The European Commission recommended on Wednesday that by the end of this year Croatia wind down energy support measures and continue to strongly implement the National Recovery and Resilience Plan and the cohesion policy programme.

The Croatian capital, Zagreb, is urged to reduce dependence on fossil fuels by accelerating the development of renewables.

The Commission today published the 2023 European Semester Spring Package with economic and social policy recommendations. The Package is based on stability programmes and national reform programmes which the member states submit to the Commission.

In its first recommendation, the Commission says Croatia should wind down the energy support measures in force by the end of 2023, using the related savings to reduce the government deficit. “Should renewed energy price increases necessitate support measures, ensure that these are targeted at protecting vulnerable households and firms, fiscally affordable, and preserve incentives for energy savings.”

The Commission recommends that all member states wind down energy support measures.

In the first recommendation, the Commission says Croatia should also ensure a prudent fiscal policy, “in particular by limiting the nominal increase in nationally financed net primary expenditure in 2024 to not more than 5.1%,” and “preserve nationally financed public investment and ensure the effective absorption of Recovery and Resilience Facility grants and other EU funds, in particular to foster the green and digital transitions.”

For the period beyond 2024, the Commission recommends that Croatia “continue to pursue a medium-term fiscal strategy of gradual and sustainable consolidation, combined with investments and reforms conducive to higher sustainable growth, to achieve a prudent medium-term fiscal
position.”

In the second recommendation, the Commission says Croatia should continue “the steady implementation of its recovery and resilience plan and swiftly finalise the REPowerEU chapter with a view to rapidly starting its implementation.” It adds that Croatia should also proceed “with the speedy implementation of cohesion policy programmes, in close complementarity and synergy with the recovery and resilience plan.”

In the third recommendation, the Commission says Croatia should reduce “overall reliance on fossil fuels by accelerating the deployment of renewables, in particular wind, solar, and geothermal sources, finalising the incomplete legislative framework, streamlining administrative procedures for permitting, simplifying the procedures for installing renewable energy sources (i.e. solar photovoltaic facilities) in multi-apartment buildings.”

“Croatia imports about 53% of the total energy consumed each year, while having great
potential in renewable energy, in particular from solar, wind, and geothermal sources,” the Commission says, adding that half the country’s electricity “is generated by hydropower plants; the share of wind energy has increased and reached 14%, but the share of solar energy is still only 1%.”

The Commission also recommends that Croatia “support small-scale renewable energy generation capacity., further upgrading the electricity transmission and distribution grids, in particular by improving the transmission links between the north and south of the country, and advancing the roll-out of smart meters.”

The Commission says Croatia should also accelerate the implementation of energy efficiency measures, including the installation of heat pumps, reduce dependence on fossil fuels in the transport sector by promoting sustainable solutions, in particular rail and the electrification of road transport, and step up policy efforts aimed at the provision and acquisition of the skills needed for the green transition.

The Commission notes that labour and skills shortages in sectors and occupations key for the green transition, including manufacturing, deployment and maintenance of net-zero technologies, are creating bottlenecks in the transition to a net-zero economy.