Tunisia

Tunisia has recently put in place a framework to steer its economy onto a low-carbon pathway. In early 2023, the government adopted the Stratégie Nationale de Transition Écologique (National Strategy for Ecological Transition, SNTE) to guide green economic development through 2035 and towards 2050. This strategy lays out cross-sectoral measures (53 in total, across five pillars) integrating environmental and economic policies. Notably, it commits Tunisia to carbon neutrality by 2050. The SNTE is publicly accessible and aligns with Tunisia’s international climate commitments. Tunisia updated its Nationally Determined Contribution (NDC) in 2021 with more ambitious targets, and in 2022 submitted a Long-Term Low Emission Development Strategy that reflects the national goal of achieving net-zero by 2050. Overall, these initiatives provide a strong strategic foundation for the transition towards a green economy in Tunisia, but despite this framework, implementation is not yet backed by fully legally binding instruments. The SNTE and related climate strategies serve as policy roadmaps rather than enforceable law at present. In practice, there remains a disconnect between these strategic objectives and their concrete legal and operational implementation, highlighting the need for stronger accountability mechanisms. Intermediate milestones are outlined through the NDC and development plans, but ensuring accountability will require sectoral action plans, regulatory measures and sustained financing. Since 2023, some incentives supporting the green transition have been introduced, including reduced VAT rates, lower vehicle registration and road taxes for cleaner technologies, the Energy Transition Fund and a dedicated fund supporting the acquisition of electric vehicles. However, no specific budget lines have been directly allocated in recent finance laws to support the achievement of these cross-sector objectives.

Tunisia has a recognised national corporate governance framework through its Commercial Companies Code and widely used national corporate governance guides, and it has taken steps to mainstream ESG disclosure for market-facing companies, including explicit links to the SDGs in stock-market guidance. However, the absence of enforceable provisions for inclusivity criteria, such as employee participation in governance or gender equality in boards, results in Tunisia falling short of a truly inclusive corporate governance framework. The existing measures lack binding targets or strong incentives, and much depends on companies’ voluntary compliance.

Following the suspension of parliament in July 2021 and the subsequent concentration of legislative and executive authority in the presidency, most legislation has been adopted by presidential decree without mandatory public consultation or parliamentary debate. While participatory mechanisms were already fragile prior to 2021, they have effectively become entirely non-binding following this governance shift. While Tunisia had earlier developed formal mechanisms for participation, including a governmental obligation to publish draft laws for public comment and an official online consultation platform, these instruments have been largely inactive since before 2021 and have not been reactivated. The sole most notable and recent participatory initiative was the 2022 online “national consultation” linked to the constitutional reform process, which was not grounded in a binding legal framework, achieved low participation relative to the population, and did not demonstrably influence the final constitutional text.

In this context, Tunisia’s green and environmental strategies have been developed without mandatory public consultation or formal impact assessment requirements, reflecting a broader removal of these procedural obligations from the policymaking framework. Moreover, there is no evidence of mandatory impact assessments or consultation processes addressing the effects of proposed legislation on socially marginalised groups. The absence of binding requirements for consultation and impact assessment directly undermines transparency and inclusive governance standards. On the contrary, several legal and institutional changes have weakened inclusive governance, including the removal of gender parity requirements from electoral legislation and the elimination of formal roles for civil society organisations in local governance structures.

Furthermore, participatory elements referenced in policy documents, such as workshops under the SNTE, appear largely performative, functioning as forums to present pre-determined outcomes rather than enabling genuine stakeholder deliberation. Without a binding obligation for a consultative process prior to adoption, these processes do not meet the procedural standards required for meaningful participatory policymaking.

Tunisia shows early development of beyond-GDP measurement, mainly through indicator platforms and some environmental–related measurement initiatives, but there is no mandate to integrate a wellbeing framework into the national planning.

Tunisia has taken some enabling steps for market development and capacity-building, including the capital market regulator’s guidance for issuing green, social and sustainability bonds and related transparency expectations, and the Central Bank of Tunisia’s participation in international supervisory work on greening the financial system. These measures, alongside donor- and development-bank led credit lines that channel finance through local banks for green investments, are supportive, but they do not amount to a system-wide package of incentives, nor do they constitute a regular climate stress-testing regime for all banks and financial institutions.

However, these measures remain structurally dependent on external credit lines from international lenders and development banks, with limited mobilisation of domestic financial resources. As a result, green finance in Tunisia remains fragile and project-based, often on large infrastructure investments. While administrative and regulatory steps have been introduced, these have largely been oriented towards accessing international funding. Increased reliance on external financing for green investments may contribute to rising external debt without a corresponding strengthening of domestic economic capacity.

The country’s 2014 constitution enshrined environmental protection and climate action, and Tunisia ratified the Paris Agreement in 2017, committing to reduce greenhouse gas intensity by 41% by 2030, with more recent updates increasing the ambition to around 45%. This commitment was embedded in national strategies, such as the National Development Plan (2016–2020), a National Climate Plan (2022–2030) along with a National Ecological Transition Strategy (2023). Overall, Tunisia’s fiscal policy framework reflects climate and green growth ambitions, yet the full alignment of taxation and public spending with sustainability is still work in progress.

However, achieving these climate targets implies substantial investment needs—estimated at around $19.3 billion—of which only a portion can be covered through domestic resources, with a significant share dependent on international financing. This creates a structural reliance on external funding to deliver on green fiscal objectives.

Greening monetary policy and the financial sector in Tunisia is in an early implementation stage, marked by capacity-building and regulatory groundwork led by the Central Bank of Tunisia (BCT) and financial regulators. The BCT and other financial authorities, which include the Financial Market Council and Ministry of Finance, have formulated a National Green Finance Strategy (2018) to reorient financial flows toward sustainable development priorities. Tunisia’s financial sector regulators are collaborating, with international support, to develop a more sustainable finance framework. The country is currently at the preparation stage of developing a national sustainable banking framework. With advisory assistance from the International Finance Corporation, guidelines for Green, Social, and Sustainability (GSS) bonds have been created to open the market for climate-friendly investment products.

While these regulatory and institutional measures represent important administrative progress and are positively recognised at the international level, they do not yet translate into strong domestic economic drivers for the green transition. The reliance on external credit lines and donor financing raises concerns about increasing external debt levels without a corresponding expansion of domestic revenue-generating capacity.

Existing trade deals do not systematically include environmental provisions; for example, Tunisia’s Association Agreement with the EU dates from 1995 and lacks any green chapter, and its 2004 free trade agreement with the EFTA states focused on tariff liberalisation and investment rules without incorporating sustainability standards. Negotiations for a Deep and Comprehensive Free Trade Area (DCFTA) with the EU did envisage a chapter on Trade and Sustainable Development addressing labour and environmental regulations, but these talks were put on hold in 2019 and no such provisions are yet in force. At the multilateral level, Tunisia joined the African Continental Free Trade Area (AfCFTA) and in 2023 endorsed its Investment Protocol, which links trade and climate action by affirming states’ rights to regulate for sustainable development and even invokes the UNFCCC principle of common but differentiated responsibilities (CBDR) in climate-related investment measures.

On the domestic front, the government has lowered or exempted import duties and taxes on hybrid and electric vehicles and cut VAT on solar energy equipment (such as panels) to encourage clean technology uptake. Tunisia has not yet developed a green taxonomy or carbon pricing regime.

The Tunisian government has explicitly signaled in its NDC 3.0 submitted in 2025 a strategic vision for integrating carbon markets and pricing mechanisms to support climate targets. Tunisia is participating in international capacity-building programs, like the World Bank's Partnership for Market Implementation (PMI). Current levies are largely fragmented and aimed at revenue generation or general energy conservation rather than being pricing instruments.

Tunisia’s national development agenda is presented in the Vision Tunisie 2035, and the National Development Plan 2023–2025, and the 2023–25 National Development Plan. It aims for an inclusive, sustainable economy with a focus on environmental resilience. In 2024 Tunisia adopted a National Ecological Transition Strategy (SNTE) to guide sustainable development across all sectors; it highlights climate adaptation, low-carbon policies and the need to form dedicated government entities to oversee implementation. Sector policies have been put in place. For example, Tunisia has set a target to generate 35% of its electricity from renewables (solar and wind) by 2035. In 2020, the government approved a National Urban Mobility Policy that includes a broad package of measures to decarbonize transport and support cities in developing sustainable mobility plans. Moreover, the current planning landscape relies on the Updated NDC submitted as a draft in 2025, which introduces more ambitious carbon intensity reduction targets of 46.2% by 2030. This framework integrates issues such as water scarcity and climate-resilient agriculture, particularly through the National Adaptation Plan (NAP). Despite these frameworks, cross-sectoral coordination remains a challenge. Tunisia does not have an inter‐ministerial body to integrate these sectoral plans and monitor development. The SNTE calls for new governance bodies, such as a High Authority for Ecological Transition, to ensure coherent implementation across ministries.

Tunisia has moved to a more concrete circular economy policy framework by 2025, mainly focused on waste reduction and materials recovery. Key actions include the National Strategy for Waste Reduction and Valorisation within the 2026–2030 development plan, new waste treatment and recovery facilities, and initiatives such as composting and biogas. These efforts are also aligned with broader strategic orientations such as Vision 2035 and include pilot projects in areas like waste-to-energy.

Supporting measures include expanded funding through the Pollution Control Fund (FODEP), international cooperation (e.g., the Tunisian-German ProtecT programme), sectoral initiatives like a textile waste roadmap, and private-sector financing through the EBRD/EU Green Economy Financing Facility (GEFF) launched in 2025.

However, Tunisia’s approach remains largely waste-centered, with no fully integrated circular economy roadmap, no standardized or publicly tracked CMUR targets, and limited implementation of policies such as right-to-repair and comprehensive circular public procurement. More fundamentally, the framework lacks enforceability, as key strategies are not yet supported by implementing decrees or binding instruments. As a result, current developments reflect strategic intent and fragmented initiatives rather than a systemic and institutionalised transition to a circular economy.

Tunisia has adopted an ambitious green transport strategy centered on sustainable mobility and vehicle electrification. The 2040 National Transport Master Plan outlines an integrated system, while the 2024–2025 Finance Laws introduced strong incentives for electric vehicles, including reduced VAT, lower registration and road taxes, and a 10,000 TND purchase subsidy funded by the Energy Transition Fund. Public institutions are also supported through a dedicated fund to acquire EVs.

The strategy also addresses public transport modernization, including the transfer of 200 buses from Geneva starting in 2026. Tunisia has set clear targets of 50,000 EVs and 5,000 charging stations by 2030, and 125,000 EVs by 2035, aligned with the National Urban Mobility Plan and NDC 3.0, which requires the transport sector to contribute to a 46.2% reduction in carbon intensity by 2030.

Tunisia has set clear renewable energy targets, aiming for 35% of electricity from renewables by 2030 and around 50% by 2035, under its new Energy Strategy. This represents a major increase from the current level, which reached only about 5% by the end of 2024. To meet these goals, the government is launching large-scale solar and wind tenders, including projects totaling 500 MW within a broader 1.7 GW program.

The strategy is supported by public and international financing, including funding from the Energy Transition Fund, a $430 million World Bank program to upgrade the grid and enable around 2.8 GW of new renewable capacity by 2028, and €35.8 million in EU grants for solar plants and network improvements. However, since 2021, the impasse with the IMF (driven by the government’s rejection of reform conditions perceived as infringing on national sovereignty) has reduced investor confidence.

As a result, financing for the energy transition remains largely project-based, with international financial institutions such as the World Bank (e.g. through the TEREG programme) and the EU continuing to support specific infrastructure projects, but without broader budgetary support. With public debt already exceeding 80% of GDP, there is a risk that scaling renewable energy investments could further increase debt levels without generating sufficient economic growth to service these obligations.

Tunisia's Energy Strategy to 2035 identifies the energy transition as a key employment driver, with a target of around 70,000 jobs in energy-related sectors and a focus on opportunities for youth and women.

The 2024 Green Hydrogen Strategy also embeds a just transition approach, connecting hydrogen development to sustainable jobs, local community involvement (especially in southern regions), gender equality and workforce retraining and upskilling. International support, such as EBRD/EU green finance programs, also promotes capacity building.

However, Tunisia lacks a comprehensive just transition framework. In addition, there are concerns regarding the realism and quality of projected job creation. The African Development Bank suggests that employment potential may be overestimated, with many jobs linked to short-term, project-based activities tied to donor funding cycles.

This challenge is compounded by limited engagement: local communities have not been meaningfully involved in the design and implementation of major initiatives (e.g. green hydrogen projects in regions such as Gabès). This reinforces a top-down approach, where employment targets are not actually driven by locally grounded economic needs.

Tunisia has begun integrating just transition principles into its climate and development strategies, such as the NDC, the Ecological Transition Strategy, and the 2050 Low-Carbon and Climate-Resilient Development Strategy. Some sectoral policies, like the 2024 Green Hydrogen Strategy, include measures for job creation, skills development, gender equality and community participation. However, Tunisia lacks a comprehensive national just transition framework, and current efforts remain fragmented.

Tunisia has recognized social enterprises through the 2020 Social and Solidarity Economy (SSE) law, the first of its kind in the Arab region, and its Green Economy Strategy (2016–2036) promotes skills, innovation and financing for green SMEs. However, there is no distinct legal corporate form for social enterprises, only general recognition under the SSE framework. In addition, the SSE law remains largely non-operational due to the absence of application decrees and dedicated institutional bodies.

Support for green MSMEs mainly relies on international financing and donor-backed programs, such as the EBRD Green Economy Financing Facility (GEFF) and a €270.9 million Team Europe package, as well as training initiatives from organizations like UNDP. This high dependence on external funding contributes to a fragile, project-based ecosystem.

Since the 2021 governance shift, the sector has also been affected by a more top-down approach, with limited participatory input from civil society. At the same time, SSE entities continue to face structural barriers in accessing finance, as traditional banks often perceive them as high-risk or quasi-charitable actors rather than viable economic enterprises.

Tunisia has strengthened its social protection system, notably through the AMEN Social programme, which provides cash assistance and health coverage for vulnerable households, and through the 2020 Social and Solidarity Economy law, which supports cooperative and community-based economic models. However, these policies are not explicitly linked to the green transition.

Tunisia has adopted a National Biodiversity Strategy and Action Plan (NBSAP) 2018–2030, aligned with the Kunming-Montreal Global Biodiversity Framework. The strategy includes five priorities, 15 strategic objectives and 48 actions, such as expanding protected forests and marine areas and integrating biodiversity into economic planning. The NBSAP also includes a monitoring framework with indicators and was developed through an inclusive national process with UNDP support. Implementation is ongoing, though protection levels remain relatively modest, with about 7.9% of land and 1% of marine areas protected as of 2021.

Tunisia increasingly recognizes the importance of integrating natural capital into decision-making, particularly through the National Ecological Transition Strategy (SNTE) and the National Biodiversity Strategy. These strategies emphasize better data, monitoring and governance but do not establish a national natural capital accounting system integrated into economic planning or budgeting. Some initial steps are underway, including work on ecosystem natural capital accounting (ENCA) with support from international partners, involving ministries, the national statistics office and the Ministry of Finance. These efforts include developing accounts for selected ecosystems and creating geo-enabled data platforms.

However, current ENCA frameworks function largely as passive data repositories. Despite the technical robustness of the data and platforms developed, there is no legal mandate requiring the integration of natural capital accounts into the State Budget or National Development Plans. Moreover, institutional coordination has not yet translated into mechanisms that treat environmental degradation as a formal fiscal liability within public finance systems. As with other areas of Tunisia’s green transition, the strong reliance on international partners raises the risk that ENCA remains primarily a technical reporting exercise aligned with donor requirements, rather than a domestically driven tool for shaping national economic policy and planning.

Tunisia has several policies addressing parts of the food system, such as the National Action Plan on Sustainable Consumption and Production (including a 2016–2025 agri-food plan) and the National Ecological Transition Strategy (SNTE), which promote more sustainable production, resource efficiency and reduced food waste. Initiatives supported by partners like FAO and UNEP also address food loss and waste. But the country does not have a single national food systems strategy, and current policies lack clear targets for sustainable agriculture and subsidy reform.

Tunisia has environmental fiscal instruments, such as the Pollution Control Fund (FODEP) and environmental taxes, which aim to internalize environmental costs and support environmental projects. However, the revenues generated are small, limiting their impact. The National Biodiversity Strategy and Action Plan proposes mechanisms such as polluter-pays policies, payments for ecosystem services and subsidy reform, but most of these remain planned or not fully implemented.

A key constraint lies in the limited enforceability of the polluter-pays principle within the current legal framework. Existing regulations often lack the precision needed to clearly define liability or to impose fines that adequately reflect the scale of environmental damage, particularly for large industrial actors. In addition, the State’s dual role as both regulator and, in some cases, owner or major stakeholder in polluting industries creates structural conflicts of interest that weaken enforcement. This is evident in cases such as the long-standing environmental degradation in Gabès linked to the Groupe Chimique Tunisien (GCT), where accountability mechanisms have been difficult to apply effectively.

Tunisia’s initial COVID-19 recovery measures focused mainly on general economic support with little explicit green focus. More recently, the government has started integrating sustainability into recovery efforts through measures such as tax incentives for green, blue and circular economy projects, and sectoral initiatives like a forest restoration project creating green jobs and a $430 million World Bank energy program to expand renewable energy. These initiatives remain sectoral and relatively small in scale.