Croatia needs to shift fossil fuel imports away from Russia, and speed up the deployment of renewables as part of EU measures to cut overall reliance on fossil fuels, the European Commission said on Monday.
"Croatia needs to accelerate decarbonisation efforts, including in the industry, reduce energy import dependency from Russia, and take measures to foster integration in the single market,” the Commission said in its country-specific recommendations on Croatia which are part of the European Semester Spring 2022 Package.
Croatia has committed to a phase-out of coal for electricity production by 2033.
In 2020, Croatia reached a share of 28% of energy from renewable sources in gross final energy consumption, exceeding its target of 20%. In 2021, imports of Russian gas accounted for 22% of total natural gas supply, whereas 57% was imported through the new liquefied natural gas (LNG) terminal, which is operating since the beginning of 2021, the Commission noted.
Gas and oil represent 30.3% and 33.7% of the Croatian energy mix, respectively.
Croatia has to accelerate the deployment of renewables, focusing in particular on wind, solar and geothermal sources, including through small-scale renewable energy production and developing energy communities, mainly by streamlining procedures for administrative authorisation and permits, the Commission said.
Wind and solar energy represent around 2.1% of Croatia's energy mix with shares of 13% and 1% of the total installed electricity-generation capacity, respectively.
The Adriatic country also has to further upgrade electricity transmission and distribution grids and invest in electricity storage, the Commission recommended, adding that a stepped-up action is needed to reduce energy demand by improving energy efficiency, mainly in residential buildings, and to reduce dependence on fossil fuels in the heating and transport sectors.
Moreover, in 2023, Croatia has to ensure that the growth of nationally-financed current expenditure is in line with an overall neutral policy stance, taking into account continued temporary and targeted support to households and firms most vulnerable to energy price hikes and to people fleeing Ukraine, the Commission said.
For the period beyond 2023, Croatia has to pursue a fiscal policy aimed at achieving prudent medium-term fiscal positions and to proceed with the implementation of its recovery and resilience plan, the EC said in it its recommendations.