Croatia is making significant strides in its pursuit of green energy, with 32 green hydrogen projects currently in various stages of development, according to the “Study of the Development Plan and Implementation of the Croatian Hydrogen Strategy by 2050.” The study, commissioned by the Croatian Hydrocarbon Agency, highlights the country’s potential to become a key player in hydrogen production and usage, a move expected to benefit both the national economy and the climate.
Key Strengths and Challenges
Croatia’s strategic position and resources make it well-suited for establishing a hydrogen economy. However, the study points out that while six of the projects are part of the North Adriatic Hydrogen Valley, most of them do not yet form integrated hydrogen ecosystems. Out of the total, only seven projects are designed to both produce and consume hydrogen, with an estimated combined output of 975 tonnes per year. This approach is crucial for mitigating the risks associated with the currently underdeveloped hydrogen market.
Production and Consumption Projections
The study estimates that Croatia’s hydrogen production capacity could reach 33,750 tonnes per year. However, a clear market for this hydrogen is not yet established. In contrast, projects focused on hydrogen consumption are only expected to utilize 382 tonnes per year. Despite this gap, the expected demand growth supports even higher hydrogen production targets. By 2030, the total amount of renewable hydrogen produced and consumed in Croatia is projected to be 26,400 tonnes, with a significant increase to 97,100 tonnes by 2040 and 243,200 tonnes by 2050.
Transport Sector: A Catalyst for Hydrogen Adoption
The transport sector, particularly public transportation in Croatia’s largest urban centers—Zagreb, Split, Osijek, and Rijeka—is identified as the most promising area for hydrogen pilot projects. The study suggests that road transport, and potentially maritime and rail transport, offer the best conditions for early adoption of hydrogen technology.
However, the high costs of renewable hydrogen pose a challenge to maintaining affordable public transport. The study recommends that in the initial stages, reducing the price of renewable hydrogen could be a more straightforward solution than imposing CO2 taxes on fossil fuel alternatives.
Incentivizing Renewable Hydrogen Production
To ensure the successful rollout of hydrogen technology, the study advocates for a new national model to incentivize renewable hydrogen production. This model could be based on the contracts for difference (CfD) approach, similar to those used in renewable electricity production. The proposed model would calculate a premium as the difference between the production cost of renewable hydrogen and its reference market price, with the premium amount expected to range between EUR 3.5 to EUR 5 per kilogram of hydrogen produced.
By 2030, the funds required to incentivize the use of renewable hydrogen in the transport sector alone are estimated to be around EUR 20 million. As CO2 emissions prices rise, the need for these premiums is expected to decrease, making hydrogen a more competitive alternative to fossil fuels.
A Sustainable Future
Croatia’s commitment to green hydrogen through these pilot projects underscores the country’s dedication to sustainable energy. With the right incentives and continued development, Croatia could establish itself as a leader in the hydrogen economy, paving the way for a greener future.
