The Government of the Republic of Serbia has adopted on 28 May 2026 a new Decree on incentives for operators engaged in the reuse and recycling of waste (Decree), expected to make a significant shift from administratively determined subsidies to a market-based allocation model.
Key aspects of the change:
- Incentives will no longer be granted in advance at fixed amounts, but through an auction system, where operators will compete by offering the price at which they are willing to process waste.
- Incentives will remain a form of environmental state aid, but with clearer market-based criteria and stricter oversight of the use of funds.
This approach brings the domestic framework closer to the principles applied in EU law regarding state aid and competition protection. Rather than having the state administratively determine the users of the incentive, the market, through auctions, should identify those capable of delivering the greatest environmental benefit at the lowest public cost. The positive opinion issued by the State Aid Control Commission on the draft Decree is particularly important, as it confirms that the proposed mechanism has been assessed as compliant with state aid rules.
Key challenges:
The recycling sector had already begun to experience the consequences of the abolition of the previous subsidy scheme at the beginning of 2026: reduced inflows of waste to operators, rising costs, and lower capacity utilization rates. Consequently, the success of the new Decree will depend on:
- the speed of implementing the auction process;
- legal certainty and predictability of the applicable conditions;
- continuity of funding;
- effective supervision over the use of allocated funds.
Given that the Decree provides for the allocation of incentive funds during the period from 2026 to 2028, this “pilot period” of implementation will demonstrate not only the advantages of the new model but also any potential shortcomings in addressing the challenges ahead.
For additional information or consultations, the Tasić & Partners team is at your disposal.