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Assessment Report on Circular Economy Policies and CSO/SME Capacities

PIN Kosovo

Acknowledgements

PIN, its partner Let’s Do It Peja and the Author would like to express special thanks to all stakeholders who participated in this study. Thank you for your valuable input and willingness to share important information, valuable opinions and useful recommendations with us. We strongly believe that only through a collaborative process we can make progress toward a Circular Economy.

Disclaimer

This publication was produced with the financial support of the European Union. Its contents are the sole responsibility of People in Need and Let’s Do It Peja and do not necessarily reflect the views of the European Union.

Table of Content

List of Tables & Figures

List of Acronyms

I. INTRODUCTION

Project Summary

Scope of the Assignment

Methodology

II. KOSOVO REGULATORY FRAMEWORK ON CIRCULAR ECONOMY

Kosovo Integrated Waste Management Strategy (2021- 2030)

Extended producer responsibility

Extended producer responsibility

Deposit Refund System

Circular Economy Roadmap of Kosovo

III. CAPACITIES OF CIVIL SOCIETY ORGANIZATIONS WORKING IN THE FIELD OF CIRCULAR ECONOMY AND GREEN AGENDA IN KOSOVO

CSOs Experience

CSOs Human Resources

CSOs Financial Viability

CSO Policy Documents and Operating Manuals

CSOs Role in Circular Economy Policy Reforms

CSOs Involvement in Circular Economy Outreach

Gaps of CSOs for Becoming Active Agents in Transition toward Circular Economy

Capacity Building Needs

SWOT Analyses of CSOs

IV. CAPACITIES OF SMALL AND MEDIUM-SIZED ENTERPRISES WORKING IN CIRCULAR ECONOMY IN KOSOVO

SMEs Financial Viability

SMEs Documents and Operating Manuals

Capacity Building Needs

SWOT Analyses of SMEs

V. RECOMMENDATIONS

Government of Kosovo

Community of Donors

Civil Society Organizations in Kosovo

Small and Medium-Sized Enterprises in Kosovo

People in Need and Let’s Do It Peja

REFERENCE LIST

Table/Figure

Figure 1. Kosovo Policies and Laws Related to Circular Economy

Figure 2. Year of registration of CSOs

Figure 3. Number of CSO employees in 2023

Figure 4. Number of projects by CSOs

Figure 5. CSO Policies and manuals in place

Figure 6. Involvement of CSOs in policy reforms in Kosovo

Figure 7. Implemented outreach initiatives by CSOs

Figure 8. Self-identified gaps of CSOs

Figure 9. Self-identified training needs of CSOs

Table 1. SWOT analyses of CSOs

Table 2. SWOT analyses of SMEs

Acronyms

CSO Civil Society Organisation

EGD European Green Deal

EU European Union

GESI Gender Equality and Social Inclusion

GoK Government of Kosovo

LDIP Let’s Do it Peja

MESPI Ministry of Environment, Spatial Planning and Infrastructure (Kosovo)

PIN People in Need

Sofia Declaration Sofia Declaration on the Green Agenda for the Western Balkans

WB Western Balkans

I. INTRODUCTION

Project Summary

People in Need (PIN), in cooperation with Let’s Do It Peja (LDIP), is implementing the Circular Economy for Green Transition project in Kosovo, funded by the European Union.

The project has three key objectives:

  1. Increasing the capacities of CSOs on the circular economy, encouraging a mindset shift towards resource usage, minimizing waste generation and maximising material recycling and re-use. Additionally, PIN will ensure CSOs are better equipped to plan strategic advocacy toward decision-makers and support CSOs in developing an advocacy plan to push forward the circular economy agenda in the political and economic spheres.
  2. Mobilizing a wide range of stakeholders, including CSOs and private sector representatives, to establish an informal gender-inclusive network that will collaborate to determine actions and conduct joint advocacy activities, such as organizing events to showcase circular economy practices and developing and disseminating policy briefs aimed at influencing policy reform in the circular economy field. The project will also promote social entrepreneurship and innovative circular economy initiatives.
  3. Raising awareness among citizens, especially youth, to exert further pressure on authorities and the private sector to a transition toward win-win solutions such as new product design to facilitate such re-use and recycling, or innovative product-service models that transform the way we produce and consume.

Scope of the Assignment

This report is commissioned by People in Need within the scope of the Circular Economy for Green Transition in Kosovo project, funded by the European Union.

The report focuses on the assessment of Kosovo’s regulatory framework in the field of Circular Economy and the Assessment of the capacities of Civil Society Organizations to contribute to the implementation of the “Sofia Declaration” – Action Plan 2021 – 2030. The report aims to address questions regarding the current capacities and emerging skills necessary to advance circularity in Kosovo.

Methodology

In line with the inception report, a mixed-method approach was applied. The methodology was chosen to accurately and conveniently collect all relevant data within the scope of the study, as well as to ensure data validity and accuracy.

Secondary Data Review: Initially an intensive and comprehensive secondary data collection took place. All study reports produced by relevant actors were reviewed in order to understand the stakeholder ecosystem and main trends since 2020, after the signing of the Sofia Declaration by Western Balkan countries.

Capacity Assessment of CSOs: A standardized questionnaire was designed and distributed by PIN to relevant stakeholders in order to collect data on their experiences, capacities, intervention, and capacity-building needs. A total of 16 CSOs were included in this study, with all data collection activities occurring between July and August 2023.

The questionnaire included sections on:

Capacity Assessment of SMEs: A standardized questionnaire was designed and distributed by PIN to relevant stakeholders in order to collect data on their experiences, capacities, intervention, and capacity-building needs. In total 6 SMEs were included in this study. All data collection activities took place between July and September 2023.

Online Survey with CSOs: In line with the inception report, for the purpose of getting the information on number of CSOs actively supporting the government in drafting circular economy-related policies and obtaining the number of CSOs engaged in outreach campaigns related to a circular economy, an online survey was distributed to all registered CSOs (NGOs). The list is available at the state portal: https://ojq.rks-gov.net/ KerkoOJQ.aspx. In total, we received 25 responses to our Survey. The online survey is taken as a source for calculations presented in Figures 6 and 7.

In line with research questions specified in the inception report, respondents included in the study are representatives of CSOs implementing projects in the field of circular economy, or closely related fields.

Data Limitations: Findings presented in the report related to CSOs’ internal human resources and internal policies, manuals and regulations in place, rely solely on self- reporting by representatives of CSOs. There was no fact-checking to verify the accuracy of these declarations. Additionally, the assessment methodology did not include a review of the quality of internal policies, manuals and regulations.

Report Content: In this Assessment Report, data is presented in tables, infographics and figures and is supported by a logical interpretation. The report contains findings and recommendations, all findings grouped according to research questions.

The report begins by with an overview of the regulatory framework in the Circular Economy sector in Kosovo, including information on main trends. Subsequently, we discuss CSOs/ SMEs’ capacities before presenting the findings regarding skills demand. In the recommendation section, we provide some targeted recommendations to all stakeholders in Kosovo with the aim of guiding future interventions in the Circular Economy sector.

II. KOSOVO REGULATORY FRAMEWORK ON CIRCULAR ECONOMY

Circular Economy(1), as a concept, was emphasised in the Sofia Declaration on the Green Agenda for the Western Balkans, a document presenting a joint statement of commitment from the WB countries, including Kosovo, to work on joint efforts to promote the Circular Economy within their respective states.

Under Chapter II, Circular Economy of Sofia Declaration on the Green Agenda for the Western Balkans, it is highlighted that: We (Western Balkan countries) commit to the process of transition from a linear to a circular economy being fully aware of the necessity for research and innovation system to support this transition.(2)

One of the actions mentioned in the Sofia Declaration is that Western Balkan Countries, including Kosovo, will develop Circular Economy strategies that encompass the entire lifecycle of products, waste prevention, and modern waste management and recycling, re- use, repair and re-manufacturing.

The Sofia Declaration was further unfolded by the Action Plan for the implementation of the Sofia Declaration on the Green Agenda for the Western Balkans 2021-2030. Under the Sofia Declaration-Action Plan, it is emphasized that: Western Balkans should define a comprehensive framework for the transition towards CE through developing and adopting economy-wide Circular Economy Strategies by 2023. In addition to this, Western Balkan economies should develop/update Circular Economy Roadmaps within the same period. These documents should announce a concrete set of deliverables and a quantifiable timeline of implementation. They will establish the necessary framework for a swift transition to a circular economy by integrating the objectives of the EGD (European Green Deal) and closing the gap in the process of alignment with the existing EU acquis.(3)

Kosovo has not made progress in developing and adopting an economy-wide Circular Economy Strategy. According to representatives of the Kosovo Government and the Kosovo Agency for Environmental Protection, the country has chosen to address the Circular Economy not through a standalone strategy but rather by incorporating it into the Kosovo Integrated Waste Management Strategy and Action Plan (2021- 2030).(4)

Kosovo Integrated Waste Management Strategy (2021- 2030)(5) has embodied Circular Strategy as one out of its four Strategic Objectives. Under Strategic Objective 4 – Promote the values and practices of a Circular Economy, of the Integrated Waste Management Strategy (2021- 2030), it is emphasized that: Public awareness and behaviour change campaigns will be designed and launched. Key themes for the campaigns will include anti-littering, reuse, recycling and illegal dumping. Structured learning will be included in the school curriculum. The strategy goes on to detail specific objectives under this Strategic Objective, including: Raise awareness of the importance and benefits of waste management and recycling; Stimulate innovations in waste prevention; and Establish reuse and recycling systems based on the extended producer responsibility concept.

Based on Kosovo Integrated Waste Management Strategy (2021- 2030) raising awareness of the importance and benefits of waste management and recycling will be accomplished through designing and launching public awareness and behaviour change campaigns. Key campaign themes will include anti-littering, reuse, recycling and illegal dumping. The impact of these awareness-raising campaigns will be measured in 2024, 2027 and 2030. The campaigns will be implemented between 2024-2027 and 2028 and 2030, with the funding for the campaigns provided through technical assistance projects.(6)

Based on the Kosovo Integrated Waste Management Strategy (2021- 2030), efforts to stimulate innovations in waste prevention will be supported through innovation grants for projects that promote waste prevention, reuse and recycling, with a particular focus on reducing food waste and finding alternatives to plastic packaging and products. The first round of grant applications for innovative solutions will be concluded in 2024, supporting at least 10 projects. The budget for the grant scheme is EUR 33,000 and will be supported by the Kosovo Ministry of Economic Development.(7)

Extended producer responsibility(8), as outlined in Law No. 02/L-30 on Waste of 2008 stipulates that manufacturers, distributors, retailers, importers of goods that affect the growth of the quantity of waste, take responsibility for waste generated during activities. Manufacturers hold the greatest responsibility because they can have an effect on the packages of the goods produced. Manufacturer is also obliged to reduce the amount of waste on the goods he produces, to develop production of recycling goods and to establish a market for products that are recyclable and reusable. This principle corresponds to the concept of ‘extended producer responsibility’, whereby the producer takes responsibility for waste produced at every stage in the product’s life-cycle, in particular in relation to certain priority waste streams.(9)

Extended producer responsibility(10) was further elaborated in Law No. 08 l-071 on Amending and Supplementing Law No.04 l-060 on Waste, Article 1.64. Extended producer responsibility scheme – means a set of measures taken by the Ministry (MESPI) to ensure that producers of products bear financial responsibility or financial and organizational responsibility for the management of the waste stage of a product’s life cycle. It further states that the Ministry (MESPI) with a sub-legal act determines the extended responsibility of the producer and importer of the product, according to the principle “polluter pays”.(11)

In Kosovo Integrated Waste Management Strategy (2021- 2030), the concept of Extended Producer Responsibility is presented as a Specific Objective under Strategic Objective 4: Promote the values and practices of a Circular Economy, with an emphasis on industrial and hazardous waste management. According to the Kosovo Integrated Waste Management Strategy(12) (2021- 2030), Kosovo intends to progress towards implementing Extended Producer Responsibility (EPR), initially focusing on packaging, electrical and electronic appliances (WEEE), batteries and cars. Different schemes will be implemented for each of these four-priority product/materials fractions. This is foreseen to happen by 2024.

Deposit Refund System(13) is another strategic direction of MESPI stipulated in Law No. 08 l-071 on Amending and Supplementing Law No. 04 l-060 on Waste, Article 1.65. Deposit Refund System means a deposit refund system, or a fee deposited as an advance or a deposit refund scheme, or a surcharge on the price of a product when purchased and a discount when refunded (i.e. payment of a sum of money/deposits for recyclable packaging such as i.e. bottles, cans, etc.) that is refundable when reusable or recyclable packaging is returned.

It is important to note that the Ministry of Environment, Spatial Planning and Infrastructure is working on completing the legal infrastructure through drafting bylaws that will regulate the Deposit Refund System in Kosovo.

Furthermore, the Ministry has drafted several Administrative Instructions that are pertinent to advancing the circular economy sector in Kosovo:

According to the Ministry of Environment, Spatial Planning and Infrastructure, the implementation of administrative instructions is lagging behind, primarily due to the lack of enforcement mechanisms. Their operational capacities, including the number of Inspectors, are very low compared to the needs. It is to be emphasised that the conclusion on lack of implementation is not based on any formal assessment but rather on anecdotal data and simple observations.

According to the Kosovo legislative programme for 2023(20) the Ministry of Environment, Spatial Planning and Infrastructure will sponsor two Law initiatives related to green agenda and environmental protection: Draft Law on Climate Change; and Draft Law on Strategic Environmental Assessment.

Circular Economy Roadmap of Kosovo(21) – In line with the Action Plan for the implementation of the Sofia Declaration on the Green Agenda for the Western Balkans 2021-2030, Kosovo has made positive progress in drafting the Circular Economy Roadmap.

The Kosovo Circular Economy Roadmap identifies six priority areas, including food and forest systems, the creative and retail sectors, the built environment and the manufacturing sector.

The purpose of the Circular Economy Roadmap is to set a basis for the transition from a linear model to a circular economy in Kosovo, aiming to bring together all relevant stakeholders – public institutions, international organizations, businesses, CSOs, academia and the general public – to ensure a successful and inclusive transformation process. As stated in the document itself: The Circular Economy Roadmap for Kosovo represents a stepping stone that aims to initiate the dialogue between decision-makers, private sector representatives, academia and research and civil society, and map the priority areas along with opportunities to drive the country’s circular transition. It is by no means a policy document, but rather a foundation for future stakeholder efforts on their journey of circular transition.

The Circular Economy Roadmap for Kosovo presents a step forward compared to the Integrated Waste Management Strategy, in identifying key stakeholders and presenting the circular economy as something that goes beyond waste recycling. It encompasses concepts such as reducing food waste, exploring alternative protein sources, and promoting bioenergy, biofuels, and bio-based materials.

The Roadmap identifies seven horizontal areas of the circular economy of Kosovo, including waste management, digitalization and ICT, energy, education for sustainable and circular practices, green public procurement, transport and water management.

In the current regulatory framework in Kosovo, the Circular Economy is primarily addressed through Strategies, Laws and Administrative Instruction related to waste management. However, it is important to note that the full implementation of key concepts within the Circular Economy, outlined in the Kosovo Integrated Waste Management Strategy and Kosovo Law on Waste (Extended producer responsibility and the Deposit Refund System), is pending due to the lack of progress in drafting necessary sub-legal acts, particularly Administrative Instructions, which are crucial for enhancing the regulatory framework.

It is worth highlighting that two CE-related documents, namely the Kosovo Integrated Waste Management Strategy and Circular Economy Roadmap for Kosovo do not provide specific guidance for GESI mainstreaming through policy interventions. These documents lack elaboration of the needs of different groups within society, and they do not outline particular measures to address the needs of specific groups.

Fig. 1. Kosovo Policies and Laws Related to Circular Economy

III. CAPACITIES OF CIVIL SOCIETY ORGANIZATIONS WORKING IN THE FIELD OF CIRCULAR ECONOMY AND GREEN AGENDA IN KOSOVO

The role of civil society in raising awareness and fostering people’s behaviour change in the Circular Economy is duly recognized in various policy documents in Kosovo. Notably, the Circular Economy Roadmap for Kosovo underscores that the roadmap itself aims to set a foundation for initiating cooperation between decision-makers, civil society and other relevant stakeholders as a means to expedite the country’s transition towards a circular economy.

According to the CSO Sustainability Index(22) the Government Strategy for Cooperation with Civil Society 2019-2023 serves as a formal channel for government cooperation with the sector. Although the first objective of the strategy is to increase the participation of civil society in policymaking, there has been limited progress in this area since the strategy’s adoption.

To empower CSOs to play an active role in Kosovo’s transition to a Circular Economy, addressing their specific needs and challenges is of paramount importance. The findings below present a situation analysis of CSOs, aiming to provide a guideline on strengthening CSO capacities to become active stakeholders in upcoming country interventions toward Circular Economy.

Findings from the primary data collection involving self-assessment questionnaires and field visits to 16 civil CSOs engaged in the field of Circular Economy and the Green Agenda reveal the following insights.

CSOs Experience – As illustrated in the chart below (Figure 2), the majority of CSOs (62%) involved in the green agenda have been established for less than 10 years. Approximately 18% of them are newly established CSOs having less than 5 years of experience, while approximately 38% of CSOs have been established for more than 10 years.

Fig. 2. Year of registration of CSOs

CSOs Human Resources – As illustrated in the chart below (Figure 3), the majority of CSOs (62%) working in the field of green agenda have six or more staff employed. In the context of Kosovo’s CSOs, this can be considered well-staffed. Approximately 38 percent of CSOs have 5 or fewer employees which could be considered as CSOs operating under limited human capacities. For organizations with fewer than five staff members, there may be challenges related to ensuring the independence of functions such as finances, procurement, human resources, monitoring and evaluation, and project management, as individuals may need to assume multiple roles due to limited personnel resources.

Fig. 3. Number of CSO employees in 2023

According to the findings, all regular employees of CSO have at least a university degree. The predominant educational background among CSO employees is in Social Sciences and Business Administration. Approximately half of the CSOs (44%) stated to have at least one staff being graduated in Environmental Sciences, 25 percent have at least one staff graduated in Agriculture and 25 percent have at least one graduated in Science and Technology.

Among all CSOs surveyed, 56% of employees are female, while 44% are male. Approximately 57% of CSOs have a higher number of female employees than male employees. In the position of Executive Director, approximately 62% are male, and 38% are female.

According to the findings, 50% of CSOs currently include volunteers as part of their team.

According to the CSO Sustainability Index(23) the short-term nature of most CSO funding undermines the organizations’ ability to hire and maintain full-time staff on permanent contracts. Most CSOs cannot afford professional IT, legal, and accounting services.

CSOs Financial Viability – As illustrated in the chart below (Figure 4), 25% of CSOs have no financial security or ensured projects for 2024. This percentage increases to 56% of CSOs having no ensured project for 2025. Generally, this is a trend for CSOs in Kosovo. This affects highly their operations and mission. This also has a great impact on the profiling of CSOs. The majority of CSOs apply and implement projects of different natures, based on the availability of funds. Therefore, the CSO sector is heavily impacted by donor policies and donor-set priorities.

According to the CSO Sustainability Index(24) the sector’s heavy reliance on short- term funding sources and single donors can limit financial sustainability. The majority of CSOs plan and operate on a short-term basis and their finances tend to be unpredictable beyond a few months’ outlook. This puts significant pressure on organizations to apply for projects and activities that diverge from their core missions and purposes.

Fig. 4. Number of projects by CSOs

According to the CSO Sustainability Index(25), the CSO sector’s financial viability improved moderately in 2021 due to the increased availability and predictability of public funding, which is the largest source of funding for CSOs in Kosovo. The 2021 Report on Public Financial Support for Non-Governmental Organizations shows that public funding increased across all categories of support. Fifty-seven government institutions provided more than EUR 29 million to CSOs, including EUR 15 million from central government bodies and EUR 14 million from municipalities. This represents a significant increase when compared to the previous year’s average of EUR 15 million in funding.

CSO Policy Documents and Operating Manuals – As illustrated in the chart below (Figure 5) only 38% of CSOs have a fundraising strategy in place. Approximately 50% of CSOs have GESI or Comm and Outreach Strategies, and 56% have a Monitoring and Evaluation Plan.

Regarding internal operating manuals, the majority of CSOs, approximately 75% have financial management handbooks, followed by 50 percent having procurement guidelines in place, and 44% having human resource management guidelines/handbooks in place.

The situation is better when it comes to Work Plans and Annual Reports. Approximately 88% have Work Plans for 2023 and 82% have Annual Reports for 2022 in place.

Fig. 5. CSO Policies and Manuals in Place

When it comes to the thematic focus of CSOs, the majority of CSOs (82%) selected environment protection and climate change as their primary area of focus, followed by 63% choosing Circular Economy, waste management and recycling. Approximately 57% have also been active in public policy, including citizen participation in decision-making.

The primary target groups of these participating CSOs are Youth (100%), followed by Women, Children and Ethnic Minorities (82%). Fewer CSOs have targeted People/persons with Disabilities (44%), the Elderly (38%) and Migrants (19%).

The majority of CSOs (62%) have declared that they had more than 500 direct beneficiaries in 2022, while the remaining 38% had fewer than 500 direct beneficiaries. Overall, the number of female beneficiaries is higher than that of males. When considering all CSOs together, 67%of beneficiaries are female, while 33 percent are male.

CSOs Role in Circular Economy Policy Reforms(26) – As illustrated in the chart below (Figure 6), the involvement of CSOs in supporting the Government of Kosovo in policy reforms related to the Circular Economy is approximately 32%. The primary area of engagement for CSOs in Circular Economy policies is mainly in drafting the Circular Economy Roadmap of Kosovo. This is attributed to the fact that the Circular Economy concept became part of the Government of Kosovo’s policy documents only after 2020, following the Sofia Declaration on the Green Agenda for the Western Balkans.

Fig. 6. Involvement of CSOs in Policy Reforms in Kosovo

According to the CSO Sustainability Index(27) the formal channel for government cooperation with civil society organizations (CSOs) in Kosovo is the Government Strategy for Cooperation with Civil Society 2019-2023. However, despite the first objective of this strategy being to increase CSO participation in policymaking, the involvement of CSOs in supporting the Government of Kosovo in policy reforms related to environmental protection and Climate Change remains low.

Currently, only approximately 36%, of CSOs are actively engaged in cooperation with the government in the field of environmental protection and climate change. The percentage of CSO engagement remains low and there are at least two driving factors for this, namely the government being not very inclusive in consultation and the second one is that the majority of these CSOs are recently established and they run out of funds from time to time.

CSO Involvement in Circular Economy Outreach(28) – As illustrated in the chart below (Figure 7), the current involvement of CSOs in outreach activities is approximately 24%. Involvement of CSOs in Circular Economy outreach is quite low, which is directly triggered by a low number of projects currently targeting the Circular Economy. A much higher number of CSOs, approximately 40% are currently active in outreach campaigns promoting environment protection and addressing climate change. It is important to note that the Circular Economy concept is relatively new for CSOs. As a result, many outreach campaigns may incorporate elements of the Circular Economy without explicitly labelling them as such.

Fig. 7. Implemented Outreach Initiatives by CSOs

According to the CSO Sustainability Index(29), CSO and media reports on environmental violations have prompted the Ministry of Environment, Spatial Planning and Infrastructure (MESPI) to conduct inspections, halt development projects, and discontinue certain licenses.

Gaps of CSOs for Becoming Active Agents in Transition toward Circular Economy – As illustrated in the chart below (Figure 8) approximately 44 percent of CSOs consider that they lack skills to design communication and outreach campaigns on Circular Economy, followed by approximately 38 percent considering that they lack capacities to define problems and propose solutions on the field of Circular Economy. Approximately 32 percent consider they lack foundations in Circular Economy.

Fig. 8. Self- identified Gaps of CSOs

Capacity Building Needs of CSOs for Becoming Active Agents in Transition toward CIRCULAR Economy – As illustrated in the chart below (Figure 9) the most required training by approximately 75 percent of CSOs is that of Proposal Writing for Fundraising related to Circular Economy, followed by a training on Communication and Outreach requested by 63 percent of CSOs. Training on Monitoring and Evaluation and Strategic Planning is requested by 57 percent of CSOs. Training on GESI is requested by 44 percent of CSOs, followed by training on Foundations of Circular Economy requested by 38 percent of CSOs.

Fig. 9. Self- identified training needs of CSOs

SWOT Analyses of CSOs

The table below (Table 1) indicates that CSOs’ strengths are substantially less compared to their weaknesses when viewed from the perspective of their ability to become active players in the transition toward a Circular Economy. CSOs demonstrate strengths in advocacy, outreach and citizen engagement, but lack in experience and skills to implement intervention in the circular economy. However, recent policy reforms taking place at the regional level and adopted by GoK most likely will become donor priority, which will then give the opportunity to CSOs to overcome their weaknesses.

Table 1. SWOT Analyses for CSOs to Become Active Players in the Transition toward a Circular Economy in Kosovo

Kosovo is in the early stages of transitioning toward a circular economy, which is why the threats mentioned in the table below are highly prevalent. Nevertheless, CSOs have experience and skills in mitigating risks, developed through implementing other interventions, which could be utilized also in supporting the country’s transition toward a circular economy.

IV. CAPACITIES OF SMALL AND MEDIUM-SIZED ENTERPRISES WORKING IN THE CIRCULAR ECONOMY IN KOSOVO

SMEs Financial Viability – Interviewed SMEs have reported a linear revenue for the last three years, meaning there was no decrease or increase in their revenues in the last three years. According to business representatives, no increase in revenues is not a good indication considering the inflation rate and depreciation of assets. SMEs declared that they face many challenges due to operating with already outdated equipment. The high cost of upgrading the equipment is their main challenge and poses a major risk to their sustainability. SMEs working in the recycling industry stated that if the government takes no steps to regulate the waste separation at collection points, soon they would face a decrease in their profit. Collection and separation of waste has currently a high cost because there is no system in place for waste separation at the waste collection points. SMEs working in the recycling sector largely depend on the self-initiatives of people or businesses to provide the raw materials. According to SME representatives relying on people’s initiative to collect and bring raw materials for recycling is at high risk, because it causes lots of problems in the long-term planning of SMEs. Another high risk reported by SMEs in the recycling sector is the high staff turnover, which is affecting their operations. According to SME representatives, this is happening because the employees are emigrating to EU countries. According to SME representatives, increasing the staff salaries in order to ensure their loyalty to the company is not a solution, because it will bring the companies to a failure.

The only solution for company sustainability remains staff reduction which could happen in the case GoK establishes a system of waste separation at the collection point.

SMEs Documents and Operating Manuals – According to the findings, SMEs operate under very limited internal regulations. Besides financial manuals, they have no other manuals in place that regulate internal operations. None of the SMEs interviewed has a manual in place for human resource management, even though some of them have more than 30 employees. Recycling companies have reported very low administration efficiency, usually employing a maximum of 2 people to run the finances and administration within their business. In addition, SMEs lack the ability to employ highly qualified staff due to low salaries. Operating under such limited human resources and expertise can lead to many processes being handled inappropriately, increasing the possibility of conflicts with legal requirements.

Capacity Building Needs of SMEs for Becoming Active Agents in Transition toward Circular Economy – The majority of the SMEs operating in the waste recycling and management industry have stated that they would like to receive a capacity building on Human Resource Management. The second most requested training by SMEs is in Financial Management.

Start-up companies requested training in Fundraising aiming for donor support in the development of their enterprise.

All SMEs emphasized the importance of having access to international expertise from the same business field, particularly from EU countries. Being able to learn directly from peer companies operating in EU countries would inform future interventions in their businesses. SMEs expressed a need for a type of capacity building that is closer to coaching and mentoring.

Additionally, SMEs believe that participating in an international fair or study visit to EU countries would be a valuable opportunity to learn about new concepts in circularity.

SWOT Analyses of SMEs

As illustrated in the table below (Table No.2), SMEs have experience in doing business, they established business relations with companies abroad, have exporting experience in EU countries, advanced business management skills, and experience in business-to-business networking.

SMEs on the other side lack experience in cooperating with CSOs and GoK, lack qualified staff and lag in the technology they use, especially when it comes to the digitalization of processes.

However, recent policy reforms at the regional level, adopted by GoK, are likely to become a priority for both GoK and donors. This presents an opportunity for SMEs to overcome their weaknesses by supporting businesses with a more favourable environment of “doing business”. One of the possibilities is to adapt the current Kosovo Credit Guarantee Fund “windows”, so the businesses supporting circularity have a specific “window” adapted to the needs of SMEs interested in entering or expanding their operations in waste reduction, reuse and recycling waste.

Table 2. SWOT analyses for SMEs to become active players in the transition toward Circular Economy in Kosovo

All SMEs participating in this study declared that they have never participated in any discussions on the development of policies, laws or administrative instructions organized by GoK.

All SMEs participating in the study declared that they have never received any financial support from GoK or local government, despite their significant contributions to waste management through recycling or the collection, processing and export of the waste.

All SMEs have raised concerns about GoK’s inefficiency in providing businesses with licenses and permits for export. In most cases, GoK fails to provide a license in time as required by Law, leading to delays.

According to SMEs, the government designs its legal framework without considering the Kosovo context, making it difficult for SMEs to comply with regulations. As a result, many legislative requirements remain unimplemented. In interviews with SMEs in Kosovo, they stated that GoK’s requirements to get a license to operate as a waste collection and waste exporting company are very demanding. Because of this, we see an increased number of companies, which operate informally and therefore pose a risk to our existence and revenues.(30)

SMEs have highlighted the challenges of operating with outdated equipment. The high cost of upgrading the equipment is their main challenge and poses a major risk to their sustainability.

SMEs have emphasized that if the government were to implement waste separation, it would significantly increase their efficiency and profit. Currently, collection and separation come at a high cost due to the absence of a waste separation system at the waste collection points.

To actively participate in the transition toward a circular economy, SMEs must establish and maintain better cooperation with CSOs and the GoK. The triangle of cooperation between SMEs, CSOs and GoK must be established and maintained in order to move toward a circular economy.

However, it is worth noting that SME cooperation with CSOs and GoK is currently very low. None of the SMEs interviewed had experience in cooperating with CSOs or GoK. The disconnection between these stakeholders will lead to slow progress in the circular economy. Advancing toward a circular economy requires policy reforms, people’s behaviour change and innovative business solutions. Stakeholders can feed on their expertise in this journey. CSOs have expertise in advocacy and community outreach, while businesses have experience in finding business innovative solutions to reducing, reusing and recycling waste. Both these experiences can feed in the policies of GoK.

V. RECOMMENDATIONS

Considering the importance of the involvement of Civil society Organizations in the country’s transition toward the Circular Economy, as stipulated in the Sofia Declaration and its Action Plan, Kosovo Integrated Waste Management Strategy and its Action Plan, Circular Economy Roadmap of Kosovo, and findings from PIN assessment, we provide the following recommendations:

Government of Kosovo

  1. Recommendation: The Government of Kosovo should significantly increase the number of CSOs, diversify the stakeholders, actively participate in working groups during the preparation of Concept Documents, amending Laws and drafting Administrative Instructions aimed at regulating and enhancing the Circular Economy in Kosovo. Specifically, it should involve a greater number of CSOs in its upcoming initiatives to draft Law on Climate Change, Law on Strategic Environmental Assessment, Administrative Instruction/s on Extended Producer Responsibility and Administrative Instruction/s on Deposit Refund System. The GoK can ensure this by increasing the visibility of their legislative initiatives and actively inviting CSOs to participate in working groups. Rationale: Our study reveals that out of the 25 CSOs participating in the study, only 8 different CSOs (32%) are actively included in drafting policy documents related to Circular Economy or/and Environment, despite all of them expressing interest in being included. Therefore, there is ample room to increase the number and diversity of stakeholders in GoK’s upcoming legislative initiatives.
  2. Recommendation: The Government of Kosovo should collaborate with CSOs in the outreach initiatives outlined in the Kosovo Integrated Waste Management Strategy and Action Plan (2021-2030). It is recommended that the GoK explore ways to involve CSOs in the direct implementation of some of the outreach activities. Rationale: Our study reveals that out of the 25 CSOs participating in the study, 13 of them have expertise in outreach activities and implementing a multimedia approach. Additionally, 10 CSOs managed to reach more than 500 direct beneficiaries in their activities in 2022.
  3. Recommendation: The Government of Kosovo, MESPI, should diversify its messaging in its outreach activities should diversify beyond anti-littering, reuse, recycling and illegal dumping. The concept of Circular Economy should be prominently promoted in all its outreach efforts. Rationale: While the Kosovo Integrated Waste Management Strategy and Action Plan (2021- 2030) currently focuses on themes such as anti-littering, reuse, recycling and illegal dumping, it is crucial to introduce the concept of Circular Economy to the public in Kosovo. A study conducted by News Agency KosovaLive indicates that 60 percent of citizens have never heard the term Circular Economy.
  4. Recommendation: The Government of Kosovo – Ministry of Economic Development, through its grant program to stimulate innovations, should prioritize Circular Economy- related proposals and consider increasing the grant amount. Particular attention should be given to funding projects with the potential replication on a larger scale. Rationale: As currently outlined in the Kosovo Integrated Waste Management Strategy, the grant scheme offers support for approximately 10 small-scale projects aimed at reducing food waste and exploring alternatives to plastic packaging. The budget for the grant scheme is EUR 33,000 and will be supported by Kosovo Ministry of Economic Development. The amount per project is quite low and it should therefore focus on funding projects that could later be replicated by CSOs through larger funds from different donors.
  5. Recommendation: The Government of Kosovo – Ministry of Finance, Labour and Transfers should establish a mechanism to facilitate the registration of Socially-Owned Enterprises in Kosovo since this will diversify the funding opportunities for CSOs working in the Circular Economy. Rationale: According to the CSO Sustainability Index, the Office for Socially-Owned Enterprises within the Ministry of Finance and Transfers has not yet been established, preventing the implementation of the Kosovo Law on Socially- Owned Enterprises.

Community of Donors

  1. Recommendation: Donors should prioritize funding projects that address the challenges of transitioning toward a Circular Economy in Kosovo. Rationale: Given the progress made by the GoK in drafting the Circular Economy Roadmap, it is an opportune time for donors to allocate funds to CSOs for supporting policy reforms and awareness- raising initiatives related to Circular Economy.
  2. Recommendation: Donors should allocate larger funds specifically for projects that encourage partnerships between CSOs. Funding should require collaboration among multiple CSOs rather than being granted to a single implementing organization. Rationale: Considering that only 32 percent of CSOs have direct experience in Circular Economy projects, it is advisable for CSOs to collaborate and leverage the expertise of different organizations within the same project. Larger funds are needed in this sector, especially as the Government of Kosovo is still in its initial stages of transitioning toward a Circular Economy.

Civil Society Organizations in Kosovo

  1. Recommendation: Civil Society Organizations should align their communication and outreach activities with GoK – MESPI. Civil Society Organizations should incorporate the concept of Circular Economy in all their campaigns related to environmental protection and climate change. Rationale: The role of civil society in raising awareness and driving people’s behaviour change toward the Circular Economy is acknowledged in various policy documents in Kosovo, particularly in the Circular Economy Roadmap for Kosovo. This roadmap itself aims to set a foundation for initiating cooperation between decision-makers, civil society and other relevant stakeholders to expedite the country’s transition toward a circular economy.
  2. Recommendation: CSOs in Kosovo should transition from independently implementing projects to collaborative efforts with other CSOs through partnership. Partnerships will help in having more advocacy impact and would avoid situations where different CSOs are excluded due to the lack of information or ongoing projects. Rationale: According to the CSO Sustainability Index, the Government Strategy for Cooperation with Civil Society 2019-2023 remains the formal channel for government cooperation with the sector, with the first objective of increasing civil society’s participation in policy-making. However, limited progress has been made in this area since the strategy’s adoption. According to the findings of the PIN survey, the involvement of CSOs in supporting the Government of Kosovo in policy reforms related to the Circular Economy is approximately 32 percent. The engagement of CSOs in Circular Economy policies is mainly on drafting Circular Economy Roadmap of Kosovo. CSOs should further utilize the Government Strategy for Cooperation with Civil Society 2019-2023 whereby the GoK commits to increasing cooperation with CSOs.

Small and Medium-Sized Enterprises in Kosovo

  1. Recommendation: SMEs interested in becoming active players in transitioning toward a circular economy need to establish and maintain better cooperation with CSOs and GoK. A cooperation triangle involving SMEs, CSOs and GoK must be created and sustained to advance toward a circular economy. Rationale: The level of cooperation between SMEs and CSOs and GoK is very low, as evidenced by the interviews conducted with SMEs, none of whom had experience in collaborating with CSOs or GoK. The disconnection among these stakeholders will lead to slow progress in the circular economy. Achieving a transition toward a circular economy requires policy reforms, people’s behaviour change and innovative business solutions. Stakeholders can feed in their expertise. CSOs have expertise in advocacy and community outreach, while businesses have experience in finding business innovative solutions for waste reduction, reuse and recycling. Both this experience and expertise can feed in the policies of GoK.

Endnotes

[1] The concept of the circular economy is based on three principles, driven by design: eliminating waste and pollution, circulating products and materials (at their highest value) and regenerating nature. Link: https://ellenmacarthurfoundation.org/topics/circular- economy-introduction/glossary

The concept of circular economy as per the European Commission refers to principles, such as enabling a healthier planet and reducing pollution, reducing pressure on natural resources such as water and land use, reducing emissions to help the EU become the first climate-neutral continent, creating new business opportunities and local quality jobs, and enable more resilient value chains. Link: https://environment.ec.europa.eu/topics/circular- economy_en

[2] Sofia Declaration on the Green Agenda for the Western Balkans, 2020. Link:

[3] Action Plan for the implementation of the Sofia Declaration on the Green agenda for the Western Balkans 2021-2030, 2021. Link: https://www.rcc.int/docs/596/action-plan-for- the-implementation-of-the-sofia-declaration-on-the-green-agenda-for-the-western- balkans-2021-2030

[4] Interview with a representative of Kosovo Agency for Environmental Protection, conducted on June 26, 2023.

[5] Kosovo Integrated Waste Management Strategy (2021-2030) and Action Plan (2021-2023). Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=42930

[6] Kosovo Integrated Waste Management Strategy (2021-2030) and Action Plan (2021-2023). Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=42930

[7] Kosovo Integrated Waste Management Strategy (2021-2030) and Action Plan (2021-2023). Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=42930

[8] Kosovo, Law No. 02/L-30 The Waste Law, 2008. Link: https://gzk.rks-gov.net/ ActDetail.aspx?ActID=2829

[9] Kosovo, Law No. 02/L-30 on Waste, 2008. Link: https://gzk.rks-gov.net/ActDetail.aspx? ActID=2829

[10] OECD defines Extended Producer Responsibility (EPR) as an environmental policy approach in which a producer’s responsibility for a product is extended to the post- consumer stage of a product’s life cycle. Link: https://www.oecd.org/environment/ extended-producer-responsibility.htm

[11] Law No.04/L-060 n Waste – Annex, Principle Polluter pays: 4.1. principle the polluter pays corresponds with the principles set out in Recommendation 75/436/EEC of the Europe Council, the cost calculation and allocation of public authority for environmental issues requires that: 4.1.1. person who conducts activities for waste management should make full compensation for expenses and damages incurred consequences; 4.1.2. cost of creating, handling and disposal of waste should be calculated in the prices of production and service. Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=2829

[12] Kosovo Integrated Waste Management Strategy (2021-2030) and Action Plan (2021-2023). Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=42930

[13] Law No. 08/l-071 on Amending and Supplementing Law No.04/l-060 on Waste, 2022. Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=2829

[14] Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=80807

[15] Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=2829

[16] Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=2829

[17] Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=2829

[18] Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=2829

[19] Link: https://gzk.rks-gov.net/ActDetail.aspx?ActID=2829

[20] Kosovo, Office of the Prime Minister, Legislative program for the year 2023. Link: https://kryeministri.rks-gov.net/wp-content/uploads/2023/02/Programi-Legjislativ-per- Vitin-2023-1.2.2023.pdf.

[21] Circular Economy Roadmap of Kosovo, 2023. Link: https://mmphi.rks-gov.net/ MMPHIFolder/DocumentsFiles/2023_8171e270-643b-4de3-9387-91794084eb8b.pdf

[22] USAID, 2021 Civil Society Organization Sustainability Index for Central and Eastern Europe and Eurasia, January 2023. Link:

[23] USAID, 2021 Civil Society Organization Sustainability Index for Central and Eastern Europe and Eurasia, January 2023. Link: https://www.fhi360.org/sites/default/files/media/ documents/csosi-europe-eurasia-2021-report.pdf

[24] USAID, 2021 Civil Society Organization Sustainability Index for Central and Eastern Europe and Eurasia, January 2023. Link:

[25] USAID, 2021 Civil Society Organization Sustainability Index for Central and Eastern Europe and Eurasia, January 2023. Link:

[26] Findings presented under this sub-section are from a PIN Survey with 25 CSOs working in Circular Economy, or closely related fields.

[27] USAID, 2021 Civil Society Organization Sustainability Index for Central and Eastern Europe and Eurasia, January 2023. Link:

[28] Findings presented under this sub-section are from a PIN Survey with 25 CSOs working in Circular Economy, or closely related fields.

[29] USAID, 2021 Civil Society Organization Sustainability Index for Central and Eastern Europe and Eurasia, January 2023. Link:

[30] Interview with SME representative. September 11, 2023.

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References

Date of report: September 2023

Type of report: Assessment Report

Author: Driton Zeqiri

Email: driton.zeqiri@gmail.com

Project: Circular Economy for Green Transition

Donor: European Union

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Project: Circular Economy for Green Transition CE4GT

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