The paper examines the necessity and key preconditions for the green transition in Western Balkan countries, focusing on regulatory and institutional prerequisites, the need to redefine economic growth models, development opportunities, and the potential for implementing a circular economy. The main findings indicate that Western Balkan countries should adopt a national strategic approach to the green transition, with a focus on reforming the energy sector and restructuring the energy-intensive economy. The region has untapped potential in renewable energy sources and can benefit from improving energy efficiency. The circular economy can boost the green transition, as the region has significantly lower resource productivity and waste generation per GDP unit compared to the EU. However, cross-sectoral governance needs to be more coordinated. The green transition presents a development opportunity for sustainable economic growth, energy security, and environmental protection, but it faces challenges such as underdeveloped regulatory and institutional capacities, high energy intensity, and the need for long-term planning and project development. The implementation of the Green Agenda requires overcoming these obstacles to ensure a successful transition.The paper examines the necessity and key preconditions for the green transition in Western Balkan countries, focusing on regulatory and institutional prerequisites, the need to redefine economic growth models, development opportunities, and the potential for implementing a circular economy. The main findings indicate that Western Balkan countries should adopt a national strategic approach to the green transition, with a focus on reforming the energy sector and restructuring the energy-intensive economy. The region has untapped potential in renewable energy sources and can benefit from improving energy efficiency. The circular economy can boost the green transition, as the region has significantly lower resource productivity and waste generation per GDP unit compared to the EU. However, cross-sectoral governance needs to be more coordinated. The green transition presents a development opportunity for sustainable economic growth, energy security, and environmental protection, but it faces challenges such as underdeveloped regulatory and institutional capacities, high energy intensity, and the need for long-term planning and project development. The implementation of the Green Agenda requires overcoming these obstacles to ensure a successful transition.