likely to rebound as economic activity picks up from 2020 . Figure 46: Trends in natural gas, petroleum products, electricity and coal subsidies in Slovenia Slovenia allocated more than the EU average on fossil-fuel subsidies — and significantly higher than on renewable-energy subsidies . Environmentally harmful subsidies in Slovenia include: (i) exemptions (or partial refund) from excise duty on fuels for different operators; (ii) agricultural premiums (beef, veal, pork); (iii) subsidies in the energy sector for the production of electricity from renewables and combined heat and power plants or feed-in tariffs (for natural gas used in combined heat and power plants, biomass, geothermal, ocean, small-scale hydro, solar (PV), waste, wind). Current green budgeting practices ‘Green budgeting’ encompasses various climate and environmental tagging and tracking practices in budgets. Some EU Member states already use certain green-budgeting practices . Green budgeting helps identify and track green expenditure and green revenues to increase transparency on the environmental implications of budgetary policies. This is aimed at improving policy coherence and supporting green policies (including climate and environmental objectives) . The Commission has also drawn up climate-proofing and sustainability-proofing guidance as tools to assess project eligibility and a project’s compliance with environmental legislation and criteria . The Commission developed a green-budgeting reference framework and launched a TSI project on green budgeting in 2021 to help Member States develop or further develop national green-budgeting frameworks to improve policy coherence and the green transition. Slovenia participates in th