COMMISSION STAFF WORKING DOCUMENT Energy Union Factsheet Croatia Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK Third Report on the State of the Energy Union
Date: 2017-11-23
Institutions: European Commission, Secretariat-General
Subjects: Croatia, climate change policy, competitiveness, economic and social cohesion, energy cooperation, energy policy, innovation, investment, regional cooperation, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.11.2017 SWD(2017) 396 final  COMMISSION STAFF WORKING DOCUMENT Energy Union Factsheet Croatia  Accompanying the document  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK  Third Report on the State of the Energy Union  {COM(2017) 688 final} - {SWD(2017) 384 final} - {SWD(2017) 385 final} - {SWD(2017) 386 final} - {SWD(2017) 387 final} - {SWD(2017) 388 final} - {SWD(2017) 389 final} - {SWD(2017) 390 final} - {SWD(2017) 391 final} - {SWD(2017) 392 final} - {SWD(2017) 393 final} - {SWD(2017) 394 final} - {SWD(2017) 395 final} - {SWD(2017) 397 final} - {SWD(2017) 398 final} - {SWD(2017) 399 final} - {SWD(2017) 401 final} - {SWD(2017) 402 final} - {SWD(2017) 404 final} - {SWD(2017) 405 final} - {SWD(2017) 406 final} - {SWD(2017) 407 final} - {SWD(2017) 408 final} - {SWD(2017) 409 final} - {SWD(2017) 411 final} - {SWD(2017) 412 final} - {SWD(2017) 413 final} - {SWD(2017) 414 final}  
 
 
                              Energy Union – Croatia 

  Croatia 
                             Energy Union factsheet1 

1.  Macro-economic implications of energy activities 

Energy and transport are key sectors for the overall functioning of the economy as they provide an 
important input and service to the other sectors of the economy. Together, the activity in these two 
sectors2 accounted for 7.7 % of the total value added of Croatia in 2015. Similarly, their share in total 
employment3 was 7.4 % 2015, of which 6.5 % in the transport sector and 0.9 % in the energy sector.  

The  decarbonisation  of  the  energy  and  transport  sectors  will  require  significant  investments  and 
economic  activity  beyond  the  remit  of  these  sectors  themselves.  The  energy  transition  implies  a 
structural  shift  in  economic  activity.  Energy-related  investment  and  jobs  will  in  part  migrate  from 
traditional  fossil  fuel  based  activities  towards  construction,  equipment  manufacturing  and  other 
services related to the deployment of low carbon and clean energy technologies. At the moment, the 
efforts  related  to  the  energy  transition  in  other  sectors  cannot  be  reliably  quantified  and  are 
therefore not included. 

(Source: Eurostat) 

In the case of renewable energy sector, both the direct as well as the indirect effects on employment 
are  being  estimated.  According  to  EurObserv'ER,  in  2015,  the  share  of  renewable  energy  related 
employment  in  total  employment  of  the  economy  in  Croatia  was  at  about  0.41  %,  below  the  EU 

1  The  indicators  used  in  this  country  factsheet  largely  build  on  indicators  developed  for  the  Commission  Staff  Working 
Document  "Monitoring  progress  towards  the  Energy  Union  objectives  –  key  indicators"  (SWD(2017)  32  final) 
https://ec.europa.eu/commission/sites/beta-political/files/swd-energy-union-key-indicators_en.pdf 

2  Gross  value  added  and  employment  in  NACE  sectors  D-Electricity,  gas,  steam  and  air  conditioning  supply  and  H-

Transportation and storage 

3 National accounts, Eurostat 

1 

 
 
 
 
 
 
                                                            
 
                              Energy Union – Croatia 

average of 0.54 %. The turnover of the renewable energy industry in the same year was estimated at 
around EUR 670 million, the largest part being attributed to the biomass (EUR 440 million) followed 
by wind (EUR 125 million) and biofuels (EUR 30million) industries. 

(Source: EC based on Eurobserv'Er and Eurostat) 

The overall investment is usually taken as an indication of the level of efforts and challenges in the 
energy sector. However, data is not available for Croatia for this indicator. 

Croatia is a net importer of fossil fuels and electricity and the value of its imports in terms of share of 
GDP is higher than the EU average. The trade deficit in energy products slightly fell from about 3.7 % 
of GDP in 2006 to 3.5 % in 2015, mainly driven by a lower trade deficit for the oil import. In 2015, 
Croatia became net importer also of gas. The trade deficit for electricity grew significantly from 2006 
and 2015 (by around 80 %). 

(Source: Eurostat) 

2 

 
 
 
 
 
 
                              Energy Union – Croatia 

2.  Energy security, solidarity and trust 

2.1. Energy Mix 

The  energy  mix  of  primary  products  in  Croatia  is  slightly  different  from  the  EU28  average,  with  a 
lower share of solid fuels (7.6 % vs. 16.2 %), no share of nuclear and a higher share of oil (41.3 % vs. 
34.4 %), natural gas (26.2 % vs. 22.0 %) and notably renewable energy (24.7 % vs. 13 %). 

 (Source: Eurostat) 

Hydropower plants as a renewable energy source are the largest producer of renewable electricity in 
Croatia. The production is highly dependent on hydrology with an average production of 7.3 TWh in 
the period 2010-2015.4 Most of the hydropower plants (2188.5 MW of installed capacity) are owned 
by the HEP group which invests in their operation and maintenance. There are also investments by 
the HEP group in the revitalisation of old equipment by which it managed to increase capacities of 
existing hydropower plants. The HEP group has also plans to build new hydropower plants at several 
locations  (HPP  Kosinj/Senj  ,  HPP  Dubrovnik  2,  HPP  on  Sava  River  -  Podsused,  Prečko,  Zagreb  and 
Drenje). Together with small hydropower plants that are planned by NREAP, the total investments in 
new facilities could reach 1 billion EUR in the following decade. Beside the planned storage and run-
of  river  hydropower  plants,  there  are  several  plans  to  build  reversible  or  pumped  hydro  storage 
plants  (PHS/RHPP)  by  the  HEP  group,  private  and  public  investors.  Currently,  only  4  PHS/RHPP  are 
operated  by  the  HEP  group  to  better  manage  their  assets  and  they  are  mostly  used  for  electricity 
production,  arbitrage  on  the  market  and  water  management.  However,  several  new  PHS  are 
envisaged as multifunctional objects which may become of crucial importance in the adaptation to 
the climate change and management of droughts, irrigation, water management and firefighting in 
several regions.  

There  are  many  restrictions  on  potential  construction  sites  for  new  hydropower  plants  due  to  the 
fact that large areas of Croatia (30-40%) are under Natura 2000 and other environmental protection 
zones  which  on  the  one  hand  may  result  in  higher  investment  costs  to  adopt  to  requirements  of 
environmental protection, while they might increase innovation potential if applied solutions comply 
with the highest requirements of environmental protection. 

4 http://www.eihp.hr/wp-content/uploads/2016/12/Energija2015.pdf  

3 

 
 
 
 
    
                                                            
                              Energy Union – Croatia 

2.2. Import dependency and security 

48.3 % of Croatia's energy consumption comes from imports, slightly less than the EU average (54 %). 
There  has  also  been  a  small  decrease  in  overall  import  dependency  over  the  last  ten  years.  The 
import dependency is much lower for natural gas (27.1 %), although it increased slightly compared 
with the previous ten years, but higher for crude oil/LNG (79.6 %) and hard coal (more than 100 %). 
Lack of data does not allow for identifying the main import sources for natural gas; for crude oil/LNG 
the  country  relies  mostly  on  Azerbaijan  (39.3  %)  and  Russia  (29.3  %)  and  for  hard  coal  on  Russia 
(63.7%). 

 (source: Eurostat) 

The security of gas supply regulation requires that, if the single largest gas infrastructure fails in one 
Member State, the capacity of the remaining infrastructure is able to satisfy total gas demand during 
a day of exceptionally high gas demand. Croatia complies with this rule. 

(Source: gas coordination group) 

4 

 
 
 
 
                              Energy Union – Croatia 

3.  Internal market 

In  general,  the  functioning  of  the  internal  market  is  still  being  challenged  mainly  by:  incomplete 
certification  of  the  gas  TSO;  issues  with  the  functioning  of  the  electricity  TSO  (having  to  obtain 
consent from the Market Operator before adopting rules on balancing); and the independence and 
jurisdiction of the NRA which is still insufficient. 

3.1. Interconnections and wholesale market functioning 

3.1.1.  Electricity 

The interconnection level5 for electricity was 52 % in 2017, which is above the 2020 target at EU level 
(though  below  the  2014  level).  There  are  several  Projects  of  Common  Interest  (PCIs)  under  the 
guidelines  for  trans-European  energy  infrastructure  planned  in  Croatia,  including  two  electricity 
clusters,  a  high-voltage  transmission line between  Croatia  and  Bosnia  and  Herzegovina  and a  high-
voltage  transmission  line  between  Croatia,  Hungary  and  Slovenia.  Considerable  investment  is 
expected. 

Competition in Croatia's electricity wholesale market is still very limited. Market concentration is well 
above EU average, though there has been a noticeable decrease since 2005. No data for wholesale 
electricity  prices  or  trading  are  available.  The  wholesale  electricity  price  in  Croatia  is  still  not 
deregulated and market liquidity is still low. The Commission has received notice of the certification 
of the TSO by HERA (the National Energy Regulatory Authority) under the Independent Transmission 
Operator (ITO) model and has already expressed its considerations on how such certification can be 
considered adequate for the unbundling provisions. 

 (source: EC based on ENTSO-E scenario 
outlook and adequacy forecast 2014) 

(sources: EC services based on Eurostat for the left graph  and based 
on Platts and European power exchanges for the right graph) 

5 The interconnectivity level is calculated as a ratio between import interconnection and net generation capacities 
of the country (i.e. the 2017 value is the ratio between simultaneous import interconnection capacity [GW] 
and net generating capacity [GW] in the country at 11 January 2017, 19:00 pm as resulted from ENTSO-E 
Winter Outlook 2016/2017) 

5 

 
 
 
 
                                                            
                              Energy Union – Croatia 

3.2. Gas 

In gas, there are three main projects in Croatia. The phased development of Krk LNG terminal; the 
Zlobin  —  Bosiljevo  —  Sisak  —  Kozarac  —  Slobodnica  pipeline  as  the  evacuation  route  for  Krk  LNG 
towards Hungary; and the items of the Croatia — Slovenia — Austria route at Rogatec. All of these 
projects are PCIs. The Krk LNG terminal is the most advanced: it is designed as a phased development 
with  a  Floating  Storage  and  Regasification  Unit  (so-called  FSRU)  in  the  first  phase,  which  has  been 
awarded a EUR 104.4 million CEF grant for works at the end of 2016. The initial maximum send-out 
capacity  of  the  terminal  is  planned  at  2  billion  cubic  metre  per  year  (bcm/y).  A  final  Investment 
Decision (FID) is expected by the beginning 2018 which would allow starting operations by the end of 
2019  at  the  earliest.  The  Croatian  government's  proactive  support  and  cooperation  with  the 
Commission (in particular with regard to the needed tariff and regulatory reform) and neighbouring 
countries  (such  as  Hungary  concerning  the  reverse  flow  on  the  interconnection  between  the  two 
countries) is vital for the successful implementation of the project. The other two projects are in the 
preparatory stage. 

Market concentration for wholesale gas supply and wholesale gas prices remain above EU average, in 
spite of a substantial price decrease between 2013 and 2016. There is currently no gas hub; hence 
wholesale  gas  trading  is  based  on  bilateral  contracts  and  price  regulation  on  the  gas  wholesale 
market prevents market entry and competition. Wholesale gas market prices in Croatia are still not 
deregulated, and the unbundling process (certification of the gas TSO) is still not completed. Barriers 
to the export and import of gas, especially in relation to the interconnection with Hungary, still exist 
and restrictions are imposed on the functioning of the storage facilities and gas suppliers. 

(source: ACER for the left graph and EC services based on on Platts, gas hubs, Eurostat for the right graph) 

3.3. Retail electricity and gas markets 

Competition in Croatia’s energy market is still limited. Prices remain regulated on both electricity and 
gas  retail  markets  creating  a  barrier  to  market  entries.  While  competition  in  the  retail  market  for 
households is slowly emerging, further market opening is needed to improve the investment climate 
and create incentives for new entrants. 

6 

 
 
 
 
                              Energy Union – Croatia 

3.3.1.  Electricity 

In 2016, household electricity prices in Croatia were below the EU average but remained at about the 
same  level  as  three  years  earlier,  due  to  price  regulation.  In  fact,  over  the  period  2013-2016 
electricity  supply  costs  decreased  but  the  share  of  taxes  and  levies  in  household  electricity  prices 
slightly  increased.  Competition  in  the  household  electricity  market  is  emerging,  though  annual 
switching rates are still far below EU average. 

(source: ACER) 

(source: Eurostat)  

(source: Eurostat) 

3.3.2.  Gas 

There  is  currently  no  competition  in  the  retail  gas  market  in  Croatia.  Prices  remain  regulated, 
significantly below the EU average, and decreased by 21 % in 2016 compared to 2013. 

(source: ACER) 

(source: Eurostat)  

(source: Eurostat) 

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                              Energy Union – Croatia 

3.3.3.  Market performance indicators 

According  to  the  periodical  survey  of  DG  JUST,  Croatian  consumers  are  less  satisfied  than  the  EU 
average about the services received on energy retail markets. 

(source: DG JUST survey) 

3.4. Energy affordability  

There  are  no  data  available  regarding  the  share  of  energy  in  total  household  expenditures  for  the 
lowest  quintile  of  population  in  Croatia.  The  percentage  of  citizens  below  or  at  the  risk  of  poverty 
threshold  who  consider  that  they  are  unable  to  keep  their  home  adequately  warm  is  only  slightly 
above  the  EU  average  (23.7  %  vs.  22.7  %)  but  has  significantly  increased  since  2005,  due  to  the 
economic crisis. 

 (source: ad-hoc data collection of DG ENER based on HBS with the support of Eurostat and national statistics) 

4.  Energy efficiency and moderation of demand 

Since 2005, Croatia decreased its primary energy consumption by 12.2 % to 8.0 Mtoe in 2015. Over 
the  same  period,  final  energy  consumption  also  decreased  by  9.0  %  to  6.59  Mtoe  in  2015.  Thus, 
Croatia’s primary and final energy consumption remains below the country’s 2020 energy efficiency 

8 

 
 
 
 
 
 
 
                              Energy Union – Croatia 

targets of 11.5 Mtoe and 7.0 Mtoe, respectively. This target was set at a level which allows both final 
and  primary  energy  consumption  to  grow  substantially  in  the  coming  years.  However,  additional 
efforts regarding energy efficiency are needed to keep primary energy consumption at this level or to 
minimise the effects of the GDP upward trend which is observed since 2014. In the coming years up 
to  2020,  Croatia  is  also  expected  to  step  up  the  national  energy  efficiency  actions  and  programs 
which  are  necessary  to  meet  the  cumulative  saving  requirements  stemming  from  Article  7  of  the 
Energy  Efficiency  Directive,  since  the  Energy  Efficiency  Obligation  Scheme  planned  is  still  not 
operational. 

Although  primary  energy  intensity  decreased  over  the  2000-2015  period,  it  remains  substantially 
above EU average (both overall and for industry, the services sector and the residential sector) which 
indicates the presence of unexploited efficiency potential; it decreased at a slower pace as compared 
to the EU average (with almost no decrease in the services sector). 

(source: Eurostat) 

In 2015, the residential sector was the largest energy-consuming sector representing 36.7 % of total 
energy  consumption,  well  above  the  EU  average  (25.4%).  The  share  of  energy  consumption  of  the 
transport sector  (32.0  %)  was  slightly  below  the  EU average  (33.1  %) and that  of  industry  (16.5  %) 
significantly below EU average (25.3 %). 

(source: Eurostat) 

As the building sector in Croatia accounts for 43 % of final energy consumption or 6.1 million tons of 
CO2eq (from 14.1 million tons in total), special attention is paid to a more intense implementation of 

9 

 
 
 
 
 
                              Energy Union – Croatia 

national  programmes  of  building  renovation.  The  Long‐term  Strategy  for  Mobilising  Investment  in 
Renovating the National Building Stock in Croatia was published in June 2014 under the authority of 
the  Ministry  of  Construction  and  Physical  Planning  (MCPP).  The  strategy's  main  objective  is  to 
identify, on the basis of the established optimal economic and energy model for building renovation, 
effective measures for long term mobilisation of cost‐effective deep renovation of the building stock  
by 2050, including all buildings from the residential and non-residential sectors. An updated version 
of the Strategy is now in the phase of adoption by the Croatian Government and strongly follows the 
state of the practice and possibilities for further development through plans and programs. 

The annual savings (equivalent to renovating 3 % of the buildings owned and occupied by the central 
government) have been calculated to reach 1.36 GWh (4.89 TJ) per year. 

Investments that have a positive impact on the state budget are encouraged, and through the ESCO 
model,  energy  efficiency  improvements  in  public  sector  buildings  are  implemented  without  the 
additional spending of owner/user budgeting. 

For  achieving  the  objectives  of  energy  renovation  according  to  Nearly-Zero  Energy  Building  (NZEB) 
standards,  funds  for  investment  and  operational  costs  are  estimated  at  nearly  EUR  7  billion  up  to 
2050. For buildings occupied and owned by public authorities, the main design of the building should 
be  prepared  according  to  the  requirements  for  NZEB  if  the  application  for  building  permit  is 
submitted after 31 December 2017; for other buildings it will be after 31 December 2019. 

Around  1  %  of  buildings  shall  undergo  integral  renovation  to  the  NZEB  standard  each  year;  up  to 
2020,  it  is  envisaged  that  5  %  of  buildings  shall  be  renovated  to  the  NZEB  standard  or  to  a  high 
energy-performance  level  and  finally  in  2050,  all  buildings  will  be  NZEB  or  high  energy  efficiency, 
reducing greenhouse gasses in buildings by 80 %. 

(source: Eurostat)  

(source: Eurostat)  

  (source: Odyssee database) 

Between 2005 and 2015 in Croatia, the final energy consumption in transport recorded an average 
annual  increase  of  1  %,  higher  than  the  0.1  %  average  annual  increase  of  the  GDP.  Final  energy 
consumption  in  transport  declined  sharply  after  2008,  only  to  see  a  modest  recovery  in  2015.  The 
decrease in final energy consumption was driven mostly by the decrease in freight transport activity 
affected by the economic context, whilst passengers transport activity followed a similar trend of the 
overall energy consumption in transport over the period 2005-2015. 

10 

 
 
 
 
 
                              Energy Union – Croatia 

(source: Eurostat)  

        (source: Eurostat and DG MOVE pocketbook) 

The  share  of  collective  passengers  land  transport  in  total  passengers  transport  decreased  slightly 
more in Croatia than the EU average between 2005 and 2015 indicating a higher increase in the use 
of private transport means.  

(source: Eurostat)  

Croatia is facing challenges in meeting the Europe 2020 target of 10 % renewable energy in transport 
(in 2015 the share was 3.5 %). However, the 2017 national reform programme foresees new measure 
which should increase the share.  

Croatia is currently finalising a new comprehensive national transport development strategy for the 
period 2017-2030. Once completed, it will enable Croatia to make full use of available EU funding for 
transport-related projects (EUR 1.3 billion for the period 2014-2020). In particular, investments in rail 
infrastructure are needed, where Croatia is lagging behind other EU Member States. Completion of 
the TEN-T core rail network stands at 5 %, compared to the EU average of 60 %. 

Croatia  also  needs  to  open  the  market  in  certain  transport  sectors,  especially  the  rail  and  the 
maritime  cabotage  markets.  A  regards  maritime  cabotage,  tendering  procedures  which  should 
ensure the opening of the market during 2017 are ongoing. 

11 

 
 
 
 
 
 
 
 
 
 
 
 
                              Energy Union – Croatia 

5.  Decarbonisation of economy 

5.1. GHG emissions 

Total  emissions  in  Croatia  have  been  reduced  by  27.5  %  from  1990  to  2016.  Based  on  the  latest 
national  projections  submitted  to  the  Commission,  and  taking  into  account  existing  measures,  it  is 
expected  that  Croatia  will  meet  its  greenhouse  gas  emission  target  by  a  wide  margin  (-12.5  % 
between 2005 and 2020 as compared to +11% target). 

(source: EC and EEA)   

Croatia has a higher GHG intensity in the economy than the EU average while emissions per capita 
are among the lowest in the EU.  

(source: EC and EEA)   

Preliminary accounts under the Kyoto Protocol for Croatia show overall removals of -1.3 Mt CO2-eq. 
as  an  annual  average  in  the  period  2013-2015.  For  comparison,  the  annual  average  of  the  EU-28 
accounted  for  removals  of  -119.0  Mt  CO2-eq.  It  should  be  noted  that  in  this  preliminary  simulated 
accounting  exercise,  removals  from  Forest  Management  were  capped  to  -1.1  Mt.  CO2-eq  per  year, 

12 

 
 
 
 
 
 
 
 
                              Energy Union – Croatia 

due to slightly exceeding the limit of the difference between the reported sink and the accounting 
forest management reference level.  

Removals by Afforestation are notably higher than emissions by Deforestation; however, removals by 
Forest  Management  contribute  the  highest  share.  Overall,  there  is  a  slight  increase  in  removals 
mainly  due  to  increasing  removals  by  Afforestation.  Emissions  by  Deforestation  show  a  varying 
pattern over the course of the three-year period.  

Note: Forest Management credits are capped and presented as yearly averages when the total Forest 
Management credits of the considered period exceed the simulated cap over the same period. 

(source: EC and EEA)  

CO2 emissions in transport and alternative fuelled vehicles 
CO2 emissions from road transport have increased by 61.6 % from 1990 to 2015. The average CO2 
emissions of new cars in Croatia were in 2016 below the EU average; due to lack of data no trend for 
2005-2016 can be indicated. 

 (source: European Environment Agency) 

13 

 
 
 
 
 
 
 
                              Energy Union – Croatia 

The number of electric charging points in Croatia has more than tripled, from 77 units in 2015 to 232 
units in 2016. Sales of alternative fuel cars were at 0.34 % in 2015, up from 0.05 % in 2014 and 
practically zero in 2013. 

 (European Environment Agency)  

       (European Alternative Fuels Observatory) 

National Policy Frameworks under Directive 2014/94/EU on alternative fuels infrastructure have to 
establish targets, objective and measures for the development of the market of alternative fuels in 
the  transport  sector  and  the  deployment  of  the  relevant  infrastructure.  Croatia  has  submitted  its 
National Policy Framework as requested under article 3 of the Directive 2014/94/EU.  

A detailed assessment of the Croatian National Policy Framework in terms of its compliance with the 
requirements  of  Directive  2014/94/EU  on  alternative  fuels  infrastructure,  its  contribution  to 
achievement  of  long-term  energy and  climate objectives  of  the  Union  and  coherence of  its  targets 
and objectives in terms of cross-border continuity has been published as part of the Communication 
on  Alternative  Fuels  Action  Plans  (COM(2017)652)  and   the  related  staff  working  document 
SWD(2017)365.  

5.2. Adaptation to climate change 

Croatia's  National  Adaptation  Strategy  (NAS)  is  being  developed  and  is  due  to  be  completed  and 
prepared  for  adoption  by  the  end  of  2017.  A  parallel  National  Adaptation  Plan  (NAP)  will  also  be 
developed,  covering  a  five-year  period.  Recognized  vulnerable  sectors  are  the  following:  hydrology 
and  water  resources,  agriculture,  forestry,  biological  diversity  and  natural  inland  ecosystems, 
biological diversity and marine ecosystems, urban and coastal areas, tourism, and human health. No 
reports on adaptation at  the central or sectorial level have been published since the NAS and NAP 
are yet to be adopted. 

5.3. Taxes on energy and transport 

The  overall  tax  burden  on  energy  and  transport  in  Croatia  amounted  to  3.2  %  of  GDP  in 2014,  i.e. 
nearly 0.8 %. higher than the EU average. It is particularly the tax burden on transport vehicles and 

14 

 
 
 
 
 
 
 
 
                              Energy Union – Croatia 

fuel that was higher. While taxation of heat and electricity almost doubled between 2007 and 2014, 
it  remained  below  the  EU  average.  The  total  tax  burden  on  vehicles  and  transport  fuels  remained 
stable between 2007 and  2014, keeping the same overall structure and around the same gap with 
respect to the EU average. There is a CO2 component in the vehicle taxation in Croatia. 

(Source: Eurostat 

5.4. Renewable energy  

Croatia is currently well above its 2015/2016 indicative overall renewable interim target as well as its 
2020  target  of  20  %  as  set  under  the  Renewable  Energy  Directive  (2009/28/EC).  In  2015,  the 
renewable energy share in the overall gross final energy consumption was 29%. 

However, Croatia is well below the target of renewable energy share in transport, with only 3.5 % in 
2015 (a slight decrease since the 4.3 % achieved in 2013). On the other hand, the share of renewable 
energy was 38.6 % in heating and cooling and 45.4 % in electricity generation in 2015. 

 (source: Eurostat-SHARES) 

15 

 
 
 
 
 
                              Energy Union – Croatia 

(source: Eurostat-SHARES) 

It is estimated that Croatia avoided in 2014 about 7.2 % of fossil fuel in gross inland consumption and 
about 6.8 % of GHG emissions at national level6. 

 (source: EEA) 

In  Croatia,  electricity  from  renewable  sources  is  mainly  promoted  through  a  premium  tariff  and  a 
guaranteed  feed-in  tariff  for  small  installations  allocated  through  tenders.  Bank  and  funds  provide 
special loans and additional financial incentives. The main instrument to promote renewable energy 
use in transport is a biofuel quota obligation. For the promotion of renewable energy in heating and 
cooling, the main document is the Programme for usage of the potential for heating and cooling for 
period between 2016 and 2030 (Program korištenja potencijala za učinkovitost u grijanju i hlađenju 
za  razdoblje  2016.  –  2030.)7.  Also,  the  potential  in  this  sector  can  be  seen  through  the  STRATEGO 
project that aims at helping national and local authorities develop enhanced Heating & Cooling plans. 
About 40 % of the need for heating in Croatia is satisfied with central heating system and more of 
45% of heating needs could be produced from renewable energy till 20508. 

5.5. Contribution of the Energy Union to better air quality 

6 Avoided GHG emissions mentioned here have a theoretical character as these contributions do not necessarily represent 

'net GHG savings per se' nor are they based on life-cycle assessment or full carbon accounting. 

7 https://ec.europa.eu/energy/sites/ener/files/documents/croatia_report_eed_art_141_hr.pdf. 
8 http://stratego-project.eu/hr/  

16 

 
 
 
 
 
 
 
 
                                                            
                              Energy Union – Croatia 

Air  quality  in  Croatia  is  giving  cause  for  concern.  For  2013,  the  European  Environment  Agency 
estimated  that  about  4,820  premature  deaths  were  attributable  to  fine  particulate  matter  (PM2.5) 
concentrations and 160 to nitrogen dioxide (NO2) concentrations9. 

For  both  pollutants,  Croatia  reported  exceedances  of  the  binding  EU  air  quality  standards10.  For  
2015,  Croatia  reported  exceedances  of  the  limit  value  for  PM10  in  3  out  of  the  9  air  quality  zones, 
while exceedances of the limit values for PM2.5 and NO2 were reported in 1 of the 9 zones11. 

(Source: EEA) 

The health-related external costs from air pollution in Croatia have been estimated to be more than 
EUR 2 billion/year (income adjusted, 2010), which includes the intrinsic value of living a healthy life 
without premature death as well as the direct costs to the economy such as healthcare costs and lost 
working days due to sickness caused by air pollution12. 

The  Energy  Union  can  substantially  contribute  to  addressing  these  air  quality  problems  through 
measures reducing emissions of both GHG and air pollutants such as PM and nitrogen oxides (NOx) 
from major contributing sectors such as (road) transport, energy production, industry and residential 
heating (e.g. stoves and boilers)13. 

9 European Environment Agency, 2016, Air Quality in Europe – 2016 Report, table 10.2. The report also includes details as 
regards the underpinning methodology for calculating premature deaths.    
10 Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air quality and cleaner 
air for Europe, OJ L 152, 11.6.2008, p.1-44 
11 Compliance data as reported by the Member States as part of their official annual air quality report for the calender year 
2015 
Repository), 
http://cdr.eionet.europa.eu/hr/eu/aqd  
12 See also the EU Environmental Implementation Review Country Report for Croatia, SWD(2017)45 final of 3.2.2017 
13  National  emission  data  as  reported  by  the  Member  States  to  the  EEA  (available  on  the  EEA's  Eionet/Central  Data 
Repository), http://cdr.eionet.europa.eu/hr/eu/nec_revised 

Eionet/Central  Data 

Environment 

European 

(available 

Agency's 

(EEA) 

the 

on 

17 

 
 
 
 
 
                                                            
                              Energy Union – Croatia 

(Source: EEA. This table reflects only sources of primary PM2,5 emissions.) 

6.  Research, innovation and competitiveness  

6.1. 

Research and innovation policy 

To achieve energy development goals in line with the Croatian government’s Strategic Development 
Framework, the strategic plans of the National Science Foundation and the National Energy Efficiency 
Programme,  the following sectors are identified as  priorities in energy R&I: (a) potential for biogas 
from organic waste; (b) sustainability of production and use of biofuels, and distribution of biofuels; 
(c)  new  technology  for  renewables  (solar,  wind,  waves,  biomass,  etc.);  and  (d)  new  and  more 
efficient machinery, materials and construction technologies. 

Croatia is not very active in the ongoing work of the Strategic Energy Technology  (SET) Plan; it only 
participates in one temporary working group for the implementation of the integrated SET Plan, the 
one dedicated to concentrated solar power.  

Regarding  the  Horizon  2020  programme,  Croatia  has  so  far  received  0.3  %  of  the  EU  contribution 
devoted to the 'secure, clean and efficient energy' part of the programme. As of September 2017, 48 
participations  from  Croatian  organisations  have  been  awarded  EUR  4.6  million  in  Horizon  2020 
energy  projects.  This  includes  two  grants  totalling  EUR  0.4  million  to  Croatian  beneficiaries 
participating in project BioVill (bioenergy villages). 

6.2. 

Investments and patents in the Energy Union R&I priorities  

The European Commission does not have any data regarding the public (national) investments in the 
Energy Union R&I priorities.  

Private investment in the Energy Union R&I priorities in 2013  was estimated at EUR 5 million (0.03% 
of the private R&I investment in Energy Union R&I priorities in the EU). The focus was on renewables, 
which received 56 % of these investments. The remaining 44 % was attracted by the Smart System 
priority. 

18 

 
 
 
 
 
 
                              Energy Union – Croatia 

In  2013,  the  latest  year  for  which  complete  patent14  statistics  are  available,  two  companies  and 
research organisations based in Croatia filed two patents in low-carbon energy technologies (0.03 % 
of the EU total). The focus was on Renewables (60%) and Smart System (40%)15. 

In  2013,  both  private  R&I  investments  and  patents  in  Energy  Union  R&I  priorities  were  lower  than 
the EU average when normalised by GDP and by population respectively. In the period 2007-2013, 
both private R&I investments and the number of patents in Energy Union R&I priorities increased on 
average respectively by 37 % and 35 % per year, increasing at a higher rate than the indicators at EU 
level (6 % and 15 % respectively). 

 (Data  sources:  Patent  data  based  on  the  European  Patent  Office  PATSTAT  database16.  Private  investment  as 
estimated by JRC SETIS. Detailed methodology available from the JRC17.) 

6.3. 

Competitiveness 

In 2014, the real unit energy costs (RUEC)18 in Croatia (13.3 %) were slightly below those at the EU 
average  (15.3  %),  higher  than  those  in  the  US  but  significantly  below  those  in  Japan,  China  and 
Russia. The electricity prices paid by industrial customers are below the EU and OECD averages. Gas 
prices for industrial customers, however, are above those averages. 

14  

In the context of this document, the term 'patent' refers to patent families, rather than applications, as a measure of 
innovative activity. Patent families include all documents relevant to a distinct invention (e.g. applications to multiple 
authorities),  thus  preventing  multiple  counting.  A  fraction  of  the  family  is  allocated  to  each  applicant  and  relevant 
technology. 

15 according to the methodology to allocate patents under the Energy Union R&I priorities, a single patent family could be 

split into different priorities 

16 https://www.epo.org/searching-for-patents/business/patstat.html#tab1  
17 https://setis.ec.europa.eu/related-jrc-activities/jrc-setis-reports/monitoring-ri-low-carbon-energy-technologies  
18   This indicator measures the amount of money spent on energy sources needed to obtain one unit of value added. 

19 

 
 
 
 
                                                            
                              Energy Union – Croatia 

(Source: ECFIN) 

                   (Source: Eurostat and IEA) 

The competitiveness of Croatia is increasing for the solar PV sector and decreasing in wind. Between 
2005 and 2015, the revealed comparative advantage indicator for solar increased to a level above 1, 
meaning  that  the  country  gained  competitiveness  with  respect  to  its  international  competitors.  In 
the  wind  sector,  the  trend  was  the  opposite  and  Croatia  lost  in  competitiveness  as  shown  by  the 
revealed  comparative  advantage  indicator,  now  below  1.  The  relative  trade  balance19  confirms  the 
competitiveness of the country as a net exporter of solar components, while in 2015 it became a net 
importer  of  wind  energy  technology  components,  due  to  a  strong  trade  deficit  in  wind  turbines 
generating sets and gearboxes. 

 (Source: UN Comtrade) 

7.  Regional and local cooperation 

Croatia  is  a  member  of  the  Regional  Groups  North-South  electricity  and  Gas  Interconnections  in 
Central Eastern and South Eastern Europe. 

Croatia  is  a  member  of  the  High  Level  Group  on  Central  East  South  Europe  Connectivity  (CESEC) 
together  with Austria,  Bulgaria,  Greece,  Hungary,  Italy,  Romania,  the Slovak  Republic and Slovenia. 
The objective of the High Level Group is to establish a regional priority infrastructure roadmap and 

19 The RTB indicator for product "i" is defined as follows: RTBi =

Xi−Mi
Xi+Mi

 where Xi is the value of product's "i" exports and Mi 

imports. 

20 

 
 
 
 
 
 
 
 
 
                                                            
                              Energy Union – Croatia 

advance  its  implementation  in  order  to  develop  missing  infrastructure  and  improve  security  of  gas 
supplies. One important CESEC related project for Croatia and for the region, is the LNG evacuation 
pipeline  towards-Hungary,  which  is  to  enable  evacuation  of  gas  from  the  planned  Croatian  LNG 
terminal to regional markets. 

The EU macro-regional strategies for the Danube Region and the Adriatic and Ionian Region in which 
Croatia  takes  part,  can be  used  as  a  basis  for  regional  cooperation  on  energy. European  Territorial 
Cooperation  –  'Interreg'  –  under  EU  cohesion  policy  also  provides  further  opportunities  for  cross-
border, transnational and interregional cooperation, including in the Energy Union areas.  

Cities and urban areas have a key role in the energy and climate challenge. The Urban Agenda for the 
EU,  established  by  the  Pact  of  Amsterdam  in  May  2016,  better  involves  cities  in  the  design  and 
implementation of policies, including those related to the Energy Union. It is implemented through 
Partnerships, in which the Commission, Member States, cities and stakeholders work together on a 
number  of  important  areas,  including  on  Energy  Transition,  Urban  Mobility,  Air  Quality,  Climate 
Adaptation and Housing. Croatia is participating in the partnership on Air Quality, as member. 

By 2016, in the context of the Covenant of Mayors, the sustainable energy action plans delivered by 
61  Croatian  municipalities  had  been  assessed.  Overall,  these  municipalities  cover  more  than  1.9 
million  inhabitants  representing  around  43  %  of  the  total  population.  All  together,  these 
municipalities  committed  to  reduce  by  2020  the  GHG  emissions  by  22.3  %  (as  compared  to  1990 
baseline).  

(Source: JRC 2016) 

In  Croatia,  by  September  2016,  8  cities  (covering  0.13  million  inhabitants)  have  committed  to 
conduct  vulnerability  and  risk  assessment  and  develop  and  implement  adaptation  plans  in  the 
framework of the Covenant of Mayors for Climate and Energy. 

8.  Cohesion policy and EU clean energy investments  

EU  Cohesion  Policy  makes  a  key  contribution  to  delivering  the  Energy  Union  objectives  on  the 
ground, including important investment possibilities to implement energy policy objectives in Croatia 
which are complemented by national public and private co-financing, aiming at optimal leverage. It 
also  ensures  integrated  territorial  solutions  to  energy  and  climate  challenges,  supports  capacity 
building and provides technical assistance. 

is 

investing  some  EUR  557  million 

Over  2014-2020,  cohesion  policy 
in  energy  efficiency 
improvements  in  public  and  residential  buildings  and  in  enterprises,  as  well  as  in  high-efficiency 
cogeneration  and  district  heating,  renewable  energy  and  smart  electricity  distribution  grids  in 
Croatia. Cohesion policy is also investing significantly in R&I and in SME competitiveness, based on 
the national strategy for smart specialisation. For Croatia, the strategy includes a focus on energy and 
sustainable  environment  as  well  as  transport  and  mobility  among  the  selected  priorities.  At  this 

21 

 
 
 
                              Energy Union – Croatia 

stage,  at  least  EUR 40  million  are  foreseen  for  investments  in  R&I  and  adoption  of  low-carbon 
technologies,  but  this  might  increase  further  in  line  with  the  evolving  content  of  the  smart 
specialisation  strategy.  A  further  estimated  EUR  760  million  is  invested  in  supporting  the  move 
towards an energy-efficient, decarbonised transport sector. 

(Source: DG REGIO) 

These investments are expected to contribute to around 10 000 households with improved energy 
consumption  classification,  a  decrease  of  around  55  100  000  kWh  per  year  of  primary  energy 
consumption of public buildings and around 5 800 additional users connected to smart grids, as well 
as  to  around  80  km  of  reconstructed  or  upgraded  railway  lines  and  250  km  of  improved  inland 
waterways. 

For example, the energy renovation of the Nikola Tesla Primary school in the city of Rijeka involved 
insulating the external walls, ceilings and roof and replacing the windows and the doors of a building 
constructed in 1934. The project delivered more than 47 % energy savings and increased the energy 
performance  of  the  school  from  class  C  to  class  B.  The  total  cost  was  EUR  800  000,  of  which  the 
contribution from the European Regional Development Fund (ERDF) was about EUR 200 000. 

Similar  measures  were  implemented  during  the  renovation  of  the  primary  school  Mladost  in  the 
place Treštanovci. The school was originally constructed in 1954. The projects delivered about 80 % 
energy savings and the school energy performance increased from class D to class B. The total costs 
of  the  renovation  were  about  EUR  48  000,  of  which  the  contribution  from  the  European  Regional 
Development Fund (ERDF) was about EUR 12 600. 

Through  its  support  to  sustainable  transport  systems,  the  Connecting  Europe  Facility  (CEF)  also 
contributes to the goals of the Energy Union. Following  participation in the CEF  – Transport 2014-
2015 Calls, the Croatian action portfolio comprises 17 signed grant agreements, allocating EUR 350.6 
million of actual CEF Transport Funding to Croatian beneficiaries (state-of-play February 2017)20. The 
transport  mode  which  receives  the  highest  share  of  funding  is  rail  (71.3  %  of  actual  funding), 
promoting  the  development  of  an  efficient  and  competitive  railway  transport  along  the 
Mediterranean corridor. 

The maritime actions in the Croatian portfolio regard the port of Rijeka, a pre-identified section of 
the  Mediterranean  core  network  corridor.  The  interventions  include  the  construction  of  a  new 

20 Note that European Economic Interest Groups and International Organisations are excluded from the analysis. 

22 

 
 
 
 
                                                            
                              Energy Union – Croatia 

intermodal terminal for containers, upgrade of the port infrastructure, and engineering studies for an 
LNG bunkering station. The latter is part of a global project, which aims to support policy-makers in 
EU Member States, ports and ship-owners operating in the EU Atlantic and Mediterranean countries 
to  comply  with  marine  fuel  pollutant  standards.  Croatia  also  participates  in  a  number  of  multi-
beneficiary  road  actions  which  combine  road  with  technological  elements  such  as  LNG  refuelling 
methods or implementation of Intelligent Transport Systems and Services (ITS) on the road system. 
They aim to alleviate existing bottlenecks, improve safety and introduce alternative fuels on the road 
network.21 

21 Source: INEA 

23