Thursday, 31 March 2022

Croatia Preparing Plan For Development Of Its Geothermal Potential

ZAGREB, 31 March 2022 - Economy Ministry State Secretary Nataša Mikuš Žigman said on Thursday that work was underway to draft a plan for the development of Croatia's geothermal potential.

Speaking at a government session, Mikuš Žigman said that in line with the National Recovery and Resilience Plan, the Hydrocarbon Agency would be entrusted with implementing six geothermal energy projects, for which HRK 225 million (€30 million) is envisaged.

A total of €25 million is planned to be used from the Operational Programme Competitiveness and Cohesion for the use of geothermal energy for heating.

Mikuš Žigman said that the government supported all activities to increase the life span of the joint Croatian-Slovenian nuclear power plant Krško until 2040 and that it also supported the use of nuclear energy to help decarbonise the economy.

Excise taxes on natural gas and electricity are at the minimum level prescribed by the Council directive on the taxation of energy products and electricity and the Excise Tax Act prescribes exemptions for energy products and electricity for the industrial sector, she said.

Also, the excise tax on blue-dyed diesel for the agricultural sector has been set at zero, and the government has adopted a regulation lowering excise taxes on unleaded motor gasoline and diesel.

Politics: For more, check out our politics section.

Thursday, 31 March 2022

Gas In The Centre Of The Energy Crisis, Croatia In Somewhat Better Position

ZAGREB, 31 March 2022 - Gas is at the centre of the current global energy crisis which resembles the oil crisis of the 1970s, however, Croatia is in a somewhat better position than most European countries albeit the high price of gas and other energy sources cannot be avoided, a Gas Forum heard on Thursday.

The developments concerning the global energy sector are unprecedented and the war in Ukraine just worsened the situation in particular, the gas crisis, Danijel Žamboki,  the head of the management board of the Croatian Energy Regulatory Agency (HERA) said addressing the forum organised by the Energy Marketing organisation.

He underscored that in the "worst-case scenario" Croatia is in a significantly better position than other European countries because of its diversified supply direction with the LNG terminal on Krk Island and indications of increased domestic production.

In addition, until now, Croatian consumers have been protected against gas price hikes that are unprecedented in Europe.

The director of Croatia's largest gas distributor - Gradska Plinara Zagreb (GPZ) - Miroslav Živko, said that despite the crisis GPZ can ensure the continuation of business and he announced investments in green technology such as hydrogen.

Croatia also has great potential with geothermal energy sources.

Energy price hikes - a trigger for recession

Professor of Faculty of Economics, University of Rijeka - Faculty of Economics and Business University of Rijeka Nela Vlahinić Lenz warned that energy price hikes are a classic trigger for recession, which is usually preceded by high inflation and increased interest rates.

Official data regarding inflation in Croatia aren't that bad, said the professor and added the perception has become heightened.

Monetary authorities need to be concerned with how to restrict inflation without interest rates increasing and the economy going into recession.

She expects the main impact to be felt in the autumn when price increases are inbuilt in goods and services however inflation could increase in the spring.

She added that there had not been government measures to address the inflation in the first quarter most probably because the cabinet did not want to increase the government deficit and adversely affect the plans for accession to the euro area.

Vlahinić Lenz believes that economic growth this year will be significantly lower than planned and the question is what the government can still do to buffer the effects of the energy price hike. Europe is no longer running away from state control over energy prices and possibly subsidising households and the economy.

"Public finances are doing well and the government has room for that," concluded Vlahinić Lenz. 

Business: For more, check out our business section

Tuesday, 29 March 2022

Minister Expects Fuel Prices to go Down as of Next Week

ZAGREB, 29 March 2022 - Economy and Sustainable Development Minister Tomislav Ćorić said on Tuesday that fuel prices could go down next week again, and that in case they escalated significantly for a longer period of time, the government could again resort to reducing excise taxes.

Ćorić told reporters this after a meeting of the ruling coalition partners, when asked how the government planned to respond since fuel prices have gone up again.

As of Tuesday, Eurosuper 95 is sold at most petrol stations in the country at HRK 12.45 per litre, HRK 0.61 more than on Monday, when it cost HRK 11.84 per litre on average, while the price of Eurodiesel has gone up by HRK 1.49, and prices of premium fuels have also increased.

Ćorić said that last week had brought an increase in fuel prices in reference markets and the increase was primarily due to an increase in prices of diesel and blue-dyed diesel, and slightly less of petrol.

"It is encouraging that the first two days of this week have brought a drop in fuel prices in reference markets and if that trend continues, next week we will have again a drop in prices. Until then, we will not respond," he said.

Fuel prices have been oscillating for weeks but should they escalate more significantly and over a longer period of time, the government "would possibly again resort to (reducing) excise taxes" as "it has no other significant instruments," he said.

No marked rise in electricity prices other than the one announced, no rolling blackouts planned

As regards the increase in electricity prices, reporters asked the minister if citizens should fear the increase would be higher than the government's projection of 9.6%, to which Ćorić said that the 9.6% increase was calculated based on the consumption of the average household in Croatia.

"The increase is as has been communicated. Whether it will be 8.7% for someone or 10.1% for someone else, depends on the size of the household and monthly consumption... however, an increase that would be more significant than the one announced will not happen," he said.

Ćorić also said that Croatia was not at risk of rolling blackouts and that it meets most of its electricity demand from own production, with imports constituting only a smaller portion.

Speaking of today's coalition meeting, he said that one of the topics discussed were renewable energy sources.

Saturday, 26 March 2022

EU Leaders Task EC to Propose Solution for Addressing Electricity Price Hikes

ZAGREB, 26 March 2022 - The heads of state or government of the European Union's member states, who on Friday concluded their two-day summit meeting in Brussels, tasked the European Commission to propose an efficient solution to electricity price hikes.

The European Council calls on the European Commission "to submit proposals that effectively address the problem of excessive electricity prices while preserving the integrity of the Single Market, maintaining incentives for the green transition, preserving the security of supply and avoiding disproportionate budgetary costs," according to the Council's conclusions.

The Council of the EU and the European Commission are called upon "to reach out to the energy stakeholders, and to discuss, if and how, the short-term options as presented by the Commission (direct support to consumers through vouchers, tax rebates or through an "aggregator model/single buyer", State aid, taxation (excises and VAT), price caps, regulatory measures such as contracts for differences) would contribute to reducing the gas price and addressing its contagion effect on electricity markets, taking into account national circumstances."

After the discussion on the excessive energy prices, which took several hours, Croatian Prime Minister Andrej Plenković said that it was difficult to find a single solution which would suit all the member-states, having in mind that some of them are highly dependent on Russian Russian gas, oil and coal imports.

The EU has three goals: to ensure new supply routes for gas, complete and improve the gas and electricity interconnections throughout the Union, and provide direct support to consumers, he added.

Tuesday, 22 March 2022

1,500 Agreements Signed on Co-Financing Energy Upgrade of Family Homes

ZAGREB, 22 March 2022 - The Environment Protection and Energy Efficiency Fund has sent 1,500 agreements on the co-funding of energy upgrade of family homes, valued at HRK 102 million (€13.6 million), the fund reported on Tuesday.

The fund's director Siniša Kukić underscored that more than 3,000 applications have been processed for energy efficiency cofinancing, and contracts for a part of these requests are being prepared.

"An analysis of the applications processed so far shows that a high percentage are being approved, as many as 87%," said Kukić. 

He underscored that the average amount approved for cofinancing is about HRK 68,000 per project.

"If we continue at this rate we expect that about 5,700 projects will be approved within this scheme," said Kukić and added that the programme is important with regard to achieving climate objectives but also in light of the increased energy prices. 

The majority of projects refer to insulating exterior walls, reconstructing roofs and replacing windows and doors while some intend to install systems powered by renewables.

The fund added that cofinancing projects will continue again this year through another public call for applications.

Tuesday, 22 March 2022

Fuel Prices Drop By More Than HRK 1 Per Litre

ZAGREB, 22 March 2022 - As of Tuesday, a majority of filling stations in Croatia sell the "eurosuper95" gasoline at the price of HRK 11.84 per litre, which is a drop of HRK 1.16 compared to the prices over the previous seven days, while the price of the "eurodizel" diesel fell by 1.89 kuna to about 12 kuna.

Also, according to the the portal, the prices of premium fuels fell after they were above HRK 15 per litre last week.

Last Thursday, the government adopted the directive to buffer the fuel price hike by doing away with the obligation for distributors to mix biofuel with diesel and petrol until the end of the year.

On 7 March, the government decided to lock margins on petroleum product transactions and temporarily reduce excise duties on diesel and gasoline in order to lower fuel prices.

As a result, the total margin on diesel and petrol was locked at HRK 0.75 per litre, and at HRK 0.50 per litre for blue-dyed diesel.

Amendments to legislation on excise duties have reduced excise duties by HRK 0.20 per litre of unleaded gasoline for 90 days, and the reduction for diesel is HRK 0.40 per litre.

On Monday, Prime Minister Andrej Plenković said that he expected a decrease in the fuel prices as a result of the lower average price on the Mediterranean market over the last seven days and of the set of the government's measures.

(€1 = HRK 7.564472)

Saturday, 19 March 2022

Association Calls on Croatians to Join Digital Cleanup Day

ZAGREB, 19 March 2022 - The Žmergo association on Saturday called for the deletion of all unnecessary files, apps, photos and videos so that we can reduce our digital footprint and consequently negative consequences for the environment.

The appeal is issued on the occasion of Digital Cleanup Day, observed on 19 March.

This Opatija-based association says that in the last two years, the global population has produced more data than all the civilisations, and that "each year the internet and its supporting systems produce 900 million tons of CO2." 

In the digital world, similar to the environment, there is a huge amount of trash. Unnecessary emails, files, apps, duplicates of photos and videos are all digital waste. This digital trash creates digital pollution that continues to consume energy.

The global action for cleaning digital trash is organised by the Let's Do It World (LDIW) association.

This world-changing idea began in Estonia in 2008.

For more, make sure to check out our dedicated lifestyle section.

Tuesday, 8 March 2022

Minister Talks Heineken Croatia's Green Policy, Price Hikes, Đuro Đaković TEP

ZAGREB, 8 March 2022 - Economy and Sustainable Development Minister Tomislav Ćorić on Tuesday visited the Heineken Croatia production plant in Karlovac which has invested €10 million in green projects over the past ten years as part of its sustainable business strategy.

We had great support from our employees, consumers and the local community in that, underscored Heineken Croatia's CEO Marta Bulhak.

Ćorić assessed that the company is a good example of "what Croatia needs because all industry has to move to a green transition and to undergo digitisation and transfer to a circular economy."

He congratulated the company, that employs over 300 workers, 120 of whom are hired in Karlovac, for the company's "green policy."

Heineken Croatia is a part of the international brewing company HEINEKEN and is the second largest beer producer in Croatia.

More measures to deal with rising prices, if necessary

Speaking about the decision taken by the government yesterday to cap the fuel prices, Ćorić said that "as soon as it becomes necessary, additional measures will be taken to preserve the living standard of citizens and to make it possible for the economy to function normally."

"The thing that is happening on the gas and petroleum products markets as well as on the electricity market is the consequence of extraordinary circumstances in eastern Europe and the Russian aggression on Ukraine which has led to all markets erupting but I am certain that that will calm down," said Ćorić.

In the context of whether Croatia should ban the import of gas and oil from Russia, Ćorić said that Croatia will follow suit with the majority of EU countries. It is good that Croatia has an alternative supply direction through the LNG terminal, he underscored.

The fact that we have an LNG terminal on the island of Krk could help us to experience a smaller blow than many other European economies, said the minister.

Ćorić would not specify if he supported a ban on importing energy from Russia and underscored that that decision would be made at the highest political level while in his capacity as the economy minister he would try to make sure that the economic shock in Croatia leaves the least trace and for us to come out of this even more resilient and stronger.

Asked about the coming tourism season, Ćorić said that we can expect it to be a good season if the war in Ukraine stops in a short time, however, if the crisis lasts, people will be more cautious about deciding to travel.

Asked about workers' expectations for a similar procedure to be taken for the Đuro Đaković Termoenergetska Postrojenja (TEP) company as in the case of the takeover of Sberbank Croatia by Croatia's HPB bank, Ćorić said that contact has already been made and that the ministry's officials for industry are seeking a solution.

"Đuro Đaković TEP has been existing for decades. It has changed owners and has now fallen victim to the circumstances. The fact is that the owner is on the list for sanctions. We are deeply convinced that the company that employs 860 workers, particularly in Slavonia which is a less developed region, deserves special attention and that is why we are seeking a solution to prevent production from halting and with regard to liquidity and bank loans, to ensure undisturbed functioning," he said.

The minister said that refugees arriving from Ukraine would not be treated as a burden or cost as the Croatians had experienced the same destiny in the early 1990s.

Thursday, 24 February 2022

Croatia's Energy Supply Not In Question, Economy Minister Says

ZAGREB, 24 Feb 2022 - Economy Minister Tomislav Ćorić said on Thursday Croatia's supply with key energy sources was not in question despite the escalation of the Ukraine crisis and that if prices continued to increase over a longer period of time, the government would consider how to respond.

Speaking to the press after a cabinet session, Ćorić said the supply with gas and oil "has not been brought into question at all" at the moment and that "everything will be under control."

"We hope the war operations will cease and things be brought in order, " he added. "That's what we want for Europe and the world, and first and foremost for the Ukrainian people."

As for the economic situation, Ćorić said it would depend on the energy market. The gas price on the reference market has gone up 31% since yesterday and that of a barrel of Brent oil by 6%, he said.

The minister said those rises "will definitely" impact consumer goods. "However, that is something on which we can't have significant influence at the moment."

He hopes the Ukraine-Russia escalation, and consequently the escalation of energy prices, will be short-lived. The government's measures to buffer the blow of energy price hikes take effect on 1 April.

Asked what sanctions Croatia would impose on Russia and what that would mean for Croatia's economy, exporters and tourism, Ćorić said Croatia would follow other EU member states.

The economic consequences of the crisis will be proportionate to its duration, he said, adding that one could not expect the European and Croatian economies to function normally if the "horrors of war" continued.

Energy prices, which largely depend on Russia's aggression on Ukraine, "dictate the tempo on all other markets" and Croatia, as a small and open economy, can't avoid that, Ćorić said.

As for the Fortenova company, one of whose owners is Russia's Sberbank, he said it had a number of owners, that it used international markets for financing, and that he did not expect any sanctions against the financial sector to affect the company's liquidity and functioning.

For more, check out our politics section.

Thursday, 17 February 2022

INA Nets Profit Of €173m In 2021

ZAGREB, 17 Feb 2022 - The INA Group registered a net profit of HRK 1.31 billion in 2021, after a loss of HRK 1.14 billion in 2020, the leading Croatian oil and gas group said in a financial statement on Thursday.

INA's net sales revenue grew 51.5% on the year to reach HRK 22.4 billion in 2021.

The company's CCS EBIDTA excluding special items reached HRK 3.03 billion, up by 70% from 2020.

"In 2021 the macro environment for oil and gas industry has improved thanks to the easing of restrictive measures and rising hydrocarbon prices. In such environment Exploration and Production once again spearheaded the recovered result, although the production natural decline continues in line with the mature portfolio. The other segments further supported the results, primarily Retail due to improved fuel and non-fuel sale, also partially due to tourist season, which was better than expected," the company's management board chair, Sandor Fasimon, was quoted as saying.

The financial statement notes that the hydrocarbon prices had doubled compared to 2020.

This price increase helped the Exploration and Production segment to be "the main contributor to the results with EBITDA excluding special items of HRK 2.5 billion, despite natural decline of production on mature fields."

"Refining and Marketing including Consumer services and Retail CCS EBITDA reached HRK 0.9 billion on the back of better Retail sales both in fuel and non-fuel segments."

Investments rise

Investment activities increased throughout the segments compared to 2020 with CAPEX level of HRK 1.6 billion, of which roughly half was spent in Refining and Marketing. The main strategic investment, Rijeka Refinery Upgrade Project continues with focus on construction works and equipment delivery to the site.

INA said it had successfully issued a HRK 2 billion bond on the domestic market in December 2021, "creating a solid financial base for the intensive investment cycle ahead."

"In time of changes in the energy sector, INA is committed to diversifying its portfolio and assisting the green transition, regardless of our core business. Two new solar power plants are going to be built at Virje and Sisak, which is an important step in the company’s green electricity production," the statement said.

For more, check out our business section.

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