Businesses in Croatia are grappling with electricity prices approximately 18% above the European Union average, as reported by the Croatian Employers’ Association (HUP). In response to this financial strain, HUP has proposed a range of policy measures aimed at alleviating costs for industrial consumers while maintaining a market-based pricing structure.

The association advocates for a comprehensive approach that combines broad relief measures with targeted support specifically for energy-intensive sectors. Such support, according to HUP, should be temporary and compliant with EU state aid regulations to ensure it enhances competitiveness without disrupting market dynamics.

A significant recommendation from HUP is the enhancement of long-term contracting mechanisms. This strategy aims to stabilize the energy component of electricity prices, which is crucial for businesses facing price volatility. Additionally, there is a call for an increase in energy storage capacity and improved demand-side management practices to mitigate exposure to peak-hour pricing and fluctuations in the market.

Another focal point in HUP’s proposals is the reduction of network-related charges and regulated fees. The association suggests optimizing grid fees while ensuring continued investment in transmission and distribution infrastructure. They propose creating special pricing categories or discounts for large, stable consumers to promote a fair allocation of modernization costs and establish a transparent regulatory framework.

Furthermore, HUP emphasizes leveraging fiscal tools such as VAT, excise duties, and renewable energy surcharges to help lower overall electricity expenses. The organization recommends extending existing reductions on renewable energy levies for industrial sectors beyond 2027, contingent on specific criteria like energy intensity and vulnerability to international competition.

To address the challenges faced by sectors heavily impacted by high energy costs, HUP proposes activating compensation mechanisms under the EU Emissions Trading System. These mechanisms would aim to offset indirect carbon costs in accordance with updated EU state aid guidelines related to emissions trading.

Ultimately, HUP’s overarching goal is to achieve lower and more predictable electricity prices for businesses while ensuring that energy-intensive industries remain competitive. This approach aims to facilitate ongoing investments in the transition toward more sustainable energy solutions within Croatia’s industrial landscape.