Climate and Energy

Croatian vision of a fossil future

For some reason, the Croatian government believes it is rational to base its national energy policy for the next 3 or 4 decades on coal and oil. So currently, the biggest energy projects planned in Croatia are a coal thermal power plant and oil drilling in the Adriatic Sea.

Croatia is the newest EU member state, which has been facing a constant economic crisis for 7 years, with no indications that a real improvement of quality of life is coming soon.

At the end of 2011, a coalition of political parties led by the Social-Democrats won the parliamentary elections and formed a government. There were high expectations from the new government who won partly because of their promises of solving Croatia’s economic problems. However, they soon disappointed the majority of their voters, abandoning social-democratic principles and showing that they didn’t have a plan for solving the economic crisis. They needed “some big projects” they could implement, and they needed them fast. Therefore they simply took over the projects that the former government had been pushing – the same former government that had lost the elections because it didn’t have a clear vision of development and was deeply involved in corruption.

One of the first ideas that the new government took over from its predecessor was the construction of the 500 MW Plomin C coal thermal power plant in Istria in the west of Croatia. At that point, the environmental groups Zelena akcija – Friends of the Earth Croatia and Zelena Istra had already been campaigning for 6 months against the construction of this project. The Government claimed that with Plomin C they would reduce Croatian dependence on imported energy. To some people, this seemed a reasonable argument, considering that 30% of electricity used in Croatia is imported.

Reducing dependency with imported coal?

Reducing dependence on imported energy is a pointless argument in advocating for a coal power plant in Croatia, because the country doesn’t have any domestic coal left. So any new coal power plant would need to rely on imports. At the same time, the share of electric energy from sun and wind is lower than 3%.

Moreover, the health impact from Plomin C would be very significant as well. Despite using the “newest technology,” as frequently cited by the project promoter, Hrvatska Elektroprivreda (HEP), Plomin C has serious risks: according to Greenpeace Croatia it could cause almost 25 premature deaths every year, and several thousands of people are expected to develop diseases, as concluded in its analysis of the external costs of Plomin C.

Considering that “A roadmap for moving to a competitive low carbon economy in 2050” aims for the reduction of CO2 emissions in the EU by at least 80-95% by 2050, Plomin C would that year emit between 40% of total allowed emissions in Croatia for all sectors (in case of 80% reduction) and over 100% of allowed emissions (in case of 95% reduction). At the same time, this project is in conflict with the local spatial plan, in which there is no coal power plant.

Extremely expensive

As HEP doesn’t have funds for this project, it announced a tender to get investors to form a joint venture. HEP has chosen Japanese company Marubeni, in cooperation with French Alstom. Both of them have previously been convicted for corruption. HEP is offering a long-term power purchase agreement – a guarantee to buy at least 50% of electric energy from Plomin C for a period of 20-30 years. Negotiations with Marubeni are still ongoing, therefore no information on the content of the agreement has been officially disclosed. However, media reports suggest that Marubeni is requesting a guaranteed price of over EUR 70 per MWh. Compared to around EUR 40 per MWh, the current price on the European market. Marubeni’s demand is extremely expensive. Basically, this would mean that foreign investor would build a power plant that would use foreign coal, and would sell us electricity that is 75% more expensive than what we could buy on the European market.

The Croatian environmental groups Zelena akcija – Friends of the Earth Croatia and Zelena Istra, later joined by Greenpeace Croatia, have been campaigning for several years against Plomin C. They have managed to raise a debate on the national level and prolong the entire process by at least 2 years. After dozens of protest actions, panel discussions, press conferences and legal actions, the contract is still not signed and construction is still far away. After a number of demands, local authorities finally decided to announce a referendum on Plomin C that was held on Sunday, March 29th.

94 percent voted against the power plant, but the outcome is not legally binding. Nevertheless, it is a very strong message for the Government, HEP and investors. In normal circumstances, it would be hard to imagine that those actors would neglect the decision of a local referendum. Who would invest EUR 800 – 1000 million in a project against almost 95% of residents voted against?

However, Croatian decision-makers’ vision of a fossil future is something that is hard to change, and it is possible that HEP, the government and Marubeni will simply ignore the results of the referendum and continue towards the construction of Plomin C. This would mean that environmental groups would have to continue campaigning in order to convince the government to accept the decision on the local referendum

Risk management in the government

At the end of this year, there will be new elections for the Croatian Parliament. The ruling coalition is aware that it has not started any large infrastructural project in over 3 years of their mandate, and that they have had to withdraw from several ideas due to large public opposition. The final decision on Plomin C will be probably the result of some risk management analysis. Will it be more damaging for them not to respect the referendum decision against Plomin C, or to withdraw from another larger project? Environmental groups from Croatia will do their best to make the first option more risky for the Government.

It is deeply concerning that instead of the government concluding that it has to come up with a new vision of development based on a different approach to solving the economic crisis and a different way of communicating with the public, it has come up with a new idea – oil and gas drilling in the Adriatic sea. The government has started claiming that Croatia will become the new Norway, and that there are probably huge quantities of oil and gas in the Croatian part of the Adriatic.

The Adriatic Sea is located between Italy, Croatia, Montenegro, Slovenia and Bosnia and Herzegovina. It resembles a large bay that is connected with the rest of Mediterranean only by one, rather small channel. In case of any kind of accident, oil exploration and exploitation would endanger the entire Adriatic ecosystem, including all people whose livelihoods depend on tourism and fishing. Even among the companies that are presented as “the best”, “most professional”, and “safest”, such as BP or Shell, catastrophic errors can and do happen, but the direct responsibilities these companies bear for the damage they cause is minimal.

This kind of damage is incalculable for the environment, for the fauna, but also for the residents who live there. The sea current in the Adriatic moves from south to north on the eastern (Croatian) coast, and from north to south on the western (Italian) coast, which means that an oil spill anywhere would very quickly spread across the entire Croatian coast and neighboring Italy.

This harmful project will prolong Croatia’s dependence on fossil fuels and will contribute to the deepening of the climate crisis, which already has devastating impacts on humans, like the extreme weather events that have caused floods and droughts in the Balkan region during the past few years.

Bad for the economy

Oil drilling in the Adriatic also threatens tourism, one of the most lucrative branches of the Croatian economy, which not only employs a large number of people, but also regularly contributes around 15% or more to the annual GDP. This makes it one of the few stable industries in Croatia. Drilling threatens fishing as well, an industry which employs many people throughout the year, especially in areas which don’t have many employment opportunities, such as islands and smaller coastal cities.

Several Croatian environmental groups, like Zelena akcija – Friends of the Earth Croatia, WWF Adria and Greenpeace Croatia, Green Istria and Sunce formed a coalition “S.O.S. for the Adriatic” and have started a national campaign against oil drilling. In just a few months, the coalition has organized several media events and managed to become a recognized opponent of the oil drilling.

This coalition has already had its first victory. The government had a plan to sign a contract for oil drilling by 2 April. But Italy and Slovenia initiated a public consultation on the Croatian plan. Because of that, it is not possible to sign the contracts before June. This has provided extra time to include other groups – Unions, fishermen, tourist workers… – in the campaign, and to target the companies planning to drill. The Prime Minister even announced a referendum on oil drilling, only to later take it back, and delayed the possibility of a referendum by several years.

Back to the fossil era

As the government obviously is not eager to organise a referendum, the “S.O.S. for the Adriatic” coalition is considering the possibility of forming a large network of supporters on the national level who could collect enough signatures to force a referendum. It is a very hard task, and requires signatures of 10% of voters, collected in 15 days, with many other limitations. Another option is a local referendum on the question of the Adriatic.

With Plomin C and oil drilling, Croatia would make a strong move back to the fossil era. The final decisions will be made by the government, which in an election year desperately wants to sign a contract for a large project, but also needs to look like it respects public opinion. If the government and HEP had invested, for over 5 years, time and effort in renewables as in Plomin C, the Croatian energy situation today would be much better, and no one would be considering such hazardous projects.

In light of the recent referendum, opponents of Plomin C and oil drilling have a real chance, but also a real responsibility, to finally kick out fossil fuels from Croatia’s energy vision.

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