Oil and Gas

Croatia backs away from plan for new coal-fired power plant

ZAGREB, Feb 6 (Reuters) - Croatia is unlikely to go ahead with plans to build a new coal-fired thermal plant in the northern Adriatic for which it entered partnership talks with Japan’s Marubeni Corp, the environment minister said on Saturday.

“We need a new energy strategy in line with the European Union plans on boosting renewable energy and reduction of carbon dioxide emissions. Such plants don’t fit in,” Slaven Dobrovic said at an energy round-table in Zagreb.

Croatia agreed early last year to begin talks with Marubeni on construction of a new 500-megawatt block at the Plomin thermal plant in the northern Adriatic Istrian peninsula, a project estimated at 800 million euros.

“I don’t know if there are some obligations towards Marubeni, but even if there were, it cannot be compared to the potential damage, economic and environmental, from such a plant,” the minister said.

Croatia’s former centre-left government pressed ahead with the project despite protests by local environmentalists, who advocated the use of natural gas instead of coal.

However, the centre-right government that took office last month has taken a different line. A junior partner of the conservative HDZ party in the ruling alliance, the reformist Most (Croatian for “bridge”) party, said during campaigning that it favoured renewable power.

Economy Minister Tomislav Panenic, who belongs to Most, said on Friday that the construction of thermal plants and drilling for oil in the Adriatic would be temporarily suspended until a new national energy strategy has been devised.

The former government stopped short of signing concession contracts to explore for natural gas and oil in the Adriatic last year, saying it wanted to leave the decision until after the election.

Environmentalists oppose drilling and say it could hit tourism, which accounts for almost 20 percent of gross domestic product. (Reporting by Igor Ilic; Editing by Helen Popper)