AGP Executive Report

Energy Policy: Croatia’s new electricity rule starts 1 Oct: households using more than 3,000 kWh in the six-month period to 31 Mar 2027 pay a 35% higher charge only on the amount above the threshold—important for electric heating users. Agriculture & Biosecurity: The Agriculture Ministry warns again about grapevine flavescence dorée, urging owners to inspect vines, remove infected plants and control the leafhopper vector; the disease has been confirmed in 14 counties plus Zagreb. Bioeconomy Strategy: Government adopted steps to build a national bioeconomy framework, setting up a coordination body and drafting a 2027–2035 plan with actions for 2027–2030 across agriculture, forestry, fisheries, energy and biotech. EU Budget Talks: Seventeen EU leaders, including Croatia, push Ireland’s presidency to protect farm funding by preserving Cohesion Policy and the CAP against proposed cuts. Maritime & Logistics Tech: Researchers from Zagreb and Osijek use AI to tackle the container relocation problem, aiming to cut costly crane moves in ports. Environment & Tourism: Autumn park pricing kicks in: major national parks like Plitvice and Krka cut entrance fees for October–winter.

Energy & Industry: Croatia’s LNG terminal at Krk could start supplying Germany within two years, with PM Andrej Plenković backing a southern corridor via Slovenia and Austria to unlock Central European gas flows. Transport Infrastructure: Croatia signed on to an Adriatic–Ionian railway corridor linking Italy, Slovenia, Croatia, Bosnia and Herzegovina, Montenegro, Albania and Greece, aiming to boost freight and passenger links through Adriatic ports and cities. EU Budget Politics (Agriculture): Seventeen EU leaders, including Croatia, urged the Irish EU presidency to protect farm funding by preserving the CAP and Cohesion Policy in the 2028–2034 budget, warning cuts would weaken the EU. Environment & Waste: Locals in Gospić fear lasting damage after years of illegal hazardous waste dumping at the former PPK Velebit agro-food complex, as cleanup plans have yet to remove waste. Public Safety/Utilities: Zagreb’s Sljeme cable car will close for three weeks for annual technical inspection, with bus route 140 as the alternative. Maritime Monitoring: Copernicus Marine’s decade report flags concerning, some irreversible changes in Croatian waters, tied to broader Mediterranean warming trends.

Adriatic-Ionian Rail Push: Croatia signed onto a new Italy–Greece railway corridor linking seven countries, with Rijeka, Zadar, Šibenik, Split and Ploče positioned as key Adriatic rail nodes—aimed at boosting freight and passenger connectivity and attracting joint EU planning and investment. Energy Security: Prime Minister Plenković says Croatia’s LNG terminal on Krk could start supplying Germany within two years, but depends on expanding the pipeline links through Slovenia and Austria. Port & Logistics Growth: Rijeka’s Adriatic Gate Container Terminal (ICTSI) hit 4 million TEUs since 2011 after upgrades including new cranes and electrification steps, reinforcing Croatia’s role as a regional gateway. EU Budget Fight for Farmers & Regions: Seventeen EU countries including Croatia signed a letter opposing cuts to cohesion and the CAP, setting up a direct clash with “frugal” states ahead of the 2028–2034 budget talks. Defence Industry Contracts: Croatia says it signed over €200m in defence contracts with domestic firms over the past year as it modernises forces and monitors regional security dynamics. Inflation Watch: Croatia’s September inflation rose to 4.7% year-on-year, driven mainly by energy prices (+20.5%). Local Infrastructure: Zagreb opened a reconstructed six-lane Sarajevska Road southern entrance, with a planned tram line extension next month.

EU Budget Fight: Seventeen EU countries, including Croatia, have signed a letter opposing cuts of nearly €900 billion to farm (CAP) and cohesion funding in the 2028–2034 budget, setting up a direct clash with Germany-led “frugal” demands. Port & Logistics: Croatia’s Adriatic Gate Container Terminal (Rijeka), part of ICTSI, reached 4 million TEUs since 2011, highlighting growing intermodal links to Central and Southeast Europe. Energy & Industry Legal: A Hamburg court denied “Nord Stream” operators’ bid to join the criminal sabotage case as additional prosecutors, pushing their claims toward civil routes. Croatia Economy: Croatia’s inflation accelerated to 4.7% in September, driven mainly by energy prices (+20.5%). Defense/Shipbuilding: Navantia signed MoUs with Croatian firms AITAC and Iskra Shipyard to explore cooperation under the Multi-Role Corvette (MRC) programme. Corporate Finance: Rimac Group appointed Matthias Wich as new CFO.

Macroeconomy & Costs: Croatia’s inflation accelerated to 4.7% year-on-year in September, with energy prices up 20.5% driving the jump; services rose 7.6% while food was nearly flat, and the monthly rate climbed 0.9%—a reminder that household budgets in 2026 are still feeling energy pressure. EU Compliance: The European Commission issued Croatia two reasoned opinions—renewable energy rules not fully transposed and consumer credit directive gaps—giving Zagreb two months to respond or face a potential Court of Justice referral. Automotive Finance: Rimac Group appointed Matthias Wich as its new CFO, tasking him with leading group financial strategy as major programs like Bugatti Rimac and Rimac’s battery, e-axle and stationary storage projects keep moving. Shipbuilding & Defence: Iskra Shipyard and South Korea’s HD Hyundai Heavy Industries signed a teaming agreement for long-term cooperation, including future Croatian Navy corvette work and broader military and civilian shipbuilding. Chemicals & Health: A new European study found PFAS “forever chemicals” in the blood of all 10 Croatian participants, with several above EFSA reference levels—another pressure point for industry and regulators. Energy & Industry: Croatia’s railway push continues with a €900m Dugo Selo–Novska upgrade contract, while Vertiv is expanding manufacturing capacity in the region to support AI infrastructure demand.

Rail Infrastructure: Croatia signed a €900m deal for the biggest-ever HŽ Infrastructure contract: reconstructing and adding a second track on the 83-km Dugo Selo–Novska line, with works planned for about five years and 10 months. Steel Supply Chain Rules: New EU “melt and pour” requirements took effect in Croatia, forcing importers to declare where steel was melted and cast, backed by Mill Test Certificates and other documents. Energy & Sanctions Watch: OFAC authorized MOL to keep negotiating its acquisition of a majority stake in Serbia’s NIS until Oct. 30, with JANAF also receiving an OFAC license to continue transporting oil to NIS. EU Consumer Protection: The European Commission issued a reasoned opinion to Spain (and other states, including Croatia) over delayed transposition of new EU consumer credit rules, including buy-now-pay-later coverage. Textile Industry: Zagreb hosts the IFKT conference on knitting technology, with sessions on materials, high-speed yarn processing and component optimization. Maritime Innovation: PortXL announced its 2026 cohort of 11 maritime startups and scale-ups focused on ports, offshore, energy, logistics and dual-use. Smart Cities Orders: Beam Europe secured about $4m in smart city infrastructure orders across the Balkans, including Croatia. Retail Expansion: Beauty brand rhode expands into Sephora across 19 European markets, including Croatia.

Rail Infrastructure: Croatia is set to sign a near €900m deal for the Dugo Selo–Novska railway upgrade, including 83 km of track works and a second track, with an Indian contractor winning the tender—part of a broader push toward a €6bn rail programme through 2035. Steel Trade Compliance: New EU rules now require Croatian importers to declare the “melt and pour” country of origin for steel, backed by Mill Test Certificates and supporting documents, tightening checks amid concerns over global overcapacity. Public Transport Disruption: Zagreb’s court rulings declared the recent ZET and Zagreb Holding strikes illegal, paving the way for services and waste collection to resume. AI Automation Deal: HCLSoftware plans to acquire Zagreb-based Robotiq.ai to expand AI-driven enterprise automation and agentic execution across complex systems. Smart City & Energy Tech: Beam Europe secured about $4m in Q3 smart city infrastructure orders spanning Serbia, Montenegro, Croatia, Romania, Bosnia and Herzegovina, and Greece. Data Centers Scrutiny: A complaint says the EU is blocking public access to site-level data center energy and water use, as the bloc targets major capacity growth. Tourism Industry: WTTC’s Global Summit in Malta will bring 100+ senior leaders to discuss AI, sustainability, workforce and investment for travel and tourism.

Public Transport: Zagreb’s court ruled the ZET and Zagreb Holding strikes illegal, pushing services and waste collection back toward normal after three days of disruption. AI & Automation: HCLSoftware plans to acquire Zagreb-based Robotiq.ai to boost AI-driven enterprise automation and agentic execution across legacy systems. Digital Infrastructure: A complaint says the EU is limiting public access to data centers’ energy and water use, citing a “wall of silence” and incomplete reporting as AI demand drives expansion. EU Enlargement: The Commission is considering “gradual integration” for accession candidates, offering earlier single-market access, research and industrial cooperation—conditional on alignment and enforcement. Energy & Industry: Croatia’s Rijeka Gateway marked its first year, reporting 370,000+ TEU, faster truck turnaround and new rail links boosting Adriatic freight routes. Retail & Consumer Goods: Beauty brand rhode expands via Sephora into 19 European markets including Croatia. Food & Agriculture: Istria was named the world’s best olive oil region for the 10th time in Flos Olei, reinforcing Croatia’s food-tourism push. Logistics & Construction: Fitout Solutions Design (FSD Group) scales its furniture installation division across Romania, Bulgaria, Hungary, Greece, Italy and Croatia.

Data Center Transparency: A complaint filed with the EU alleges the Commission is blocking public access to how much energy and water individual data centers consume, warning of a “wall of silence” as AI demand grows. EU Single Market Talks: Politico reports the EU is drafting “gradual integration” for candidate countries, offering frictionless trade and research access while applications are assessed. Croatian Transport Disruption: Zagreb’s ZET strike hit a third day, with limited tram and bus lines running and waste collection heavily reduced. Geothermal Boost for Tourism: Bjelovar opened Wellovar, a €42m geothermal sports and recreation complex with 10 pools, including an Olympic 50m facility. Port & Logistics: Rijeka Gateway marked its first year, topping 370,000 TEU and shifting more cargo to rail, with new connections across Central Europe. Construction & Fit-out: FSD Group expands its furniture installation teams across Romania, Bulgaria, Hungary, Greece, Italy and Croatia. Food Industry Modernisation: Moldova starts a meat and dairy plant modernisation programme aligned with EU rules, using Croatian know-how. Retail Expansion: Beauty brand rhode launches in Croatia via Sephora, adding 19 European markets. Energy & Industry Tech: Uber CEO Dara Khosrowshahi tested Rimac’s robotaxi in Zagreb as driverless trials continue. Agriculture Sector Pressure: Romania and four other EU states, including Croatia, asked the Commission for urgent measures for the sheep and goat sector, including vaccination-related rules.

Aviation Manufacturing: FACC opened a €36m expansion of its aircraft cabin interiors plant in Jakovlje, tripling production space and pushing capacity to match a surge in aircraft orders. Rail Infrastructure: Croatia plans about €6bn in railway investment by 2035 to cut speed limits and delays, with 237km still under restrictions. Energy & Industry: Wellovar, a €42m geothermal thermal complex in Bjelovar, officially opened with 10 pools and an Olympic-standard 50m facility, betting on renewable geothermal resources to boost inland tourism. Digital Automation: HCLSoftware announced it will acquire Zagreb-based Robotiq.ai for enterprise RPA, aiming to extend agentic AI from orchestration into reliable task execution for banks, insurers and telecoms. Logistics & Food Supply Chains: The COOL-BORDER Interreg project (about €1.19m) starts in Istria to reduce barriers in chilled and frozen food logistics for SMEs across six countries, including packaging, cold-chain processes and documentation. Geopolitics Affecting Business: Germany urged Slovakia to back EU sanctions on Russia, including ending Russian energy supplies—an issue Slovakia says is hard due to existing infrastructure.

Croatia Rail Upgrade: Croatia plans about €6bn in railway investment by 2035 to cut speed limits and delays, targeting faster passenger services and more double-track capacity. Green Hydrogen at Rijeka: INA is building Croatia’s first commercial green hydrogen plant at the Rijeka refinery, aiming for 1,500 tonnes/year and using power from its own generation. AI Automation Deal: HCLSoftware (HCLTech) will acquire Zagreb-based Robotiq.ai for €9m, boosting enterprise RPA and extending AI agent workflows into real execution. Data Center Manufacturing Push: Vertiv expands its Slovakia campus with ~22,000 sqm of new production space for power and thermal management to serve rising AI infrastructure demand. EU Energy & Industry Pressure: Record diesel prices are squeezing freight costs and hitting farmers and businesses across Europe, raising inflation concerns. Croatia–US Business Links: Croatia and the USA are stepping up cooperation after a New York forum linking energy, food and defence firms with B2B meetings. Tourism Infrastructure: Croatia’s biggest thermal baths, Wellovar in Bjelovar, open to the public soon, adding geothermal pools and major facilities. Nautical Economy: Split hosted the CROYA Yacht Charter Show with ~250 international brokers and Croatian exhibitors, underlining the region’s charter industry pull.

M&A & Automation: HCLSoftware (HCLTech) plans to acquire Croatia-based Robotiq.ai for €9m in cash, aiming to add enterprise RPA execution to its AI agent orchestration; the deal is expected to close by end-November 2026. Energy Prices: Croatia raised the Eurosuper cap by 2 cents to €1.76/l while cutting Eurodiesel by 5 cents to €1.86/l, with “blue diesel” for farmers and fishermen also down to €1.42/l. Retail Compliance: Croatia postponed “anchor price” rules due on 1 October after pushback from retailers and trades, while keeping the consumer information goal. Data Centers: At Vertiv Week 2026 in Zagreb, industry leaders warned EU data center efficiency labeling must be nuanced as AI drives major power and cooling demand. Maritime & Chartering: Split hosted the CROYA Yacht Charter Show, bringing ~250 international brokers and 36 luxury vessels, underlining the nautical sector’s role in tourism and business. EU Energy Market: The European Commission opened infringement letters to 18 EU states, including Croatia, over incomplete rollout of energy-sharing and supplier choice rules. Renewables Region Watch: Western Balkans energy players are gearing up for a push toward 20 GW of new renewables by 2040, with a conference in Budva on Oct. 6-7.

EU Defence Industry: EU ministers named the first five European Defence Projects of Common Interest, covering drones/counter-drones, maritime & seabed defence, space and federated air/missile defence, plus eastern-flank surveillance—aiming for around €190bn in industrial investment ambition by 2036. Energy & Power Balance: Southeast Europe’s wind and solar output fell faster than demand (down 8% week-on-week), with Croatia down 54.3% in variable renewables—pushing systems to rely more on hydro, thermal generation and imports. Croatia Energy Security: Croatia ordered faster gas storage filling to reach at least 85% by October; it ended summer at 73% versus an EU average of 65%. Agriculture Under Drought: Croatia’s agriculture took a major hit from prolonged drought, with spring crops and irrigation constraints hurting yields and revenues. Maritime & Logistics: Liberia and India launched a Global Maritime Security initiative with Croatia among participants, targeting safer shipping routes and seafarer protection. Hydrogen North Adriatic: The Hydrogen Ecosystem North Adriatic is moving toward market deployment, with new cross-border calls and a major conference in November. Trade Watch: The US partially lifted duties on certain Indian aluminium can stock, affecting beverage-can materials. Port Upgrade (BiH): A new crane and rail spur boosted Bosnia’s Brčko river port revenues by 40% in 2026.

Energy & Industry Policy: The European Commission has opened infringement proceedings against Croatia and 17 other EU states over incomplete electricity market rule transposition, while separate action targets 26 countries on hydrogen and decarbonised gas rules—raising pressure on national regulators to speed up market reforms. Local Economy & Business Costs: Croatia’s coffee industry is pushing to abolish a special levy (roasted coffee €0.80/kg; extracts €2.65/kg), arguing it adds financial and administrative burden despite being largely invisible to consumers. Public Transport Disruption: Zagreb is bracing for a strike by ZET and Zagreb Holding workers on Monday, with tram services and school transport at risk after failed talks over collective agreements and pay. Energy Storage Tech: Qnetic has begun low-speed tests of a 200 kWh flywheel storage prototype after 100 zero-fault cycles, aiming for longer-duration, cheaper storage as renewables scale. Defense & Production Resilience: A NATO defense minister warned alliance industry must learn to disperse weapons production before war, using Ukraine’s multi-site approach as a model. EU–Western Balkans Energy Tension: Brussels is concerned US energy firms’ LNG push could lock the Western Balkans into fossil fuel dependence, conflicting with net-zero goals.

Energy & Grid Resilience: Swedish startup ViaEuropa is pushing “smaller grids” in Lund, aiming to make local electricity production and storage cheaper and more secure after Ukraine’s 2022 power-grid shock. Storage Tech: Qnetic began low-speed testing of a 200 kWh flywheel prototype after 100 fault-free charge-discharge cycles, betting on long-duration storage as renewables scale. EU Energy Rules: The European Commission opened infringement cases over incomplete transposition of electricity, hydrogen and gas market rules, including actions against Croatia. Croatia Business & Tax: Croatia’s coffee industry is calling to abolish a €0.80/kg levy on roasted coffee and €2.65/kg on extracts, arguing it adds cost and paperwork. Transport & Labor: Zagreb faces major public transport disruption as ZET and Zagreb Holding unions plan a strike on 28 September. Tourism & Housing: Split is debating a shift away from a hotel/apartment-only model, while inspectors report nearly 500 products sold above permitted prices. Industry Diplomacy: Croatia-US business talks in New York highlighted the long-stalled double taxation agreement as a key barrier to investment.

Energy & Regulation: The European Commission opened infringement proceedings against Croatia (and 17 others) for incomplete electricity market rule transposition, and separately launched hydrogen and gas market cases against 26 EU states including Croatia, giving governments two months to act. Public Transport: Zagreb is bracing for disruption after ZET and Zagreb Holding unions confirmed a strike for Monday, 28 September, starting 3:30am, with tram services and school transport at risk. Tax & Consumer Goods: Croatia’s coffee industry is pushing to abolish a special coffee levy (roasted coffee €0.80/kg; extracts €2.65/kg), arguing it adds cost and paperwork despite being largely invisible to consumers. Retail Price Controls: State inspectors found irregularities in about 26% of price-control checks, with nearly 500 products flagged as too expensive or improperly marked. Tourism Capacity Debate: Split is discussing an alternative accommodation structure beyond hotels and apartments, but private landlords are resisting proposed shifts toward more hotel and campsite capacity. Industry & Energy Infrastructure: INA’s Rijeka refinery has successfully started up its delayed coker unit after the upgrade, enabling heavier residue processing and improving diesel output and supply flexibility. Business Diplomacy: Croatia-US firms met in New York to push investment and cooperation, with the long-awaited Croatia–US double taxation agreement again highlighted as a key blocker.