Croatia proposes investments from EU ETS proceeds of EUR 650 million

A public debate has been launched in Croatia for the plan for revenues from greenhouse gas emission allowance auctions in the five-year period through 2030. The government is counting on a total of EUR 650 million. The funds are intended for the green transition and sustainable development, including low-carbon technologies for industry and agriculture and reducing energy poverty.

Minister of Environmental Protection and Green Transition Marija Vučković presented the planned use of funds from the sale of emission units through auctions in Croatia for the period from 2026 to 2030, which is one of the key strategic documents in climate policy. She pointed out that for the first time, the country is systematically distributing the revenues from the European Union’s Emissions Trading System (EU ETS).

“CO₂ emissions trading is one of the most effective mechanisms for reducing greenhouse gas emissions at the European Union level, while simultaneously enabling significant revenues that we will direct entirely into the green transition and sustainable development. We will invest these EUR 650 million in further decarbonization and the introduction of low-carbon technologies and innovations in industry, agriculture and other economic sectors, as well as in measures to reduce energy poverty and reduce costs for citizens and entrepreneurs,” the minister stated.

Public transportation is biggest item

Vučković added that special emphasis is on developing a green economy without job losses and that the most significant investments would be in public transportation, to reduce traffic congestion and harmful gas emissions.

“Through energy renovation measures, including the installation of heat pumps and solar panels in households and public institutions, we will further reduce energy poverty and increase the efficiency of the public sector,” Vučković stressed, adding that investments in waste management and electric vehicles would contribute to cleaner air, greater energy independence and a more competitive economy.

The plan involves heat pumps for households and institutions and waste management programs

She also said a significant portion is intended for sectors outside the EU ETS, including buildings, agriculture, waste management and small and medium-sized enterprises, as well as climate change adaptation measures and ecosystem protection.

The minister explained that the plan is aligned with existing activities such as the use of funds from the EU’s Modernisation Fund and Innovation Fund, as well as with Croatia’s draft Social Climate Plan, submitted to the European Commission.

Funds going where they are needed most

The proposal is in the public debate phase, the ministry announced.

“Today we are talking about one of the key instruments of the green transition – revenues from emission allowances, which represent one of the most important sources of financing for our fund,” Director of the Environmental Protection and Energy Efficiency Fund (FZOEU) Luka Balen said. The funds will be directed where they are needed most – into the energy renovation of buildings, solar power plants, incentives for the use of renewable energy sources, e-mobility, industrial decarbonization, and climate change adaptation and mitigation, he asserted.

The official recalled that through its programs the fund has renovated 38,000 family homes and cofunded more than 15,000 systems for the utilization of renewable energy sources, mostly photovoltaics. The next call, worth EUR 38 million, aims to strengthen citizens’ resilience to the energy crisis and accelerate the green transition, Balen said.