Businesses in Croatia are facing electricity prices around 18% higher than the European Union average, according to the Croatian Employers’ Association (HUP). In its latest report, the association outlined a series of policy proposals designed to ease the cost burden on industry while preserving market-based price formation.
HUP argues that electricity costs for industrial consumers can be reduced through a balanced mix of broad relief measures and targeted support for energy-intensive sectors. Any such support, it notes, should be time-limited and fully aligned with EU state aid rules, ensuring that competitiveness is strengthened without distorting competition.
One of the central recommendations is to reinforce long-term contracting mechanisms in order to stabilize the energy component of electricity prices. The association also calls for expanding energy storage capacity, enhancing system flexibility and promoting demand-side management to reduce exposure to price volatility and peak-hour costs.
Another key proposal focuses on lowering network-related charges and regulated fees. Employers advocate optimizing grid fees while continuing investments in transmission and distribution infrastructure. They suggest introducing special pricing categories or reductions for large, stable consumers, ensuring a fair distribution of modernization costs and creating a transparent and predictable regulatory framework.
HUP further emphasizes the strategic use of fiscal and parafiscal instruments, including VAT, excise duties and renewable energy surcharges, to reduce overall electricity bills. It recommends extending existing reductions on renewable energy levies for industry beyond 2027, based on clear criteria such as energy intensity and exposure to international competition.
For sectors particularly affected by high energy costs, the association proposes activating compensation schemes under the EU Emissions Trading System. This includes mechanisms to offset indirect carbon costs in line with updated European state aid guidelines related to greenhouse gas emissions trading.
According to HUP, the overarching objective is to secure lower and more predictable electricity prices for the business community, while safeguarding the competitiveness of energy-intensive industries and enabling continued investment in the energy transition.
