Background The ecological situation in Kaliningrad is deteriorating as a result of uncontrolled economic development. Key problems include the irrational use of natural resources, poor air and water quality, and the pollution of soil through poor disposal of household and industrial waste. The situation demonstrates the need for a holistic approach to environmental policy-making. The city’s capacities for implementing the necessary policies, however, are low. The new EC Eco-management and audit scheme (EMAS) Regulation (no. 761/2001) provides a way to address the low environmental capacity in the municipal water and heat supply companies. Implementation of the regulation can provide companies with a methodology for systematically managing their environmental activities and services. It can also help them achieve their environmental obligations and performance goals through the development of the necessary internal administrative and communication structures. Objectives This project aimed to introduce EMAS as a tool for the development of environmental policies and action programmes in municipal enterprises. This would be achieved through the implementation of EMAS in some units of the large water and heat supply companies in Kaliningrad. The main activities of the project included: • Creation of a strategic partnership among municipal enterprises in order to promote; • EMAS implementation and transfer of expertise and knowledge; • Implementation of the EC EMAS Regulation in Kaliningrad water and heat supply companies; • Establishment of environmental service units in the participating enterprises; • Organisation of training activities for the management and staff of the participating companies; • Organisation of a site visit to EU municipal enterprises which have implemented EMAS;• • Preparation of an EMAS guide; and • Organisation of two workshops targeting local authority officers and municipal enterprise managers. Results This project successfully implemented EMAS in several units of the two large water and heat supply companies in Kaliningrad. (Vodocanal and Kaliningradteploset were registered according to EMAS regulation and also received ISO 14001 certificates) As part of this initiative, it created a strategic partnership among municipal enterprises in order to promote EMAS implementation and transfer of expertise and knowledge. The project also supported the establishment of environmental service units in the participating companies and organised training activities for the management and staff. As planned, a site visit to EU municipal enterprises, which have implemented EMAS, took place alongside two workshops targeting local authority officers and municipal enterprise managers. An EMAS guide was produced in Russian and English. Another important result of the project was the enhancement of the capacity of local authorities to provide guidance to the public sector for the development of environmental action programmes in the context of EMAS Regulation. Environmental awareness was increased through the local authority initiatives in public enterprises. Finally, the institutional constraints for the implementation of EMAS were identified and key environmental problems were addressed. Examples of good practice were developed for municipal enterprises in third countries.