The current approach to the green energy transition in the countries of the Western Balkans (WB6) primarily focuses on promoting large, centralized state projects facilitated by the EU. These initiatives aim to transition various industrial sectors from fossil fuels to cleaner, sustainable energy sources. While being crucial, this centralized approach represents only one aspect of the transition. Equally important is a democratic and decentralized, bottom-up strategy, which leverages the capabilities of local governments and communities to achieve energy transition goals. However, the potential of this “bottom-up” approach remains largely untapped, especially concerning improving energy efficiency and promoting environmentally friendly practices in average households throughout the WB, particularly during the heating season (October to April). Many towns in the region lack centralized heating systems, leading homeowners in poorly insulated houses to rely heavily on wood and coal for heating, which adversely impacts the environment. Namely, statistics show that air pollution reaches its peak during winter months, while deforestation is an ever-rising problem. 

Given that all WB6 countries are in the process of EU accession, the success of community-led strategies for sustainable heating critically depends on the EU’s regulatory framework, while the central (state) and local legislations and policies have certain room for maneuver, allowing them to influence the existing and future policies. More specifically, when it comes to the wider European context, all national and local energy-related policies in the WB6 are strongly influenced by the Energy Community Treaty (ECT), its objectives and implementation tools, but also by the EU’s Carbon Border Adjustment Mechanism (CBAM), yet another pan-European regulatory framework that promotes decarbonization. Therefore, this paper will first focus on the regulatory analysis of the compliance of all WB6 countries with the requirements imposed by the ECT/CBAM (Chapter II); in its second part, the paper will shed the light on the current state and major challenges of local municipality strategies for sustainable heating in Serbia, Bosnia-Herzegovina, and Montenegro (Chapter III), before focusing on public policy recommendations in the field of sustainable heating for both central and local public authorities in Serbia, Montenegro, and Bosnia-Herzegovina – which would be, mutatis mutandis, applicable in all other WB6 countries (Chapter IV).