EC recommends Croatia abolishes subsidies for energy by the end of the year

On Wednesday, the European Commission recommended that Croatia stop energy support measures by the end of this year, continue the firm implementation of the National Recovery and Resilience Plan and the cohesion policy program, and reduce dependence on fossil fuels by faster development of renewable sources.

On Wednesday, the European Commission published the Spring Package of the European Semester, which, among other things, contains recommendations in the field of economic and social policy. The spring package is based on the stability programs and national reform programs submitted by the Member States to the Commission. As part of this, the Commission made three recommendations to Croatia for this year and the next.

In the first, the Commission recommends that the support measures that are in force to reduce energy costs for the economy and the population be suspended by the end of this year and that the savings thus achieved be channeled into reducing the budget deficit.

In the event of a new increase in energy prices that would require additional support, these supports should be aimed at protecting vulnerable households and businesses, they should be fiscally affordable and should contain incentives for energy saving.

The commission recommended that all member countries abolish energy subsidies.

The first recommendation also indicates the need to conduct a prudent fiscal policy, by limiting the nominal increase in primary net expenditures to a maximum of 5.1 percent in the following year. It is also recommended to preserve nationally financed public investments and to ensure the effective use of grants from the Recovery and Resilience Mechanism and other European funds, especially for encouraging green and digital transition.

For the period after 2024, it is recommended to continue with the medium-term fiscal strategy of gradual and sustainable consolidation together with investments and reforms leading to higher, sustainable growth in order to achieve a prudent fiscal position in the medium term.

In the second recommendation, the Commission says that Croatia should continue with strong implementation of the recovery and resilience plan and quickly complete the REPowerEU chapter in order to start its implementation as soon as possible. The rapid implementation of the cohesion policy program is also recommended.

In the third recommendation, the commission points out that it is necessary to reduce dependence on fossil fuels by faster development of renewable sources, especially wind and solar energy and geothermal sources, by completing the incomplete legislative framework, by simplifying administrative procedures for issuing permits and procedures for installing equipment such as solar panels in multi-apartment buildings.

The commission states that Croatia imports about 53 percent of the energy consumed annually, although it has great potential in renewable sources, especially in wind and solar energy and geothermal sources. Half of the production comes from hydropower plants, the share of wind power plants has increased to 14 percent, but the share of solar energy is only one percent.

It is also recommended to support small producers of renewable energy, improve the transmission and distribution network of electricity, especially by improving the transmission connection between the north and south of the country, and the faster introduction of smart meters.

It also recommends faster implementation of energy efficiency measures, including the installation of heat pumps, to reduce dependence on fossil fuels in the transport sector by promoting sustainable solutions, especially in the railway sector and the electrification of road transport.

The commission also recommends Croatia to step up its efforts to acquire the skills needed for green transition. In its analysis, the Commission states that the lack of labor and the necessary skills in the production, development and maintenance of zero-emission technologies represent bottlenecks in the transition to a zero-emission economy.

Source: HRT