Energy law in Croatia is governed by a series of laws and regulations designed to ensure energy security, promote renewable sources, and support environmental protection. The key legal framework in the energy sector in Croatia includes the Energy Act (Zakon o energiji, Official Gazette no. 120/12, 14/14, 95/15, 102/15, 68/18) and the related Energy Development Strategy of the Republic of Croatia until 2030, with a view to 2050, adopted on February 28, 2020. The Energy Act, which has seen a few amendments since its adoption, is still slowly trying to meet the challenging EU requirements in terms of the green transition, which emphasize renewable energy integration, energy efficiency, and environmental responsibility.
In accordance with the amended EU Renewable Energy Directive (EU/2023/2413), the Croatian Ministry of Environment and Energy submitted an amended Integrated National Energy and Climate Plan for the Republic of Croatia (NECP) for the period 2021-2030 to the European Commission in June 2024. The NECP’s main objective is to set an ambitious target of 36.4% of energy from renewable sources in gross final energy consumption by 2030 and to attract substantial investment across the energy sector, including in hydropower, wind farms, and hydrogen energy. It also supports electric battery production and the renovation and expansion of electricity networks.
Croatian Entrepreneurs in the Energy Sector
Despite being a small country, Croatia has significant potential for renewable energy development thanks to its geographic and climatic conditions. The Adriatic coast, especially regions like sunny Dalmatia, is becoming a prime location for solar energy projects. Additionally, other coastal areas with high wind activity offer favorable conditions for wind energy production.
In recent years, it has been nearly impossible to construct wind farms in Croatia, and Croatia is working to address this problem. In July 2023, urgent amendments to the Renewable Energy Sources and High-Efficiency Cogeneration Act (Official Gazette No. 138/21, 83/23) were adopted, along with amendments to the Electricity Market Act (Official Gazette No. 111/21, 83/23). These amendments are crucial for Croatia’s development of the electricity market and the construction of new renewable energy facilities. The legislative amendments are expected to significantly accelerate the growth of solar energy projects and the construction of wind farms by enabling simpler and faster processing time for permits – a matter that has caused extended waiting periods for investors in renewable energy projects. The changes aim to support the development of smaller and community-based solar projects, improve incentive systems (such as feed-in tariffs and local subsidies), and encourage energy production from renewable sources.
Furthermore, Croatia has a strong presence in automotive electrification, with companies like Bugatti Rimac and Rimac Technology (both part of Rimac Group) leading in high-performance electric vehicle manufacturing. Rimac Group’s investments in innovative projects, such as the fully autonomous robotaxi Verne, demonstrate the potential for integrating advanced technologies into energy and transportation. Through artificial intelligence (AI) and the Verne robotaxi technology, Croatia has an opportunity to modernize its energy sector, enabling smarter use of renewable resources and maximizing green energy utilization.
Also, in a recent expansion, Rimac Technology launched Rimac Energy, a new brand dedicated to stationary energy storage systems (ESS). ESS solutions like those developed by Rimac Energy allow Croatia to store surplus energy generated from renewables like wind and solar, making it available when demand peaks or renewable generation is low.
Another highly innovative project in the energy sector comes from the Croatian company Sunceco. In collaboration with a team of scientists from a local university, Sunceco has developed a lithium-ion battery prototype intended for commercialization and mass production in Croatia. The goal of this project is to produce batteries designed for electric vehicle use.
Practice Is Far Ahead of Legislation
Unfortunately, existing Croatian laws have not yet been adapted to address the specific legal aspects of artificial intelligence, autonomous vehicles, and other technological innovations that are increasingly present in the energy sector.
Rapid technological advancements are underway in Croatia. Although the private sector primarily attracts investments in green technologies, administrative barriers and a lack of infrastructure for sustainable energy slow down their implementation and growth. For Croatia to fully leverage its natural resources and technological innovations and meet EU targets, swift adaptations of the legislative framework are needed to support the demands of the modern green economy. Additionally, for genuine progress, it is essential to modernize legislative frameworks to improve administrative efficiency and strengthen infrastructure support for renewable energy and electrification projects. Through these measures, investors will have greater motivation to invest, which can speed up the energy transition and increase the stability of the sector in Croatia.
By Tomislav Halle, Partner, Head of Energy Practice, Halle & Simac
This article was originally published in Issue 11.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
