In Croatia, the business sector is grappling with electricity prices that are approximately 18% higher than the average across the European Union. The Croatian Employers’ Association (HUP) has released a report outlining several policy recommendations aimed at alleviating the financial burden on industries while maintaining a market-oriented pricing structure.
HUP suggests that industrial electricity costs can be mitigated through a combination of broad relief measures and targeted assistance for sectors heavily reliant on energy. The association emphasizes that any proposed support should be temporary and compliant with EU state aid regulations, ensuring that it bolsters competitiveness without disrupting market dynamics.
A key recommendation from HUP is to enhance long-term contracting mechanisms, which would help stabilize the energy component of electricity pricing. Additionally, the association advocates for increased energy storage capacity, improved system flexibility, and demand-side management strategies to minimize exposure to price fluctuations and peak-hour expenses.
Another significant proposal involves reducing network-related charges and regulated fees. Employers are calling for the optimization of grid fees while continuing necessary investments in transmission and distribution infrastructure. They propose creating special pricing categories or discounts for large, stable consumers, which would ensure an equitable distribution of modernization costs and establish a clear and predictable regulatory framework.
The strategic application of fiscal and parafiscal tools is also highlighted by HUP, including adjustments to VAT, excise duties, and renewable energy surcharges, aimed at lowering overall electricity expenses. The association recommends extending existing reductions on renewable energy levies applicable to industries beyond the year 2027, contingent upon specific criteria such as energy intensity and competitive exposure.
For sectors that are particularly vulnerable to elevated energy costs, HUP proposes activating compensation mechanisms within the EU Emissions Trading System. This would involve measures designed to offset indirect carbon costs, aligning with updated European state aid guidelines concerning greenhouse gas emissions trading.
Ultimately, HUP’s overarching goal is to achieve lower and more predictable electricity prices for businesses, while simultaneously ensuring the competitiveness of energy-intensive sectors and facilitating ongoing investments in the transition towards sustainable energy solutions.
