Navigating Kosovo’s Green Shift: Challenges and Solutions for Inclusive Job Security

The World Bank’s 2025 report, Supporting People and Protecting Workers during the Green Transition in Kosovo, developed in collaboration with the International Bank for Reconstruction and Development, SOCIEUX+, GIZ, and the Bremen-Bremerhaven Employment Agency, presents a vivid portrait of Kosovo’s efforts to decarbonize while safeguarding workers. As a member of the Energy Community Treaty, Kosovo has committed to aligning with EU climate targets, including achieving net-zero emissions by 2050. However, with over 90% of its electricity still derived from lignite, a highly polluting fossil fuel, the country faces significant challenges. The upcoming enforcement of the EU’s Carbon Border Adjustment Mechanism (CBAM) in 2026 is expected to pressure Kosovo’s export industries, especially in energy, iron, and steel, to lower their carbon footprints or risk losing competitiveness.

At the same time, Kosovo’s labor market is grappling with deep structural weaknesses. Only 36.3% of people aged 15–64 are employed, with inactivity reaching a staggering 59%. Female labor force participation stands at just 24%, among the lowest in Europe. Young people are particularly vulnerable, with a NEET (not in education, employment, or training) rate of 33%, the highest in the Western Balkans. These vulnerabilities make the workforce especially sensitive to disruptions brought by the green transition.

A Transition with Uneven Impacts Across Sectors and Genders

While the overall share of jobs directly threatened by the green transition in Kosovo is relatively low, only 4% compared to 7–9% in other Western Balkan countries, a substantial 17% of jobs are expected to undergo significant changes in task content. This shift demands large-scale retraining and reskilling. The hardest-hit sectors are mining and construction, where a majority of workers are low-skilled and have limited ability to adapt to green jobs. Skill gaps for workers in these sectors can be as high as 40–50%, requiring long-term training and support.

The impacts of this transition are far from gender-neutral. Men dominate carbon-intensive sectors and are more prone to job displacement. Yet women, though less likely to be displaced, face larger hurdles transitioning to green jobs. Nearly half of female workers are found to have substantial skill gaps to move into safe or green occupations, compared to 24% of male workers. Societal norms, lower access to STEM education, and concentration in low-paid service jobs further marginalize women in the labor market. Without targeted interventions, the green transition risks widening existing inequalities.

Pathways for Workers: From Retooling to Retirement

The report identifies several potential pathways for different categories of workers. Those already in green or “safe” occupations require minimal support, perhaps only in the form of job matching. Workers in brown jobs with some transferable skills can be supported with short-term reskilling. However, those with large skill gaps, such as coal plant operators, will need more intensive interventions, including long-term training, wage subsidies, and other active labor market programs (ALMPs). For older workers, early retirement options may be more suitable. In Kosovo, where many coal power and mine workers are over 50, retirement packages, supported by severance pay and pensions, can offer a dignified exit.

Unemployed individuals and those not currently participating in the workforce face even more acute barriers. Without adequate income support or access to upskilling, they risk falling deeper into poverty. The report stresses the importance of linking retraining efforts with financial safety nets like unemployment insurance and last-resort social assistance. A diversified mix of measures, vocational education, on-the-job training, entrepreneurship support, and income protection, will be essential for managing the transition equitably.

Kosovo’s Labor Infrastructure: Underprepared and Underfunded

Kosovo’s current labor and social protection systems are not yet equipped to handle the demands of a just green transition. The Employment Agency of the Republic of Kosovo (EARK), responsible for delivering employment services, is critically under-resourced. With only 111 counselors managing over 41,000 registered unemployed in 2023, the quality of support is stretched thin. Most jobseekers rely on informal networks to find work, and fewer than 15% of registered unemployed are enrolled in ALMPs. Vocational training programs, while available through seven public centers, are outdated and not tailored to green sectors. Employer engagement is minimal, and most training lacks practical, job-ready components.

Moreover, Kosovo lacks an unemployment insurance scheme, making it the only country in the Western Balkans without this critical form of protection. Severance pay rules exclude many workers on short-term contracts, and the average payout of 7.2 weeks of wages offers little cushion for long-term transitions. The social assistance system, meanwhile, covers only 7% of the population due to overly restrictive eligibility criteria, leaving many poor or at-risk households unprotected.

Urgent Reforms Needed to Bridge the Transition Gap

The report calls for urgent and strategic reforms across Kosovo’s labor and social protection systems. In the short term, it recommends scaling up employment services by hiring more counselors, expanding access to training through public and private providers, and building partnerships with employers. Pilot programs like the GIZ-supported training voucher scheme offer promising models for more flexible, market-responsive training delivery. Kosovo should also prioritize the introduction of unemployment insurance to protect formal sector workers during transitions.

In the medium term, the establishment of a labor market observatory could provide crucial data to anticipate green job trends and guide policymaking. Reforming the social assistance scheme to make it more inclusive and responsive is equally critical. Kosovo’s future hinges on its ability to manage this transformation with care, balancing climate imperatives with social justice. With smart investments, stronger institutions, and coordinated action, the green transition can become not only an environmental success but a catalyst for inclusive economic growth.