Dispatch from Croatia | May '26
***Our weekly Dispatches provide an overview of the most relevant recent and upcoming developments for the shift to climate neutrality in selected European countries, from policy and diplomacy to society and industry. For a bird's-eye view of the country's climate-friendly transition, read the respective 'Guide to'.***
15 May 2026, 09:00
Katarina Gulan, Marina Kelava
Stories to watch in the weeks ahead
- Rising energy prices – Inflation in Croatia rose to almost six percent in April. Energy was the key driver, with prices jumping 17.5 percent year-on-year. While the government has linked the surge to the crisis in the Middle East and global market disruptions, opposition parties argue that inflation is also rooted in domestic economic weakness and warn of further price increases. To soften the blow from the energy crisis, the government presented a 450 million euro support package, continues to regulate fuel prices, and extends the freeze on electricity and gas prices until 30 September. Attention is now turning to tourism during the upcoming summer season, which plays a key role for the country’s economy. The tourism minister has called on the sector to reduce prices by 10 to 20 percent in order for Croatia to remain competitive.
- Public debate over 50 billion-euro AI data centre – “Project Pantheon”, proposed for the municipality of Topusko in central Croatia, could become the largest investment in the country’s history. Construction is expected to begin in 2027, with operations scheduled for 2029. However, the project has sparked scepticism among experts, particularly regarding the ambitious timeline and the enormous energy demand required to operate such a facility. The electricity needed to power a one gigawatts (GW) data centre would amount to almost ten percent of Croatia’s total electricity consumption in 2024. The project includes the construction of a substation, a transmission line and a large solar power plant. Supporters have claimed that it would modernise the infrastructure, while critics fear negative environmental consequences.
- Croatia still collecting proposals for national Nature Restoration Plan – Croatia is currently in the process of gathering proposals for its National Nature Restoration Plan (NNRP), a key strategic document required under EU legislation. The document is supposed to help align the development of renewable energy and energy infrastructure with nature restoration efforts in order to accelerate the green transition without harming key ecosystems. Member states must designate specific areas for the development of renewable energy, energy grids, and storage infrastructure, provided that significant environmental impacts are avoided or compensated for. So far, nearly 200 project proposals have been submitted by various stakeholders, including institutions, experts, and civil society organisations. Croatia is required to submit a draft to the European Commission by 1 September.
The latest from Croatia – last month in recap
- Investment plan for green transition – Croatia has unveiled a 650-million-euro investment plan, funded by revenue from the EU Emissions Trading System (EU ETS) , aimed at accelerating the country’s green transition. The plan marks the first systematic approach to allocating revenues from emissions allowances in Croatia. The funds will be directed toward reducing greenhouse gas emissions, supporting decarbonisation, and introducing low-carbon technologies across key sectors such as industry, agriculture, and small- and medium-sized enterprises. Priority investments include the development of public transport to cut emissions, building energy renovation, installation of heat pumps and solar panels, and expansion of renewable energy and e-mobility.
- CCS project – As part of the country’s climate strategy, the Croatian economy ministry has commissioned a project worth several million euros focused on assessing the country’s potential for carbon capture and geological storage (CCS). The initiative will analyse both onshore and offshore sites, including storage possibilities in the Adriatic Sea, to determine long-term capacity and feasibility. The project represents a preparatory step towards deploying CCS technologies, particularly in hard-to-abate industrial sectors.
- Croatia and Bosnia and Herzegovina sign gas deal – Croatia and Bosnia and Herzegovina have agreed to build a gas pipeline linking their networks. The pipeline would also enable access to LNG supplies via the terminal on the island of Krk. Officials described the project as strategically important, saying it would diversify gas supply routes and reduce dependence on a single source. However, the project has faced criticism from environmental groups. Critics have argued that Bosnia and Herzegovina’s gas consumption is currently low and that the planned capacity far exceeds actual need. They’ve also warned that investing in new fossil fuel infrastructure may be economically unjustified in the long term.
- Complex regulations for energy communities – A new study shows strong public interest in energy communities in Croatia, but their development is being held back by an inadequate legal and institutional framework. More than 70 percent of citizens said they would like to participate in community energy projects, yet complex regulations and a lack of practical implementation discourage them. The research, presented by the Institute for Political Ecology (IPE) and Terra Hub, highlighted that citizens recognise the key benefits of energy communities, including lower energy costs, greater energy independence, and positive environmental impacts. Although a few communities have been formally established, they are unable to operate in practice due to unresolved regulatory issues – such as the inability to share energy.
- Methane flaring continues in Croatia despite EU ban – Fossil fuel companies in Croatia and Hungary are continuing to burn off methane despite a European Union ban on routine flaring, according to a new analysis by Greenpeace. The EU regulation, which came into force in early February 2026, prohibits the routine flaring of methane in the energy sector. However, research by Greenpeace found that the practice is still ongoing in both countries. Between February and March, researchers recorded 71 flaring events in Croatia and 205 in Hungary.
Melita’s picks – reading recommendations & events
- Energy sector gathers in Zadar - The upcoming Power & Energy Masters 2026 will take place from 20 to 22 May 2026 in Petrčane, Zadar. The three-day event is one of Croatia’s leading energy conferences, bringing together experts, industry leaders, researchers, and policymakers to discuss the future of the energy sector. For professionals and stakeholders working in these areas, the conference represents a valuable platform for insight, networking, and discussion of current industry trends.
- AI & Energy - A recent International Energy Agency (IEA) report highlighted how artificial intelligence (AI) is becoming a key force reshaping the global energy landscape. AI is driving a sharp rise in electricity demand, but the challenge extends beyond generation capacity. The real bottleneck lies in infrastructure, as power grids, transformers, gas-fired plants, and battery storage systems are increasingly struggling to keep up with the rapid expansion of the industry.
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