The Croatian Employers’ Association (HUP) has called for lower electricity supply costs to maintain the competitiveness of the domestic industry and prevent a negative impact on investments, exports, and jobs.
HUP presented a policy paper on electricity prices for the business sector.
The energy price issue is no longer solely an energy-related topic, but one of the key questions concerning the competitiveness of Croatian industry, new investments, and the preservation of quality jobs, according to HUP.
Analysis shows that the primary challenge isn’t the wholesale price level itself, but the limited availability of stabilization instruments that are already operational in other European Union member states.
Large companies pay 18% more for electricity than the EU average
While nominal electricity prices provide a partial view of the costs, the actual burden on the Croatian economy is best reflected through prices expressed in purchasing power standards (PPS).
Small businesses – with a consumption of 20–500 MWh – pay 0.250 PPS per kilowatt-hour (kWh), which is 12% higher than the EU average of 0.224 PPS/kWh. Large companies and energy-intensive industries – with a consumption of 2,000–19,999 MWh – pay 0.194 PPS/kWh, or 18% higher than the EU average of 0.165 PPS/kWh.
According to the document, this gap reduces not only current competitiveness but also the private sector’s long-term investment capacity for modernizing and expanding the domestic industrial base.
HUP estimated that every 10% increase in electricity prices negatively impacts the employment rate by 1 to 1.5 percentage points.
Follow Slovenia’s example
HUP noted that for the 2026–2030 period, Croatia has already planned EUR 50 million in compensation from revenues generated by auction allowances within the EU Emissions Trading System (EU ETS). This confirms the government’s commitment to protect the industry, but the measure remains limited to a small number of sectors, the association added.
Upgrading this model through the Clean Industrial Deal State Aid Framework (CISAF) program would create additional investment leverage, HUP believes.
Germany, Bulgaria, and Slovenia have introduced CISAF support programs
CISAF is a time-limited, conditional instrument for protecting competitiveness, not a subsidy. The beneficiary is required to reinvest at least 50% of the received aid within 48 months into energy efficiency, renewable energy sources, or electrification.
Employers point out that CISAF programs have been introduced by Germany, Bulgaria, and Slovenia, with Austria soon to follow.
If Croatia, following Slovenia’s example, intends to secure an annual framework of EUR 30 million, the reinvestment obligation would mean an immediate mobilization of EUR 15 million in private capital per year for energy transition projects, without any additional burden on general tax revenues, HUP explained.
The document emphasizes that implementing the proposed measures would enable more stable planning for industrial investments, accelerate the electrification of manufacturing processes, and reduce the risk of production relocating outside the EU.
Proposed measures
- Introduction of a national support program based on CISAF
- Acceleration of permitting and grid connections for industrial electrification, renewable energy, and energy storage projects
- Adjustment of the network tariff system
- Development of accessible long-term power purchase agreement (PPA) models
- Establishment of a coordination mechanism to accelerate investments in industrial decarbonization.
