State aid: Commission approves €57 million Croatian support for the modernisation of Zagreb’s energy efficient district heating system

The European Commission has approved, under EU State aid rules, Croatian plans to support the modernisation of an energy efficient district heating system in the city of Zagreb, Croatia. The €57 million investment aid will support the modernisation of the hot water network through the replacement of deteriorated pipelines by the beneficiary of the aid, HEP District Heating. The project, which is included in the Partnership Agreement between the Republic of Croatia and the European Commission for the use of EU structural and investment funds, will also be partially financed by EU structural funds. The Commission assessed the measure under EU State aid rules, in particular the Commission’s 2014 Guidelines on State aid for environmental protection and energy. It found that the measure will improve the existing district heating system, which is fed by highly efficient heat production and, thus, environmentally friendly. Furthermore, the measure will lead to significant energy savings, notably by reducing heat losses, water refill losses and network maintenance costs. Furthermore, it will contribute to the implementation of the green European strategy by increasing the energy efficiency and decreasing the emission of harmful and greenhouse gases. In this respect, over its lifetime, the measure is expected to reduce total CO2 emissions by around 280,000 tons. The Commission also found that the measure is necessary and proportionate. On this basis, the Commission concluded that the aid will contribute to the EU’s energy and environmental objectives without unduly distorting competition in the Single Market. More information will be available on the Commission competition website in the public case register under the case number SA.53628.