Croatia is likely to give up plans to build a new coal-fired unit at the existing Plomin thermal power plant, environment minister Slaven Dobrovic said on February 6.

Plans to build the new unit been widely criticized by environmentalists. However, in the spring of last year, Croatian power utility firm Hrvatska Elektroprivreda (HEP) signed an agreement to hold exclusive negotiations with Japan’s Marubeni for the construction and management of the 500MW Plomin C unit.

"Croatia needs to draw up a new energy strategy. Thus, the existing strategy, prepared in 2009, envisages large plants using imported coal. This hardly fits or doesn't fit at all into the European Union's new energy policy and it is logical to expect that our new energy strategy will abandon such a project," Dobrovic said, according to Hina news agency.

The investment in Plomin-C was estimated at €800mn. The production capacity would be 3.5 terawatt hours annually, meeting 19.4% of Croatia’s demand.

However, environmental organizations and residents of the region where the new plant was planned rejected the project. A referendum organized at the end of March last year showed that 94% of voters were against the project. The referendum was advisory and was not legally binding.

"Our position is that a new energy strategy should be formulated soon, in light of the fact that we have a new European energy policy which is focused on increasing renewable sources, energy efficiency and gas emission reduction, and facilities such as Plomin C cannot fit into it," the minister said.

However, the current agreement with the Japanese company might imply some obligations for the Croatian state. Dobrovic said he did not know how advanced negotiations with Marubeni were and whether there were obligations for the government.

"Possible obligations cannot be compared to damage that would be done if such a block were to be built," the minister said explaining that the Plomin C project was not sustainable either in environmental or economic terms.

Dobrovic’s statements were welcomed by environmentalists.  "If the government abandons the Plomin C project, that will be excellent news both for environmental protection and for the energy sector in Croatia," Bernard Ivcic, the head of Croatia's largest non-government organisation for environmental protection, Green Action, told Hina.

Investments into coal-fired power plants in the Balkans are raising environmental concerns amid the EU’s drive to limit greenhouse gas emissions. In November last year, Bosnian state-run coal mine operator Banovici signed a deal for strategic cooperation with China’s Dongfang Electric Corporation Limited for the construction of the 350MW Banovici thermal power plant project. Also in Bosnia, in May 2013, EFT Group started building the 300 MW Stanari plant, estimated to cost €550mn, produce 2,000 GWh of electricity annually and consume 2.3mn tonnes of coal a year. There are also plans to build new coal-fired power plants in Kosovo and Serbia.