Chapter 6: Slovenia

6.1 Summary of Findings

Slovenia's environment fares relatively well compared with many other CEE countries. Acid rain, transboundary air pollution from neighboring countries, and surface and groundwater contamination are the main environmental problems experienced. There are also growing problems related to poor waste management, and soil pollution caused by the extensive use of pesticides and fertilizers.

The Ministry of Environment and Physical Planning, responsible for regulatory measures and control, is the main body in charge of environmental protection. Within the Ministry there are several agencies with different tasks related to the environment. The administration of environmental regulations is carried out both at the national level and at the local level including 147 municipalities.

The Inspectorate for Environment and Physical Planning supervises the implementation of environmental regulations, oversees water resources management, and regulates physical planning and construction activities. The levels of compliance are still below EU standards in many key areas, such as the industrial and energy sectors, or in the management of municipal and hazardous waste. The country's efforts to enforce compliance have focused mainly on water quality.

In 1996, total spending on environmental protection in Slovenia amounted to USD 150.4 million, or approximately 0.8 percent of GDP. In 1994, air protection projects accounted for the largest share of national expenditures (71 percent of the total). Waste management related projects accounted for 18 percent of the total spending, followed by water and wastewater activities (9 percent). Currently, the share of the latter two categories of projects is increasing. Reliable information on the spending on environmental technologies in Slovenia is not available.

Environmental expenditures in Slovenia are financed mainly through the municipal budgets, the state budget, the Environmental Development Fund, and spending from the private sector. State co-funding of environmental investments is common in Slovenia. An increase in environmental expenditures can be expected over the next few years as a result of efforts to harmonize local environmental legislation and policy with EU standards.

The PHARE Programme is one of the biggest contributors of foreign funding for environment-related projects in Slovenia, with additional financial resources provided by the EBRD and the World Bank. Several Western governments provide bilateral assistance.

The Slovenian Ministry of Environment currently gives priority to the protection of ground and surface waters by the appropriate treatment of wastewater, and protection of water resources. Waste management priorities include remediation of existing disposal sites, minimization and recycling of wastes, and the proper management of hazardous waste. Other priorities include coordinating environmental protection with existing practices in the European Union; introducing sectoral legislation; improving the enforcement of legislation; and establishing an environmental information system.

Based on interviews conducted with Slovenian environmental experts, the most important problems needing to be addressed included: waste disposal sites requiring remediation; a need for the construction of new waste disposal sites; pollution of surface and ground water by municipal and industrial wastewater; pollution of potable water sources from agriculture; air pollution from industrial boilers and household fireplaces, from industry due to the lack of flue gas cleaning facilities, and from traffic; and the accumulation of hazardous waste that needs treatment and removal.

The areas likely to offer the most business opportunities in Slovenia are the protection of ground and surface waters by appropriate treatment of wastewater, protection of water resources, and waste management activities. Business opportunities related to environment-related projects in the energy sector will be significant in the mid term. In the coming years, about USD 400 million are expected to be invested in environmental protection programs in Slovenia as a result of the privatization process.

There are few effective formal channels in Slovenia providing information on environmental business opportunities. The source most frequently used is the Official Gazette of the Republic of Slovenia which announces tenders for projects co-funded by the government. Other significant sources include personal contacts, participation in fairs and exhibitions, and information from the media. Among the most important fairs in Slovenia dedicated to the environment and environmental technology are EKO sejem in Celje and Tehnika za okolje in Ljubljana.

As for information on environmental technologies, the most reliable and frequently used sources include previously established contacts with suppliers, and information published in specialized journals or obtained at fairs in other countries. Representatives of technology suppliers are also a significant source of information.

Overall, the demand for environmental technologies in Slovenia is moderate, with demand for technologies relating to air and water monitoring, industrial wastewater treatment, and management of radioactive and hazardous waste likely to grow. One should bear in mind, however, that the overall state of the environment in Slovenia is relatively good, and that some important environmental problems have already been solved in recent years.

Demand for air-related technologies is moderate. Growth in demand is expected for technologies relating to air sampling and laboratory analysis equipment for gaseous emissions and ambient air, for emission abatement and cleaner production technologies, and for air pollution control and flue gas purification equipment.

Demand for water and wastewater technologies is also moderate, with growth tendencies expected for technologies relating to the treatment of industrial wastewater. Technologies in increasing demand include equipment for the monitoring, sampling and laboratory analysis of industrial wastewater, and for instrumentation, process control and software for industrial wastewater treatment. Some growth in demand is also expected for those technologies relating to pollution prevention and waste minimization in industrial wastewater treatment and drinking water supply.

Waste management is the only area where high demand for environmental technologies was identified, with technologies related to radioactive and hazardous waste in highest demand. High demand was identified for waste disposal, and waste prevention/minimization technologies for radioactive waste; technologies relating to recycling and resource recovery from industrial waste; and for equipment used in landfill disposal of hazardous waste. Increasing demand is expected for technologies in the field of recycling and resource recovery (including those for composting and biomass conversion) for municipal waste management; equipment for landfill disposal of industrial and municipal waste; and technologies relating to pollution prevention/waste minimization of hazardous and industrial waste. Other technologies where demand is expected to rise include spillage control and decontamination of radioactive waste; and equipment for collection, transportation and storage of municipal waste.

Demand for energy-related technologies was found to be moderate. Growing demand was noted for alternative (non-CFC) refrigerants, while other areas where demand is expected to increase include technologies for heat recovery and energy savings (e.g. insulation) in the energy sector; new and efficient energy and heat generation systems; and retrofitting and rehabilitation of existing energy systems in both the power generation and other industrial sectors. Alternative or renewable energy systems (e.g. geothermal, biomass, and solar) are other possible growth areas.

Demand for technologies related to noise, vibration, and occupational health and safety was low to moderate, with some growth in demand expected for OHS protection equipment.

In most technology categories, the municipal sector, including power generation, is the major end-user of environmental technologies. In the air, water and wastewater, and waste sectors, municipal users were followed by the respective industries such as chemical, mining, wood, and food processing. The transportation and mining sectors are the major end-users in the noise and vibration category. Industry is an important user of environmental technologies related to energy. The order of end-users was affected by the decline in industrial production after 1991, leading to a decrease in environmental pollution, and the current focus on pollution from the municipal sector, which had been neglected in the past. The privatization of public utilities has also led to increased spending in the municipal sector.

Most Slovenian buyers (about two-thirds) rely on the use of best-technology or best-practice criteria when making purchasing decisions. However, a small proportion of buyers declared preference for domestic products. There was a slight preference for buying foreign-manufactured environmental technologies from domestic representatives compared with buying directly from the producer abroad.

High product quality is considered the most important strength of foreign environmental technologies. Among other highly ranked qualities are their reliability, durability, and good value for money. Available credits and funding from the foreign provider, found to be of importance in other CEE countries, are deemed less important in Slovenia. When making purchasing decisions, some experts considered a foreign technology known to have been used and verified in other countries to be an advantage over domestic products. In spite of these positive comments, only a limited proportion of respondents regarded foreign environmental technologies as user-friendly and easy to customize and adapt to specific local conditions. Importantly, only one in three respondents considered the quality of after-sales service as a strength of imported environmental technologies.

The lack of reliable product information, and the relatively high cost of foreign technology are the most significant barriers to buying environmental technologies from abroad. Other barriers include the difficulties in ensuring authorized after-sales technical service and maintenance, too little information about suppliers, and the non-suitability of products to the local conditions and technical culture.

In general, perceptions of foreign environmental technologies were between average and good, somewhat higher than perceptions of domestic environmental technologies, which were evaluated as average. German, American, Japanese and Austrian technologies were ranked highly in the air sector. In the water and wastewater sector, technologies from Holland and Germany were ranked high, followed by products from Austria and France. German and American technologies were best rated in the waste sector, while German and Scandinavian technologies were highly rated in the energy sector. Finally, American, German, and Scandinavian products were evaluated highly in the noise, vibration, and OHS sector.

No single foreign company dominates on the Slovene environmental market. The highest number of foreign firms were active in the air, water and wastewater sectors, followed by the waste sector. German firms seem to hold the lead in supplying Slovenia's environmental technologies in terms of both quantity and quality. However, Austrian and American suppliers are close behind, and considerably ahead of those firms from other countries (i.e., Switzerland, Italy and France). As no company is considered dominant in any product line, there are opportunities for any firm able to provide a quality product at competitive Western prices, moreso because a limited environmental technology industry exists in Slovenia.