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EU gives green light to Croatia’s support scheme for energy-intensive firms

The European Commission said in a statement that it has approved a Croatian scheme that grants reductions to energy-intensive companies on a surcharge to finance support for renewable electricity production.

The EU executive body decided that the scheme – which will apply until 31 December 2021 and will have a provisional annual budget of 10 million euros – is in line with EU state aid rules.

Croatian support for renewable energy is at present financed through contributions from electricity consumers, based on their consumption.

The support system will benefit companies active in Croatia in sectors that are particularly energy-intensive and are more exposed to international trade. The beneficiaries will obtain a reduction of up to a maximum of 80 per cent of their contribution to the financing of support to renewable energy, according to the Commission’s statement.

Croatia also submitted an adjustment plan to align with State aid rules the level of reductions from which a number of eligible and non-eligible companies have benefitted since 2013. The Commission assessed the measure and the adjustment plan under EU State aid rules and concluded that the compensation will only be granted to energy-intensive companies exposed to international trade, in line with the requirements of the Guidelines on State Aid for environmental protection and energy.

“Furthermore the measure will promote the EU energy and climate goals and ensure the global competitiveness of energy-intensive users and industries, without unduly distorting competition”, reads the statement.

Croatia doesn’t want to miss out on taking advantage of the opportunity to increase its share of energy production from renewable sources.

“In view of the goals of the European Green Deal, Croatia has a great challenge to achieve the set goals by the end of 2030, therefore the adoption of regulations and laws is very important,” said Marija Šćulac Domac, Energy and Environmental Sector Director at HGK Renewable Energy.

Croatia produces only about half of its own electricity, a major part of which is coming from hydropower (58 per cent). The share of wind energy in the total domestic electricity generation amounts for 10 per cent, biomass for 2.4 per cent and solar only for 0.6 per cent. The overall share of renewable sources in 2018 stood at 28 per cent.

Croatia’s revised National energy and climate plans (NECP) stipulates that the share of RES will increase to 36.4 per cent by 2030. Given Croatia’s natural potentials, the government aims to boost its wind and solar energy capacities significantly in the next ten years.

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