The European Commission has approved, in accordance with EU rules on state aid, the Croatian program to support the production of electricity from renewable sources.

The measure will help Croatia achieve its renewable energy targets, including those set out in its Recovery and Resilience Plan, but also contribute to Europe's goal of achieving climate neutrality by 2050 without unduly distorting competition in the single market.

Croatian program

Croatia has informed the Commission of its intention to introduce a new support program for electricity from renewable sources, namely wind farms, solar power plants, hydropower plants, biomass power plants, biogas plants and geothermal power plants.
Under the program, support will be provided in the form of a premium in addition to the market price of electricity. The premium will be determined by a tender procedure and will not be higher than the difference between the average production cost for each renewable energy production technology and the price on the electricity market. Beneficiaries will be selected in tenders to be held in the period 2021-2023.
The measure, with a total budget of about 783m euros (6 billion kuna), will be open until 2023. The aid will be paid to selected beneficiaries for a period of 12 years.
The program will help Croatia increase its share of electricity produced from renewable sources and reduce emissions of CO2 and other greenhouse gases. It will also support Croatia's commitment to achieving its European climate and environmental goals, as set out in its National Energy and Climate Plan and its Recovery and Resilience Plan.

Commission assessment

The Commission has assessed the program in line with EU state aid rules, in particular the 2014 State Aid Guidelines on State Aid.
The Commission has identified support as needed to further develop renewable energy production and to help Croatia achieve European and national environmental goals. The aid also has an incentive effect because electricity prices do not fully cover the costs of producing electricity from renewable sources. Therefore, without support, there would be no investment from selected beneficiaries.
Furthermore, the aid is proportionate and limited to the minimum necessary because the level of aid will be determined through a tender and cannot exceed the difference between the market price of electricity and the cost of production.
Finally, also thanks to the award of aid through a tendering procedure, the Commission found that the positive effects of this measure, in particular the environmental effects, outweighed the possible negative effects in terms of possible distortions of competition.
On this basis, the Commission concluded that the Croatian program is in line with EU state aid rules as it will facilitate the development of renewable electricity production using various technologies in Croatia and reduce greenhouse gas and CO2 emissions, in line with the European Green Agenda. , without undue distortion of competition in the single market. Find out more here.