On the basis of EU rules on state aid, the European Commission has approved a Croatian program worth 104 million euros to reduce electricity consumption fees for energy-intensive companies.

The goal of the program is to mitigate the risk that energy-intensive companies move their activities to locations outside the Union with less ambitious climate policies because of this fee. In addition, the program contributes to the achievement of the EU's climate and environmental goals set out in the European Green Plan.

With the Communication on the European Green Plan from 2019, the Commission increased its climate ambitions and set the goal of net zero greenhouse gas emissions by 2050. The European Climate Law has been in force since July 2021, which established the goal of climate neutrality by 2050 and introduced a transitional the target of reducing net greenhouse gas emissions by at least 55% by 2030. This act serves as the basis for legislative proposals under the "55% Ready" package presented by the Commission on 14 July 2021.

More information will be available under case number SA.102294 in the state aid register on the Commission's competition website after confidentiality issues have been resolved. A list of new state aid decisions published online and in the Official Gazette is available in the Competition Weekly e-News.

In particular, Croatia plans to reduce the electricity consumption fee for these companies, which finances the introduction of renewable energy sources in Croatia ("fee for renewable energy sources"). Paying the full amount of compensation for renewable energy sources increases i. the risk that certain energy-intensive companies move their activities to locations outside the EU with less ambitious climate policies, and ii. the cost of electricity for energy-intensive companies, thereby dissuading them from electrifying production processes.

The program will last until December 31, 2028 and will be open to companies operating in the sectors listed in Annex I of the Guidelines on state aid for climate, environmental protection and energy for 2022. These sectors are large consumers of electricity and are exposed to international trade. Program users will be required to consume at least 500 MWh per year. The reduction of the fee for renewable energy sources within the program will amount to a maximum of 75% and will depend on the user's consumption - the higher the consumption of electricity, the greater the reduction. After applying the fee reduction, it must not be lower than 0.5 EUR/MWh. Users will have to carry out an energy audit and i. make certain investments in energy efficiency, ii. invest in projects that lead to a significant reduction of their greenhouse gas emissions or iii. to cover at least 60% of their consumption with electricity from renewable sources. Croatia has also drawn up a transitional plan for the gradual abolition of the reduction in fees for renewable energy sources for energy-intensive companies that paid reduced fees for renewable energy sources in 2020 or 2021, but do not meet the conditions of the new program.