Charting
Croatia‘s
Blue Economy
Pathways
February 2024
II Charting Croatia‘s Blue Economy Pathways
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1
Charting Croatia‘s Blue Economy Pathways
Table of contents
Abbreviations 4
Acknowledgements 8
Abstract 9
Executive Summary 10
Introduction 18
Scope and Methodology of the Report 19
Questions Which this Report Aims to Address 20
Croatia’s Traditional Maritime Sectors and Economic Contributions at a Glance 20
Maritime Sectors – An Engine For Growth, but are They Sustainable? 22
Chapter 1. The Blue Economy Development Context 24
What is Blue Economy, and Does It Matter? 25
Snippets of the Blue Economy Development Framework for Sustainable Growth of Maritime Space 26
Chapter 2. Maritime Economy, Growth Drivers and Natural Capital 28
Physical Geography and Socioeconomic Profile of Croatia’s Adriatic Coast 30
Coastal and Maritime Economy, Structure and Trends 33
Blue Natural Capital 35
Established Blue Economy Sectors 38
Coastal Tourism 38
Fisheries and Aquaculture 42
Maritime Transport 47
Shipbuilding and Repair 50
Oil and Gas 51
Sea Salt and Inert Materials 53
Emerging Blue Economy Sectors 53
Blue Energy 54
Other Blue Economy Activities for Future Development 55
Innovations, Research and Development 56
Chapter 3. Croatia’s Maritime Space – Threats and Opportunities 57
Natural and Human-Induced Threats to the Adriatic Marine and Coastal Environment 58
Climate Change Vulnerability 58
Municipal Solid Waste 61
Municipal Wastewater 62
Pressures from Tourism Industry 62
Urbanization and Land Use 64
Environmental Health of Coastal and Marine Ecosystems 65
User Conflicts and Synergies 67
Opportunities for Established Blue Economy Sectors 70
Coastal and Marine Tourism 70
Fisheries and Aquaculture 71
Fish Processing Industry 72
2 Charting Croatia‘s Blue Economy Pathways
Shipbuilding and Repair 73
Opportunities for Advancing Blue Economy Transition 74
Chapter 4. Strategies, Policies, and Institutions for Blue Economy Transition 77
Strategic Context for Sustainable EU Maritime Space 78
National Policy Framework for Transition to Blue Economy 81
Marine Spatial Planning 87
Blue Governance, Institutions and Stakeholders 89
Innovation, Research and Development 94
Regional Partnerships: EUSAIR – A Common Maritime Agenda for Blue Economy 99
Chapter 5. Financing Croatia’s Blue Economy Transition 102
Demand for Private Blue Finance 108
Supply of Sustainable Financing 111
Chapter 6. Toward the Blue Economy Pathway 112
Policy Development, Planning, and Institutional Framework 113
Protection of Marine and Coastal Resources 114
Inclusion and Stakeholder Participation in Transitioning to Blue Economy 114
Mobilizing Blue Finance 115
Pathways of Croatia’s Maritime Economy 116
References 120
Annexes 123
Annex 1: Notes on Terms and Definitions Used in The Report 123
Annex 2: Notes on the Approach and Data Used in the Analysis 127
Annex 3: Economic Profiles of Adriatic Counties of Croatia 128
Annex 4: Outline of the Blue Economy Governance Framework 131
Annex 5. List of National Policies Harmonized with EU 135
Annex 6. State of the Environment and Pressures in the Adriatic Marine Environment –
Measuring Selected GES 139
Annex 7. SWOT Analysis of Established Maritime Sectors 142
LIST OF FIGURES
Figure 1. Overview of Important Maritime Sectors in Croatia 21
Figure 2. Blue Economy Development Framework 26
Figure 3. GDP in Adriatic Croatia 2000-2020 31
Figure 4. Adriatic Croatia GDP Per Capita (2000–2020) 32
Figure 5. Exports, Imports, Net Exports of Economic Sectors* in the Adriatic Croatia in 2022 (€’000) 32
Figure 6. Share of Adriatic Economy in The National Gva of Croatia, Per Sectors in 2000 and 2020 (%) 33
Figure 7. GVA Per Sector in The Adriatic Economy During 2000–2020 (€, Thousands) 34
Figure 8. Seasonal Changes of Accommodation and Food Service Activities in Croatia
and Adriatic Countries 35
Figure 9. Nature Protected Areas in Croatia 36
Figure 10. Natura 2000 Sites in Croatia 36
Figure 11. Tourist Arrivals in Commercial Accommodation Establishments in Adriatic Croatia,
2005–2022 39
Figure 12. Tourism Density: Number of Nights in an Area Unit (km2) and Tourism Density Rate (Number
of Overnight Stays Per Diem in an Area Unit (km2)) in Adriatic Croatia and Croatia, 2005–2022 39
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Charting Croatia‘s Blue Economy Pathways
Figure 13. Income Generated by Croatian Nautical Ports Excluding VAT, 2005–2022 41
Figure 14. Cruising Statistics in Croatian Coast, 2013–2022 42
Figure 15. Fishing Areas in the Croatian Adriatic Maritime Space 44
Figure 16. Mariculture Production (Value €, Thousands) and Tons 46
Main Commercial Species Exported and % of Total Exports in 2021, €, Millions
Figure 17.
(Nominal Value) 47
Figure 18. Seawater and Coastal Transport: Passengers (in Thousands) and Goods (Tons, Thousands) 49
Figure 19. Floating LNG Terminal on Island Krk 51
Figure 20. Natural Gas Production Projections Estimates by 2050 52
Figure 21. Hydrocarbons’ Exploitation Map in Adriatic Croatia (MESD) 53
Figure 22. Blue Economy Emerging Sectors in the Mediterranean Basin 54
Figure 23. Municipal Waste per Inhabitant in Adriatic Croatia 61
Figure 24. Housing Units Versus Households by Counties in 2011 and 2021 65
Figure 25. Adequacy of Assessment of GES by Croatia (Mediterranean Adriatic Region) with
Criteria Set Out in Article 9 of the Commission GES Decision (Based on 2018 Reporting) 66
Figure 26. Trends of Coastal Tourism: Turnover, GVA, and Personnel Cost Per Person Employed
(2009 and 2019) 70
Figure 27. SWOT Analysis of the Blue Economy of Croatia 74
Figure 28. Environmental Taxes by Sources 104
Figure 29. Environmental Investments Per Capita in EU 105
Figure 30. Structure of Total General Government Expenditure on Environment by Functional
Classification (2021) 106
LIST OF TABLES
Table 1. National and Nature Parks in Croatia That Include Marine Areas 36
Table 2. Capacity of Nautical Ports and Employment in 2021 and 2022 41
Table 3. Fleet Characteristics of Active Vessels by Fishing Activity in 2021 43
Table 4. Total Cargo Volume in Tons, Thousands, in 2021 48
Table 5. Gross Domestic Expenditure on R&D, by Sectors and Types of Expenditures, 2021 56
Table 6. Croatia’s Wastewater Treatment Plants 2022 62
Table 7. Updated documents of Marine Environment and Coastal Zone Management Strategy 66
Table 8. Croatia’s Alignment with International and Regional Commitments 79
Table 9. Core Strategies and Legislation of the Republic of Croatia Relevant to Blue Economy 83
Table 10. Targets for Increasing the Supply of RES 84
Table 11. R&D Stakeholders in Existing BE Sectors 97
Table 12. Blue Economy Priority Areas for Innovation 99
Table 13. EUSAR Strategic Pillars, Challenges, and Opportunities 101
Table 14. Blue Finance Eligible Private Sector Investments 110
Table 15. Croatia’s Maritime Economy: Development Pathways 117
LIST OF BOXES
Box 1. Croatia’s Adriatic Coast (Source: Kružić, Povh Škugor, 2015; CBS) 30
Box 2. Croatia: Blue Economy Stakeholder Consultations – Focus Group Discussions 75
Box 3. Core Body of EU Strategies and Policies Relevant to Blue Growth 80
Box 4. Zadar County Spatial Plan 88
Box 5. Blue Governance (University of Portsmouth, UK) 89
Box 6. Blue Governance in Seychelles 89
Box 7. Croatia Case: Jabuka Pomo Pit Fisheries Management 91
Box 8. Blue Finance at a Glance 107
4 Charting Croatia‘s Blue Economy Pathways
Abbreviations
BAU Business as Usual
BE Blue Economy
BEDF Blue Economy Development Framework
BESF Blue Economy Sustainability Framework
BFT Blue Fin Tuna
CBD Convention on Biological Diversity
CBS Croatian Bureau of Statistics (Central Bureau of Statistics)
CCI Clean Coast Index
CFP Common Fisheries Policy
CGT Compensated Gross Tonnage
CMR Center for Marine Research
COP Conference of Parties
CRS Croatian Registry of Shipping
DFN Drift and/or Fixed Netters
DIVA Dynamic Interactive Vulnerability Assessment
DRB Dredgers
DTS Demersal Seiners/Trawlers
EBRD European Bank for Reconstruction and Development
EBSA Ecologically or Biologically Significant Marine Area
EC European Commission
EC EMFF European Commission European Maritime and Fisheries Fund
ECAP Ecosystem Approach to the Management of Human Activities
EEZ Exclusive Economic Zone
EGD European Green Deal
ESG Environmental, Social and Governance
ETS Emissions Trading System
EU European Union
EUMOFA European Market Observatory for Fisheries and Aquaculture
EUNETMAR European Networking Group for Maritime Policy
EUSAIR EU Strategy for the Adriatic-Ionian Region
EWG Eurogroup Working Group
FGD Focus Group Discussion
FLAG Fisheries Local Action Group
FRA Fisheries Restricted Area
FTE Full-Time Employment
GDP Gross Domestic Product
GES Good Environmental Status
GFCM General Fisheries Commission for the Mediterranean
GHG Greenhouse Gas
GNI Gross National Income
GVA Gross Value Added
HDI Human Development Index
HOK Vessels Using Hooks
HTZ Croatian Tourist Board (Hrvatska turistička zajednica)
ICCAT International Commission for the Conservation of Atlantic Tunas
ICMA International Capital Markets Association
ICT Information and Communication Technology
ICZM Integrated Coastal Zone Management
IFC International Finance Corporation
IMDG International Maritime Dangerous Goods
IMO International Maritime Organization
IT Information Technology
IUCN International Union for Conservation of Nature
LAU Local administrative unit
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Charting Croatia‘s Blue Economy Pathways
LNG Liquefied Natural Gas
LOA Length Overall
LSF Large-Scale Fleet
LSI Land-Sea Interaction
MAP Mediterranean Action Plan
MARPOL International Convention for the Prevention of Pollution from Ships
MCSD Mediterranean Commission for Sustainable Development
MESD Ministry of Economy and Sustainable Development
MPA Marine Protected Area
MPPCSA Ministry of Physical Planning, Construction and State Assets
MRDEUF Ministry of Regional Development and EU Funds
MSFD Marine Strategy Framework Directive
MSP Marine Spatial Planning
MSPD Marine Spatial Planning Directive
MSW Municipal Solid Waste
NACE Nomenclature of Economic Activities (European statistical classification of economic activities)
NAPNAV National Project of Irrigation and Land and Water Management in the Republic of Croatia
NECP National Energy and Climate Plan
NGO Nongovernmental Organization
NLRAP National Loss Reduction Action Plan
NPRR National Plan for Recovery and Resilience
NSDP National Spatial Development Plan
OECD Organization for Economic Co-operation and Development
OG Official Gazette
OIEH Project of the Association of Renewable Energy Sources of Croatia
PPA Physical Planning Act
PS Purse Seiner
PV Photovoltaic
R&D Research and Development
RBD River Basin District
REMPEC Regional Action Centre for the Prevention of Sudden Pollution in the Mediterranean, Malta
RES Renewable Energy Source
SBE Sustainable Blue Economy
SDG Sustainable Development Goals
SME Small and Medium – size Enterprise
SOLAS International Convention for the Safety of Life at Sea
SRIA Strategic Research and Innovation Agenda
SSCF Small-scale Coastal Fleet
STD Sustainable Tourism Development
SWOT Strengths, Weaknesses, Opportunities, and Threats
TBT Tributyltin
UN United Nations
UNCLOS United Nations Convention on the Law of the Sea
UNDP United Nations Development Program
UNEP United Nations Environment Programme
UNESCO United Nations Educational, Scientific and Cultural Organization
UNFCCC United Nations Framework Convention on Climate Change
UWWTD Urban Wastewater Treatment Directive
VAT Value Added Tax
VMS Vehicle Monitoring System
WBG World Bank Group
WFD Water Framework Directive
WSS Water Supply and Sanitation
WTTC World Travel and Tourism Council
WWF World Wildlife Fund
WWT Wastewater Treatment
YLL Years of Life Lost
6 Charting Croatia‘s Blue Economy Pathways
© Benan Berhan
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Charting Croatia‘s Blue Economy Pathways
8 Charting Croatia‘s Blue Economy Pathways
Acknowledgments
T
he team is grateful to all government officials from the Republic of Croatia, the Ministry of
Economy and Sustainable Development Ministry of Tourism, Ministry of Agriculture, Ministry of
Transport and Sea, and other organizations consulted in Croatia for the insights and generous
cooperation provided to the team.
The Report titled “Charting Croatia’s Blue Economy Pathways” was prepared by a World Bank Group
core team led by Bérengère Prince, Lead Natural Resources Management Specialist, Eolina Milova,
Sr. Environmental Specialist, and Maja Murisic, Sr. Environmental Specialist. The project team comprised
Adriana Damianova, Policy and Operations Advisor, Pawan Patil, Sr. Environmental Economist, Ivica
Trumbic, Consultant, Walter Ludvig Seitz, Sr. Investment Officer, and Ante Dodig, Investment Officer,
and Mathias Shabanaj Jankila, Research Analyst. The background analysis and sectorial overviews were
prepared by a scientific team of the University of Split, the Faculty of Economics, Business and Tourism, led
by Professor Maja Fredotovic and Assistant Professor Slađana Pavlinović Mršić. The legal and institutional
background review was prepared by Jasmina Bjegović. The team benefited from the insights of World
Bank peer reviewers Peter Kristensen, Raimund Mar, Pablo Andres Salas Bravo, and Stjepan Gabric and
the guidance received from the Croatia country team led by Jehan Arulpragasam, Country Manager and
Josip Funda, Country Economist. Many of the country office staff provided timely and effective hands-on
assistance. The overall management support during inception and preparation of the Report was provided
by Kseniya Lvovsky and Sanjay Srivastava, Practice Managers in succession.
The contributions of all others not mentioned by name are gratefully acknowledged.
9
Charting Croatia‘s Blue Economy Pathways
Abstract
W
ith an accessible and attractive coastline of untouched natural splendor, Adriatic Croatia is a
strategic driver of national economic development. It boasts rich cultural heritage and biodi-
versity and abundant coastal and marine resources providing the country with high socioeco-
nomic value. A decade of strong growth of maritime tourism has fueled stable economic development in
the coastal zone. Despite this progress, Adriatic Croatia faces multiple environmental challenges stem-
ming from anthropogenic pressures and climate change. Negative impacts from over-tourism, urban-
ization, and pollution underline the urgency of adopting a sustainable maritime economy approach. The
demographic decline and the lack of economic diversification could diminish future economic opportu-
nities of Adriatic Croatia to grow sustainably and provide new jobs. The emerging challenges call for close
attention in the context of the national development goals, sustainable development commitments and
Croatia’s aspiration to achieve blue growth. This report discusses the concept of blue economy while trying
to understand and define the impacts of current challenges on the Republic of Croatia’s transition to blue
economy.
10 Charting Croatia‘s Blue Economy Pathways
Executive Summary
Executive Summary
What is ‘Blue Economy’ and Why is it Important for Croatia?
Blue economy (BE) is a concept referring to the economically, socially, and environmentally
sustainable use and development of marine resources. The term ‘blue economy’ has been actively
promoted internationally by the European Union (EU) through its Blue Growth Strategy1 and the
Integrated Maritime Policy2. As defined by the World Bank, “the Blue Economy concept seeks to promote
economic growth, social inclusion, and the preservation or improvement of livelihoods while at the same
time ensuring environmental sustainability of the oceans and coastal areas.” Blue economic development
is not only dependent on governments but emphasizes the sustained and active engagement of all
stakeholders at all levels of government, regional and international actors, civil society, and the private
sector.
The blue economy provides countries with an avenue for sustainability and inclusive socioeconomic
development of the coastal and maritime space. In 2019, together with the European Commission, the
World Bank launched the Blue Economy Development Framework (BEDF). The BEDF is a tool for countries
to aid them in identifying the challenges, opportunities, and priority investments for the sustainable use
of marine natural capital. The BEDF seeks to shift the focus from growth to the sustainable use of natural
capital in how the blue economy approach values non-market goods and services provided by oceans,
aiming to break sectoral silos and invest in innovative blue economy sectors. The BEDF has three key
pillars: (a) knowledge management; (b) governance, fiscal reforms, and public investments that help
create an enabling environment for sustainable private sector growth (de-risking growth); and (c) the
promotion of private investment, all underpinned by several key cross-cutting considerations. The BEDF
also aims to integrate blue economy principles into governance principles, fostering ‘Blue governance’
that seeks to enhance accountability, equity, inclusiveness, and stakeholder engagement in decision-
making.
Croatia’s coastline and maritime territory are key national assets vital to the country’s economy.
Croatia’s rugged coastline of breathtaking landscapes and more than 1,200 islands stretch along 6,000
km of stunning natural beauty with towering rocks and cliffs, beautiful archipelagos, and scenic roads.
Over one-third of the Croatian population is concentrated on the Adriatic Coast, with the marine
economic sector supporting the livelihoods of over 160,000 people. These maritime jobs are a vital part
of Croatia’s economy, representing 8 percent of the national gross value added (GVA) in 2019, which is
the highest contribution to the national economy in any EU country.3
The ecosystem of the Adriatic Sea is under growing stress from anthropogenic pressures,
potentially eroding the natural capital that can fuel sustainable growth. Stressors stem from a range
of man-made factors such as overfishing, marine pollution, and wastewater, which are occurring due to
urbanization of the coast and the large tourism sector. Climate change is exacerbating these issues. It is
estimated that in Croatia the environmental degradation accounts for 2–3 percent of the annual gross
domestic product (GDP), costing around €21 million annually in damage to marine ecosystems, with a
significant part of negative impacts stemming from the tourism sector.
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ttps://www.europeanfiles.eu/wp-content/uploads/2017/06/The-European-Files-Blue-Growth-Strategy-June-2017-Issue-47.pdf.
1 h
2 https://www.europarl.europa.eu/factsheets/en/sheet/121/integrated-maritime-policy-of-the-european-union.
European Commission 2022. The EU Blue Economy Report 2022. Luxembourg: Publications Office of the European Union.
3
https://data.europa.eu/doi/10.2771/793264.
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Charting Croatia‘s Blue Economy Pathways
Executive Summary
The Croatian maritime space offers vast opportunities for sustainable growth, but change is needed
to put development on a sustainable growth path in line with EU strategies. All the current growth
sectors entail medium- to long-term externalities that degrade the environment. Hence, Croatia needs
to explore new sustainable growth solutions for reversing current trends and protecting the coastal and
marine ecosystems. This report aims to inform policy makers and stakeholders of sustainable maritime
opportunities by examining the established and potential maritime sectors in Croatia, identifying their
challenges, analyzing the policy environment, and charting the pathways for becoming a sustainable
blue economy in line with the EU Blue Economy Strategy.
Socioeconomic Profile of Adriatic Croatia and Established Blue Economy
Sectors
Economic growth in Adriatic Croatia has remained stable, despite recent demographic concerns.
In 2000–2020, the GDP of the coastal counties of Croatia has grown steadily. However, GDP per capita
remained below the national average, standing at 89 percent of national GDP figures. These counties
are challenged by demographic decline due to outmigration, with their population being 8 percent
lower than in 2011. The declining population is due to overall aging trends in the country and a lack
of job security. This stems from the seasonality of the tourism sector and the lack of employment in
other sectors. At the same time, some counties are facing rapid urbanization. While in the 1960s, only
an estimated 150 km of coastline was urbanized, in 2012 urbanization had spread to over 837 km of the
coastline.
The economy of coastal Croatia is shifting toward service industries, but the share of coastal
economy in the total GVA of Croatia remains relatively stable at around 30 percent. The fastest
growing economic sectors in Adriatic Croatia (2000–2020) are construction (271 percent) and real estate
(189 percent), both fueled by the growing wholesale and retail trade, transportation and storage, growing
tourism accommodations and vacation homes, and food services sector (190 percent in 2000–2019).
While this shift toward services has driven economic growth, it also exposes the coastal economy to
global market fluctuations that can greatly affect the maritime economy of Croatia. Rapidly growing
tourism also exposes the economy to potential challenges, including environmental and climate change
impacts on marine ecosystems threatening the base of tourism and exacerbating the stressors on water,
waste, and wastewater systems.
The established maritime economic sectors in Croatia are tourism, fisheries and aquaculture,
maritime transport, shipbuilding and repair, and oil and gas. Traditionally, the tourism sector has
dominated the country’s maritime economy accounting for 22 percent of Croatia’s annual GDP. Other
notable maritime sectors include shipping, marine transport, port services, fishing and aquaculture, and
oil/gas extraction, among others. Several of these sectors have been driven by the growth of tourism,
notably maritime transport and port services. Other sectors, such as oil and gas, and shipbuilding,
remain regionally concentrated, with shipbuilding and repair concentrated on niche markets in Europe
(and beyond). Yet, the non-tourist sectors are smaller, responsible for only 2 percent of total employment
in Croatia in 2019.4
Croatia could fully benefit from the abundant Adriatic natural resources by exploring more economic
opportunities beyond the established maritime sectors. Croatia has untapped opportunities in the
development of blue energy sectors. This includes increasing the use of offshore wind, marine biomass,
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4 h
According to EU BE report established BE sectors in Croatia contributed to national employment with 9.9 percent. Within this number, 7.9 percent
was related to coastal tourism.
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12 Charting Croatia‘s Blue Economy Pathways
Executive Summary
marine thermal energy, and salient gradient energy. ‘Blue energy’ has received increasing interest in the
EU member countries. However, for deployment of blue energy technologies more work is needed to
remove the implementation barriers and to assess the relative economic potential of these technologies
in the context of Croatia. Other promising opportunities are in the development of farmed seafood,
including the production of seafood with low carbon footprint. To ascertain the feasibility of offshore
technologies, Croatia may augment scientific research on policy and technical solutions with increased
spending on research and development (R&D). Croatia’s R&D spending is below the EU average and is
predominantly focused on basic research. Currently, business sector investment in R&D is only 10 percent
of the EU average and needs be boosted to act as an enabler for the new economic opportunities in
maritime space.
National and Regional Policy Framework for the Transition to Blue Economy
Croatia has aligned the national legislation and policies with EU policies, especially on environmental
protection and conservation of marine ecosystems. In this respect, the key national documents are
the Maritime Development and Integrated Maritime Policy Strategy, Agriculture and Fisheries Strategy,
the 2030 Sustainable Tourism Strategy, The Nature Protection Strategy and Action Plan of the Republic
of Croatia for 2017–2025, and the Transport Development Strategy, all of which prioritize environmental
protection and broadly sustainable development in the maritime sector. Croatia has also developed
well-functioning monitoring systems and regulations for ship-generated waste, wastewater treatment,
and spatial planning to support sustainable maritime practices. Although several policies aligned with
the Marine Strategy Framework Directive (MSFD) are well developed, a single national integrated Marine
Spatial Plan is yet to be finalized. Still, more policy effort is needed for Croatia to align and implement all
EU directives on maritime and water.
Croatia’s climate-related strategies including ‘Low Carbon Development Strategy 2030–2050’,
‘Energy Development Strategy 2030–2050’, ‘Integrated National Energy and Climate Plan’, and
‘Climate Change Adaptation Strategy’ are well positioned to contribute to the country’s transition
to blue economy. The Climate Change Adaptation Strategy focuses on climate adaptation measures
for reducing the vulnerability of key sectors—water resources, agriculture, forestry, fisheries, biodiversity,
energy, tourism, and health—and two cross-cutting thematic areas—spatial planning and risk
management. Croatia has made commitments to reach net-zero carbon emissions by 2050 and has
joined the Global Methane Pledge.
Croatia is actively engaged in the European Union Strategy for the Adriatic-Ionian Region
(EUSAIR). EUSAIR unites nine coastal neighboring nations with a common aim of promoting blue
growth, regional connectivity, environmental sustainability, and sustainable tourism in the region. On
June 1, 2023, Croatia took over the presidency of EUSAIR until June 2024. As a regional leader, Croatia’s
efforts focus on enhancing research, innovation, and business opportunities in blue economy sectors;
bolstering sustainable seafood production and consumption; and strengthening the governance of
regional seas’ basins. The sustainable blue economy approach proposed by the European Commission
in 2020 aligns with EUSAIR’s goals, reflecting a commitment to greener and more inclusive recovery.
The act of Croatia’s legal recognition of its Exclusive Economic Zone plays a pivotal role in advancing
these objectives.
Threats to and Opportunities for Croatia’s Maritime Economy
Current economic achievements and prospects of developing blue economy sectors will be under
increasing pressures and user conflicts from maritime and land-based activity causing deterioration
of ecosystems and the environment. Croatia is also vulnerable to climate change and extreme weather
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Charting Croatia‘s Blue Economy Pathways
Executive Summary
events. The Mediterranean climate is characterized by hot and dry summers and mild and rainy winters.
Climate change is altering the traditional weather patterns, which is affecting groundwater resources,
rainfall, and sea levels. Water demands increase due to large influx of tourists in the summers and are
further exacerbated by the climate pressures reducing the water flows. Many coastal communities lack
adequate infrastructure for managing municipal wastewater and solid waste, which during the tourist
season increases the pressures on the coastal environment. Lack of infrastructure, climate change
impacts, and unsustainable tourist density need to be addressed to enable other maritime sectors to
grow.
There are several sectors foundational to the blue economy where new sustainable blue growth
opportunities could be explored further:
oastal and Marine Tourism: This sector is well established within Croatia and as such provides
■ C
a favorable climate for further development through existing human capital, attractive natural
environments, tourist resources, and proximity to EU markets. However, the sector needs to be
deconcentrated from the few coastal cities/destinations. More infrastructure investments are needed
to address current challenges and make it sustainable. Actions and public sector investment could
leverage EU funding as a potential source. Integration into the regional market value chains and more
regional cooperation and development could help diversify the tourist supply.
isheries and Aquaculture: This sector aligns closely with EU policies and is recognized to be well
■ F
regulated. Wider application of good management practices in mariculture (shell and small-scale
demersal) would increase the sustainability footprint of this segment. The segment of tuna farming
has a long tradition in Croatia and has established sales markets in the EU and Japan. For the sector
to grow further, there is a need to address the sector’s low economic sustainability and overfishing,
and to improve data collection and monitoring. Opportunities in this field relate to the synergies with
tourism and innovative technologies to decrease operating costs through public investments and EU
funds.
ish Processing: Within this sector, challenges are the low number of value-added products, a weak
■ F
product portfolio, and the lack of producer organizations. With investments into innovation and novel
techniques (such as online sales), the diversification of domestic market chains, and closer links with
the tourism and hospitality industry, this sector could grow exponentially in Croatia.
■
Shipbuilding: A traditional and important sector in Croatia that has seen a decline in recent years due
to global competition, especially from East Asian shipyards. This sector will require large public support
to bolster itself, both in terms of innovation clusters, funding for startups and small and medium
enterprises (SMEs), and investments in education and infrastructure enabling implementation of
innovations. Closer collaboration between emerging market segments such as maritime surveillance,
the fishing industry, and the military sector, coupled with increased R&D collaboration could steer the
growth of this sector.
Toward Sustainable Maritime Sector and Transition to Blue Economy
Investments are the enabler for realizing the economic opportunities of the blue economy transition,
crucial to moving toward a sustainable maritime economy. Funding must be directed for general
development, but also for ‘Blue Finance’, meaning projects and programs that have positive impacts
on the maritime economy. As such, financing is needed within three distinct categories: (a) financing
targeting general economic development; (b) projects that meet sustainable financing objectives such
as those in the EU Sustainability Taxonomy and EU Sustainability Reporting Standards; and (c) financing
to specifically target the quality and availability of water resources.
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14 Charting Croatia‘s Blue Economy Pathways
Executive Summary
The Croatian financial market made some progress in general sustainable financing. However, the
supply of sustainable financing is still at an early stage, with no financial intermediaries or companies
currently offering Blue Finance Bonds. Across the economy, firms are subject to fluctuations in demand,
prices, and other externalities, which creates uncertainties and makes it difficult for firms to secure
financing. Traditional investors are often hesitant to explore other blue economy sectors beyond tourism
due to perceived risks and the lack of collateral. The lack of reliable market information is another challenge
for firms to identify investment opportunities and assess the risks of unsustainable growth. Croatia can
use the financial markets to improve the sustainability of the economy, help economic diversification,
and spur innovation. The impact of adopting sustainable policies by financial intermediaries could be
significant. Nonetheless, it remains at the credit institutions’ discretion to assess whether imposing blue
finance use limitations and reporting requirements will be in their interest. Recognizing the benefits
of strengthening the blue financing framework could advance the implementation of blue economy
pathways in view of results achieved over time.
Financing for the blue economy in Croatia must be mobilized for a broad category of sectors and
will require a combination of public and private finance. The investment needs of Croatia in Blue
Finance-eligible sectors total €7.5 billion, of which €3.0 billion needs to be private-sector funded. The
primary areas in need of funding are water supply and sanitation and seafood value chain investments
(tourism is not considered a part of Blue Finance). For water supply and sanitation, Croatia requires
approximately €7.0 billion to meet its obligations under EU Water Directives, with €2.6 billion yet to be
funded through public financing. Meanwhile, the seafood value chain needs €0.5 billion in investments,
with €0.27 billion sought from the private sector. These investments are required for improving water
management, reducing non-revenue water losses, and enhancing the seafood sector in Croatia to move
toward the blue economy while aligning with Sustainable Development Goals (SDGs) 6 and 14.
Demographic decline and the lack of economic diversification may diminish the economic
opportunities of Adriatic counties to grow sustainably and provide jobs. The economy of Adriatic
Croatia is heavily concentrated in coastal tourism, with most jobs being in or related to coastal tourism.
This high concentration increases the fragility of the country’s economy, as it becomes more susceptible
to global economic shocks and the potential of being outcompeted by other tourist destinations.
Continuing unsustainable development trends and practices could undermine the value of Croatia’s
ample natural capital, limit opportunities for future economic diversification, and ultimately
undermine the socioeconomic outcomes. Standing at a crossroads, Croatia’s transition toward blue
economy will be determined by three distinct directions and future policy choices. This report has
identified the business-as-usual (BAU) course, which is a continuum of current trajectories based on
growth inhibited by potential user conflicts and competition for economic space and marine resources.
The two pathways which represent a shift from BAU will lead to different outcomes: (a) reduced
environmental pressures and risks through higher level of compliance with EU environmental directives
and (b) reduced pressure on the natural capital and transition of maritime economy onto sustainable
blue economy based on sector synergies and integration of cross-sectoral development objectives.
The Business-as-Usual
The BAU course is characterized by the current development patterns continuing and culminating
in increased environmental degradation and declining economic opportunities. This course
entails further harmonization of national policies with the EU acquis, however, is marred by lagging
implementation, lack of capacity and resources, and fragmented institutional responsibilities.
Ineffectiveness in pollution prevention and control to adhere to water quality regulation persist, the
marine spatial planning (MSP) remains fragmented, and there is little monitoring of solid waste.
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15
Charting Croatia‘s Blue Economy Pathways
Executive Summary
Sector policies remain disconnected. The expansion of built-up areas in coastal counties and the
rise in uninhabited housing units continues. Environmental quality in urban areas worsens, leading
to ecosystem losses. Wastewater from nautical activities continues to rise, as does the air pollution
from large cruise ships, harming the coastal environment. Competition over marine and coastal
resources intensifies, coastal Croatia experiences limited socioeconomic benefits, and a sustainable
blue economy is not achieved.
Toward Environmental Sustainability
The path leading toward Environmental Sustainability is an interim course with a horizon of about
five years that reflects a higher degree of compliance with EU directives. It is characterized by the
development of a National Blue Economy Strategy and a Roadmap. MSP is improved and expanded
to cover the entire coastal area, and environmental monitoring sees enhancements. Major urban
agglomerations in Adriatic Croatia develop investment plans for wastewater treatment plants, and
beach water quality along the entire coast meets the highest standard. Although this scenario sees
progress, there are socioeconomic challenges that remain, including unsustainable urban expansion
and limited wastewater treatment. Sector environmental impacts are being addressed gradually. Still,
this path can serve as a stepping-stone toward a blue economy transition.
Taking the Blue Economy Path
The blue economy path has a longer-term implementation horizon and signifies a major shift
toward a holistic, integrated approach to management of marine natural capital, which replaces
previous individual sectoral foci. Critical policy barriers are addressed while blue sector governance is
promoted to improve accountability and transparency. This path includes a blue economy strategy which
is implemented and checked with regular updates, full MSP adoption, and full sustainable ecosystem
management. Effective coordination and integration of BEDF and national blue economy goals occur
through interinstitutional mechanisms and cooperation across regional, national, and local levels.
Research and development inform the blue economy policies and are a driver for the development of
new economic sectors to benefit the coastal populations and Croatia as a whole. Urbanization growth
is curbed and sustainable spatial planning and traffic solutions are developed to ease urbanization
pressures along the coast. Resource competition is eased and new blue economy projects are actively
pursued through private and public blue finance mobilization. Finally, EU funding opportunities are
harnessed to support the transition to a sustainable blue economy in Croatia by addressing investment
needs.
Choosing the blue economy path will chart new avenues for the country’s economic development,
but concrete action is needed to move away from the current unsustainable patterns in the maritime
space. With a clear vision, integrated policies, and strategic investments, Croatia has the potential to
harmonize economic prosperity with environmental stewardship and develop itself into a thriving maritime
nation. By seizing blue economy opportunities while simultaneously addressing the environmental
challenges, Croatia can lead the way in demonstrating that a sustainable blue economy is not just an
aspiration but an achievable reality and set an example for EUSAIR and the wider EU region to follow.
Croatia could consider three priority blue governance areas for actions while charting the Blue
Economy Vision and Roadmap. These are summarized in the following table:
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16 Charting Croatia‘s Blue Economy Pathways
Executive Summary
Pillar Priority Action Potential Lead
Institution
Institutional Short and Establish blue economy institutional structures Ministry of
medium term that promote cross-sectoral coordination at the Economy and
horizontal and vertical axis of the government Sustainable
at a sectoral/national-subnational level to ensure Development
policy harmonization with relevant EU directives. (MESD)
Create and implement campaigns for raising the MESD
awareness of the blue economy in the private
sector, civil society, and public sector.
Design comprehensive data management MESD
and monitoring systems for blue economy
management and reporting.
Develop and systematically apply various MESD
education/information tools to increase
awareness of the importance of the environment
and ecosystem services at a sectoral/national-
subnational level and with all stakeholders
Long term Strengthen the capacities of the institutions and MESD
stakeholders involved in the blue economy.
Increase the active and responsible participation MESD
of the public in the implementation and planning
of the blue economy.
Strengthen and improve control mechanisms for State Inspectorate
the blue economy.
Policies Short and Finalize policy harmonization with EU MESD
medium term environmental acquis for the protection of marine
resources and assets, including marine protected
areas (MPAs).
Develop a blue economy strategy and roadmap MESD
mainstreaming sustainability and economic
diversification with a clear vision, sectoral actions,
and indicators to monitor implementation.
Carry out an assessment of marine ecosystem MESD
services and develop capacity for their monitoring
Improve the physical planning process and Ministry of
implement MSP and Integrated Coastal Zone Construction,
Management tools. Spatial Planning
and State Property
Map the competences needed to work in blue Ministry of Science
economy sectors and potential supporting and Education
institutions and develop strategies to meet skill
needs.
Operationalize the Sustainable Tourism Ministry of Tourism
Development Strategy specifically focusing
on the sustainability dimension and reducing
pressure on marine and coastal resources.
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17
Charting Croatia‘s Blue Economy Pathways
Executive Summary
Pillar Priority Action Potential Lead
Institution
Long term Harmonize national development strategies and MESD
sectoral plans (resource, sectoral, and territorial
management) with the blue economy strategy
and roadmap.
Support and facilitate the development and MESD and the
application of innovation and R&D in the blue Ministry of Region-
economy in both public and private sectors. al Development
and European
Union Funds
Improve existing educational programs at a Ministry of Science
sectoral/national-subnational level and develop and Education
schemes of education for new blue economy
skills and competences within a lifelong
education system.
Financial Short and Improve the investment climate and mobilize MESD
medium term financing for the development of the blue
economy and needed maritime support
infrastructure.
Cooperate with civil society and the private MESD
sector to discuss fundamentals for natural capital
valuation and ocean accounting to support blue
economy monitoring and reporting.
Improve databases, data management, and data MESD
collection in terms of accuracy, and develop open-
source data access for the private sector and
civil society for research, financing, and business
development purposes.
Develop disclosure requirements for eligible blue Ministry of Finance
finance projects and capacity for continuous and the Central
reporting and disclosure in accordance with Bank of Croatia
international standards.
Identify priority projects and develop a project MESD
pipeline for financing the development of the
blue economy.
Develop new financing mechanisms to support Ministry of Finance
the development of the blue economy, such as
blue bonds.
Enable counties, cities, and municipalities to Ministry of Finance
support specific blue economy activities in their
administrative units.
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18 Charting Croatia‘s Blue Economy Pathways
Introduction
Introduction
© Benan contents
Berhan
19
Charting Croatia‘s Blue Economy Pathways
Introduction
Scope and Methodology standing data imitations, many of the findings re-
garding development trends and challenges are
of the Report
relevant for the coastal areas as well. The discus-
The Report presents an overview of the mari- sion on policy issues has benefitted from a series
time sectors and emphasizes the importance of consultations with public and private stakehold-
of integrated ecosystems approach in policy ers from various sectors of the blue economy.
decisions supporting the development of blue
The Report is organized in six chapters. Each
economy (BE) sectors. The development objec-
chapter following the Introduction starts with key
tive of this Report is to inform Croatia’s vision and
takeaway points followed by a narrative summa-
strategy/roadmap for transitioning to blue econo-
rizing the main areas and results of the analyses.
my by identifying the challenges and opportuni-
The Introduction describes the objective, meth-
ties for shaping a development framework based
odology, and key points which the Report aims to
on a holistic ecosystem approach to management
highlight including basic information of Croatia’s
of coastal and marine resources. While the blue
maritime sectors. Chapter 1 elaborates on the con-
economy concept is not new to Croatia, the Re-
text for the discussion on Croatia’s blue economy
port aims to shift the attention on the reflection
and understanding of the challenges to sustain- by highlighting the key elements of the blue econ-
ability in the blue space. The approach to the anal- omy concept embraced by international organiza-
ysis presented in the report is critical pragmatism tions. Chapter 2 discusses the physical geography,
and solutions based on the experience from other socioeconomic context of Croatia’s coastal and
countries striving to transition to blue economy. maritime space, including details of established
The recommendations, however, are aligned with blue economy sectors such as tourism, shipbuild-
Croatia’s aspiration for sustainable development ing, fishery and aquaculture, maritime transport,
and coherence with the blue economy paradigm oil and gas, and mineral extraction. This chapter
of the European Union (EU). At the same time, the also elaborates on the prospects for development
report aims to highlight avenues for striking a bal- of emerging maritime sectors and for strength-
ance between the economic pursuits and protec- ening the role of science and research to support
tion of the natural assets emphasizing the sustain- Croatia’s blue economy. Chapter 3 is key for under-
ability pathways to the blue economy. standing the threats and opportunities ahead and
drivers of the blue economy sectors to steer tran-
The Report is informed by a set of background
sition to sustainable growth and makes specific
analyzes including (a) a legal and institutional re-
recommendations for addressing environmental
view aiming to assist policy makers in better un-
health issues and user conflicts while building on
derstanding the respective roles and responsibili-
ties of institutions engaged in managing activities synergies. Chapter 4 presents an overview of the
in the maritime space and (b) a country-based strategic, policy/legal, and institutional framework
analysis of the socioeconomic profile of Croatia’s underpinning Croatia’s transition to blue economy.
maritime sectors, issues, challenges, and alterna- Chapter 5 highlights the opportunities for inno-
tives, carried out by a team of researchers from the vative blue financing and avenues for mobilizing
University of Split, Faculty of Economic, Business public resources for leveraging private finance to
and Tourism that helped to enrich the scope of address critical environmental issues through in-
the analysis. Further, the Report was informed by frastructure investments. Chapter 6 concludes the
a study of the World Bank Group (WBG) used for discussion by focusing on high potential areas that
the discussion on financing of the blue economy Croatia could act upon to ensure a smooth transi-
transition. Other publicly available sources and lit- tion to sustainable blue development in the Adriat-
erature pertinent to the topics under review have ic coast. The business as usual and two progressive
been used. The data used for the analysis relate to pathways which Croatia could pursue to achieve
an area known as the Adriatic Croatia5 available its blue economy aspirations are discussed in
at the level of local administrative units. Notwith- chapter 6.
__________________________
Adriatic Croatia, statistical NUTS2 (Nomenclature of Territorial Units for Statistics) unit is defined according to the EU territorial standards.
5
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20 Charting Croatia‘s Blue Economy Pathways
Introduction
Questions Which this Report menclature of Economic Activities (NACE). More
information on the methodology and data is pre-
Aims to Address
sented in Annex 2.
Croatia has already begun the transition to-
ward greater environmental sustainability in
the maritime space following the EU sustain- Croatia’s Traditional Maritime
able blue growth approach. To accelerate the
Sectors and Economic
transition from the current development path
to sustainable development of the marine and Contributions at a Glance
coastal areas, Croatia will need to consider the The Adriatic Sea is strategically important for
current gaps in the national framework govern- the economy of the Republic of Croatia. Safe-
ing the maritime economy and cross-sectoral guarding the natural values of the Adriatic ma-
coordination. The key questions central to this rine resources for economic growth and improved
pathway going forward which are discussed in livelihoods and jobs is central to the country’s
this Report are as follow: sustainability agenda. This Report examines the
■ H
ow can established and emerging sectors established maritime sectors which traditional-
in the maritime space define Croatia’s path- ly contribute to the economy of Croatia and the
ways toward sustainable growth? The pro- emerging opportunities to overcome current
found conceptual change in the governance of challenges and steer these sectors onto a sustain-
the maritime space calls for policies, legal, in- able path. The report aims to support policy mak-
stitutional, and governance frameworks, to ful- ers and stakeholders in the quest for sustainable
ly introduce and operate a new model of mar- development in the maritime and coastal space
itime and marine governance in line with the of Croatia and in line with the EU Blue economy
EU Integrated Maritime Policy Framework and strategy. The discussion in the Report takes ad-
considering climate threats. This also includes vantage of the views of numerous stakeholders,
a closer look at the solutions that take advan- both from public and private sectors, and their
tage of available financing, promoting ‘green’ valuable insights on the challenges, policies, and
growth in the blue space. opportunities ahead.
■ H
ow to steer the country’s substantial eco- Croatia’s coastline and maritime territory are
nomic potential in marine and coastal areas key national assets. Croatia’s waters cover an
optimally by improving the blue economy area of 31,500 km2 — one-third of the national ter-
governance framework? With population ritory. The country’s coast is more than 6,000 km
changes, shifts in economic activity, demand long, hosts 1,200 islands, rocks, and reefs (Kružić
and allocation of coastal and maritime resourc- and Povh Škugor 2015, 7) and is among the most
es, and negative impacts on their quality, the valuable parts of its national territory. The Adriatic
transformation of the natural capital base could Sea region is a unique and sensitive marine eco-
undermine Croatia’s future development pros- system, especially because of the wealth of its bi-
pects. What is the promising alternative that ological life, clarity, transparency, and landscape.
could mitigate tensions between users of the Appropriately, it has gained the status of a special
blue space, protect marine ecosystems, and en- Mediterranean subregion. The Adriatic coast of
sure sustainability? Croatia is characterized by a high level of biologi-
cal diversity, including many endemic species, and
Certain data limitations stem from accessing especially sensitive habitats and ecosystems. The
data sources in a relatively short time; pertinent region is also important for the country’s econo-
administrative procedures limited the availabil- my and rich cultural and social life.
ity of more recent data. The authors had to rely
on published data that do not provide insights Croatia’s coastal region is rich in cultural heri-
into individual economic activities, whereas sector tage. Situated at the crossroads of ancient Greek
data was defined by the first aggregation of No- and Roman civilizations, Croatia is home to mul-
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21
Charting Croatia‘s Blue Economy Pathways
Introduction
tiple medieval landmarks and more recent his- One-third of Croatia’s population lives along the
torical sites. Six monuments on the Adriatic coast, and the coastal and marine sectors in 2019
coast have been recognized by the United Na- employed 160,000 persons (10 percent of national
tions Educational, Scientific, and Cultural Orga- jobs) and generates around €3.6 billion in gross
nization (UNESCO) for their cultural significance: value added (GVA), which represented 8 percent
the Old Town of Dubrovnik, Trogir, the Euphra- of the national GVA and is the highest relative
sian Basilica in Poreč, the Cathedral of St. James contribution to the national economy of all EU
in Šibenik, Diocletian’s Palace in Split, and the countries (BE Report 2022). The tourism sector
Stari Grad Plain in Hvar. Additionally, there are is well developed along the entire coast with a
many other heritage landmarks, such as the Vela
few destinations that have a significant concen-
Spila in Vela Luka on the island of Korčula, the
tration of tourism activities. The coastal tourism
Church of St. Donat in Zadar, and the Church of
sector alone contributed to approximately 18
St. Euphemia in Rovinj.
percent of Croatia’s annual gross domestic prod-
The Adriatic coast and maritime space con- uct (GDP) during 2000–2021, except during the
tribute significantly to the national economy. COVID-19 period.
Figure 1. Overview of Important Maritime Sectors in Croatia
Maritime Sectors in Croatia
Maritime Tourism Maritime Transport
9.5% of GDP in 2022.
■ 1 erry services are high
■ F
growth due to link with
9,121.8 million of revenue in 2022,
■ € tourism.
but in a slight decline.
eographical position in the Adriatic Sea
■ G
oncentrated in a few destinations
■ C provides high economic potential for shipping.
(e.g., Dubrovnik).
Shipbuilding Oil and Gas
■ In decline, but key national sector. ccurs in the Northern Adriatic.
■ O
ncludes new ships, repair,
■ I 0 operative gas platforms, and
■ 2
conversion, and offshore 230km of gas pipeline at sea
construction. bottom.
ncertain future due to financial
■ U uture plans: New LNG terminal
■ F
severe financial distress. and 28 hydrocarbon exploration areas.
Fisheries and Aquaculture
■ Estimated employment of 20.000 widespread across Croatia.
■ Direct production and related services exceed 1% of GDP.
■ Share of fishery production in aquaculture only 20%, but high growth potential.
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22 Charting Croatia‘s Blue Economy Pathways
Introduction
Maritime Sectors – An Engine for sustainable growth of Croatia’s maritime econo-
my. This would require minimizing the adverse
Growth, but Are They Sustainable? pressures on the very natural capital on which
Croatia’s coastal and marine resources have the maritime economic output, jobs, and growth
potential to support sustained economic growth. depend.
If sustainably developed, they could define a new Demographic trends indicate an increasing
era of economic opportunity for the country. Ac- urbanization of Adriatic Croatia. Compared to
cording to the Organization for Economic Co-op- other parts of the country the coastal areas offer
eration and Development (OECD 2016)6, many more economic opportunities and have higher
ocean-based industries have the potential to out- population density. Population movements from
perform the annual growth of the global econ- islands and the hinterland to the coastal strip re-
omy, thereby boosting employment. The same sulted in intensive urbanization and high popula-
report projects that over the next 15 years through tion density in the coastal counties. The highest
2035, the ocean economy could more than double density is recorded in Split-Dalmatia County (93
its economic contribution to GVA, or GDP equiva- inhabitants per km2); counties of Primorje-Gorski
lent. The rich maritime natural resources base that kotar (74), Istria (69), and Dubrovnik-Neretva (55)
currently provides a significant contribution to are above the Adriatic Croatia average (53), while
Croatia’s recurrent economic value can claim its the central part of the coast—Zadar (44) and
identity for improving human well-being and so- Šibenik-Knin (32) counties have lower population
cial equity while also increasing environmentally density. At the end, there is Lika-Senj County, the
sustainable economic opportunities. largest one in terms of surface, and the lowest
Realizing the economic opportunities of mar- in terms of population and density (in Croatia as
itime space will be important and challenging well).8
at the same time. So are the two parallel trends Croatia has yet to cultivate and optimize its
occurring in Croatia: an upward growth within substantial economic potential of the blue and
the maritime economy (in terms of GVA and em- coastal space. Croatia’s maritime area comprises
ployment) and the growing pollution pressures ‘internal waters and the territorial sea, air space
that erode the natural capital on which economic above them and the respective seabed and sub-
growth is dependent and are further exacerbated
soil’ as defined by the Croatian national law9. In
by climate change. The Adriatic Sea, as part of the
February 2021, the Exclusive Economic Zone of the
larger Mediterranean region is under pressure due
Republic of Croatia in the Adriatic Sea (EEZ) was
to a range of man-made factors including over-
declared by the Croatian Parliament following the
fishing, pollution (effluents, plastics, and other
United Nations Convention on the Law of the Sea
solid waste) from the industrialization of the tour-
(UNCLOS) and the Maritime Code. The current
ism sector and urbanization of the coast, and the
range of economic sectors are limited to conven-
climate change induced sea temperature rise and
tional sectors such as tourism, fisheries, and aqua-
acidification, among other factors.
culture, and to a more limited extent, shipping,
The cost of environmental degradation in Cro- and port activities—all generating medium- and
atia is estimated at 2–3 percent of annual GDP,7 long-term externalities such as pollution, dam-
with a significant share of the negative impact aging the marine ecosystems. Such an effect on
linked to solid waste generated from tourism. the marine environment is likely to slow the eco-
However, the potential of tourism for economic nomic output and growth over time. While the
advancement is significant, provided there are blue economy in 2019 contributed 9.9 percent to
systematic national planning efforts (includ- the national economy in terms of jobs, blue econ-
ing enabling policy and greater investment) for omy jobs decreased 10 percent compared to 2009,
__________________________
ECD (2016), The Ocean Economy in 2030, OECD Publishing, Paris, https://doi.org/10.1787/9789264251724-en.
6 O
orld Bank. 2021. “Croatia: Cost of Environmental Degradation.” https://documents.worldbank.org/en/publication/documents-reports/document-
7 W
detail/929211613036393029/croatia-cost-of-environmental-degradation.
roatian Bureau of Statistics (CBS). Population Census 2021.
8 C
aritime Code of the Republic of Croatia (OG 181/2004, 76/2007, 146/2008, 61/2011, 56/2013, 26/2015, 17/2019).
9 M
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23
Charting Croatia‘s Blue Economy Pathways
Introduction
increasing only in the fisheries/aquaculture and all industries are of equal importance. Accommo-
maritime transport sectors. Marine oil and gas and dation and food service provide employment for
shipbuilding have lost a significant number of jobs 58 percent in the winter months rising to 67 per-
compared to 2009 (98 percent and 54 percent, re- cent of the Croatian employment for that industry
spectively).10 in August. In the summer months in Adriatic Croa-
The employment rate in Croatia is one of the tia, the number of employed in that industry rises
lowest in the EU: 69.7 percent in the age group by 64 percent and changes order by becoming the
20–64 (2022) compared to EU27 average of 74.6 major employer on the Adriatic coast12. The total
percent. The employment rate of women was also employment in Croatia shows seasonal oscillation
lower—65 percent compared to the EU27 average due to accommodation and food service activities,
of 69.3 percent11. Counties on the Adriatic coast but most of the seasonal change in employment is
make up 33 percent of total employment, but not generated on the coast.
© Benan Berhan
__________________________
10 EC (European Commission). 2022. The EU Blue Economy Report 2022.
11 EUROSTAT. Employment and Unemployment (LFS) Database.
12 CBS.
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24 Charting Croatia‘s Blue Economy Pathways
Chapter 1
Chapter 1.
The Blue Economy
Development
Context
contents
© Benan Berhan
25
Charting Croatia‘s Blue Economy Pathways
Chapter 1
Key takeaways
■ Sustainable use of ocean/marine resources for economic growth, improved livelihoods, and jobs while pre-
serving the health of marine ecosystems are central to the blue economy concept. It offers a framework for
realizing Croatia’s transition to environmentally sustainable maritime economy with clear socioeconomic
and ecosystem benefits. The Blue Economy Development Framework (BEDF) translates these principles
into a tool for defining blue economy opportunities, constraints, and priority investments, adaptable to
country-specific conditions.
■ Timely transition to a sustainable maritime economy is an opportunity to address the economic, environ-
mental, and climate challenges in Adriatic Croatia, to improve the stewardship of natural capital, and to
diversify the maritime sector.
■ Charting the blue economy in Croatia, with an emphasis on strengthened governance, has the potential
to bring an array of nationwide benefits from enhanced protection of coastal and nearshore resources, in-
creased resource use efficiency, and improved livelihoods of communities in Adriatic Croatia.
What is Blue Economy, development and establishing coordinated and
transparent decision-making processes in the EU’s
and Does It Matter? sectoral policies on seas and marine activities, in-
The ‘blue economy’ has emerged as an umbrel- cluding via its sea-basin and macro-regional strat-
la term related to the development of oceanic egies. Consequently, the EU’s blue growth strategy
and maritime economic activities in an integrat- (EC 2012) has identified five innovative, high-poten-
ed and sustainable way. According to the World tial maritime sectors—blue energy, aquaculture,
Bank, “the Blue Economy concept seeks to promote coastal and maritime tourism, blue biotechnology,
economic growth, social inclusion, and the preser- and sea-bed mining—where great opportunities
vation or improvement of livelihoods while at the exist for exploitation by expanding industries in a
same time ensuring environmental sustainability sustainable way.
of the oceans and coastal areas” (World Bank13 and In December 2019, the European Commission
United Nations14). It emphasizes that ‘blue’ econom- (EC) adopted a new growth strategy based
ic development depends not only on governments on the notion of decarbonization and sustain-
but also on the active and sustained engagement ability by announcing the European Green Deal
of all stakeholders, including national, regional, (EGD) for the EU and its citizens (EC 2019b). The
multilateral, and international organizations, the EGD package of measures suggests a success-
public and private sectors, civil society, and other ful “transition towards digital, knowledge-based,
relevant participants, as well as the effective man- decarbonized and more circular industry in Eu-
agement of knowledge. rope,” thus aiming to make Europe the first cli-
The EU has been particularly active in promot- mate-neutral continent by 2050 to improve the
ing economic growth based on the sustainable health of the planet, economy, and people. This
use of oceans and seas (blue growth). The EU In- means, for instance, that fossil-intensive maritime
tegrated Maritime Policy15 (EC 2007) builds on the industries must decarbonize to keep their licens-
notion of the interconnectedness of industries and es to grow. Conversely, the blue economy is seen
human activities centered on the sea. It promotes as a critical enabling vector for achieving the EGD
a holistic approach to all sea-related policies with objectives, including in mitigating and adapting
a view to supporting sustainable sea and ocean to climate change.
__________________________
ttps://openknowledge.worldbank.org/bitstream/handle/10986/26843/115545.pdf?sequence=1&isAllowed=y 1.
13 h
United Nations Development Programme. 2018. Blue Economy: Community Solutions. UNDP, New York.
14
https://www.europarl.europa.eu/factsheets/en/sheet/121/the-integrated-maritime-policy; https://www.europarl.europa.eu/erpl-app-public/fact-
15
sheets/pdf/en/FTU_3.3.8.pdf.
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26 Charting Croatia‘s Blue Economy Pathways
Chapter 1
Snippets of the Blue Economy over time and aims to reduce the negative outputs,
such as pollution and marine litter, that undermine
Development Framework
the quality of the ocean’s natural capital. The BEDF
for Sustainable Growth promotes a multisectoral, integrated, and participa-
of Maritime Space tory approach to coastal and marine development
In 2019, the World Bank and the EC launched the at multiple levels. Central to the framework are (a)
Blue Economy Development Framework (BEDF) knowledge management; (b) governance, fiscal re-
promoting a holistic view of the ocean economy forms, and public investments that help create an
and maritime ecosystems in policy design (Figure enabling environment for sustainable private sector
2). The entry point of the framework is economic growth (de-risking growth); and (c) the promotion of
development that is attuned to the changes in the private investment, all underpinned by a number of
flow of blue natural capital as inputs to the economy key cross-cutting considerations.
Figure 2. Blue Economy Development Framework
Integrated Spatial and Participatory Approach to Territorial Development
efine priorities with stakeholders
■ D
gree trade-offs
■ A
evelop future ‘Vision‘ for ocean space
■ D
KNOWLEDGE GOVERNANCE, FOSTERING PRIVATE
MANAGEMENT FISCAL REFORMS INVESTMENT
FOR DE-RISKING Identify potential
■
ses and activities
■ U
■ D
istribution and ■ I
dentify pathways investor opportunities
Rank sectors based
■
status of marine to prosperity in
on their potential
resources seascape investability Adopt Blue
alue of ecosystem
■ V ssess and reform
■ A finance principles
goods and services economic/fiscal policy Identify new sources of
■
■ E
xisting governance (Blue PEIR) private capital
arrangements dentify public
■ I
hreats, gaps,
■ T investments and
synergies spending to sustain a
blue economy.
Gender
Climate
Change
Diagnostic Strategic
Analysis Blue Economy Roadmap
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27
Charting Croatia‘s Blue Economy Pathways
Chapter 1
The World Bank, similar to the EU, defines the ity, equity and inclusiveness, empowerment, and
blue economy as the “sustainable use of ocean/ broad-based participation. The transition to a blue
marine resources for economic growth, improved economy in Croatia, with an emphasis on strength-
livelihoods, and jobs while preserving the health ened governance, has the potential to bring an ar-
of ocean ecosystem.” The BEDF translated these ray of benefits related to the enhanced protection
principles into a tool for aiding countries in the de- of coastal and nearshore resources and increased
velopment of a systematic and scalable approach to resource use efficiency, improving the livelihoods of
defining a country’s blue economy opportunities, local communities.
constraints, and priority investments, adaptable
The blue economy concept shifts the develop-
to the blue economy development paradigm and
ment paradigm from a sole focus on growth to
country-specific conditions. Marine spatial plan-
sustainable use of natural capital based on green
ning (MSP) is an essential BEDF instrument which
economy principles. By doing so, it could potentially
helps national authorities in the blue economy tran-
drive a transformative change and address the un-
sition by creating a framework for evidence-based
derestimated value of natural capital. The tradition-
and inclusive maritime spatial plans. It can also help
al method of using GDP to measure outputs in the
assess the future spatial needs of maritime sectors,
ocean economy does not account for the changes to
including of the emerging blue economy sectors.
natural stocks and future benefit streams that they
The other features of BEDF are facilitating knowl-
provide. Conversely, economic valuation methods
edge transfer from research to business, promoting
that measure the value of blue assets overcome this
technology innovations and skills development in
limitation by measuring the contributions of non-
the labor force to apply the new technologies, pro-
market goods and services provided by the natural
ducing better and more relevant data and informa-
systems. By measuring the value of blue assets, the
tion, and developing initiatives that facilitate and
blue econ0omy approach overcomes the challenge
streamline investments, including risk funding for
of using them as a ‘free good’ and seas and oceans
innovative maritime technologies.
as a cost-free repository space. This in turn means
‘Blue governance’ is defined as the formal and in- (a) shifting current economic planning trends that
formal processes of collective decision-making, negatively affect the quality of coastal and marine
planning, deliberating, and capacity building by resources and livelihoods, (b) investing in the human
government, market, and civil society actors con- capital required to harness employment and de-
nected to marine and coastal environments. Blue velopment benefits, (c) investing in innovative blue
governance integrates blue economy with gover- economy sectors, and (d) adequately valuing the
nance principles and encompasses structures and marine resources and ecosystem services provided
processes that are designed to ensure accountabil- by the oceans to break the silos of isolated sectoral
ity, transparency, responsiveness, rule of law, stabil- management and investments.
© Benan Berhan
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28 Charting Croatia‘s Blue Economy Pathways
Chapter 2
Chapter 2.
Maritime Economy,
Growth Drivers,
and Natural Capital
contents
Berhan
© Benan
29
Charting Croatia‘s Blue Economy Pathways
Chapter 2
Key takeaways
■ The Croatian maritime economy is a key contributor to the overall economy and employment of Croatia,
with several well-established maritime sectors, accounting for 30 percent of national GVA. Established blue
economy sectors include maritime transport, shipbuilding, fisheries and aquaculture, oil and gas, and coast-
al tourism.
■ Croatia’s coastal and marine ecosystems play a fundamental role in determining the economic outputs. At
the same time the coastline is facing rapid urbanization. While in the 1960s, only an estimated 150 km of the
coastline was urbanized, in 2012 more than 837 km of the Croatian coastline had been urbanized.
■ The maritime sectors support the livelihoods of 160,000 people in Croatia (10 percent of national jobs), with
coastal tourism accounting for 79 percent of all jobs and 81 percent of all GVA in the sector, further under-
scoring the importance of the maritime sector in Croatia.
■ The GDP of the coastal counties of Croatia has grown steadily. However, this growth remained below the
national average, standing at 89 percent of the national GDP per capita. The aggregate employment of the
Adriatic counties comprises 33 percent of the total employment but not all industries contribute equally.
■ Tourism dominates the coastal economy of Croatia, and coastal tourism accounts for more than 95 percent
of total tourism numbers in Croatia. Tourism accounts for around 20 percent of Croatia’s annual GDP, in-
dicating that the economy of Adriatic Croatia is shifting toward the service industry. Croatia is among the
leading tourist countries in the world recording 19.5 million visitors and 91 million overnight stays in 2019 (pre-
COVID-19 numbers), and 17.5 million visitors and 90 million overnight stays in 2021. Nonetheless, Croatia’s
tourist traffic remains seasonal and concentrated in the summer months. Despite the positive economic
results, the tourism in Adriatic Croatia may face future challenges potentially constraining its long-term
sustainability and performance.
■ The direct share of fisheries in the GDP of Croatia ranges between 0.2 percent and 0.7 percent. The sector’s
real contribution seems underrated as the direct economic contribution of the fisheries, fish farming and
processing, with accompanying activities exceeds 1 percent of GDP annually. Croatia has aligned its fish-
ery policies with the principles of the new General Fisheries Commission for the Mediterranean (GFCM)
2030 Strategy and has adopted temporal and spatial restrictions for catches of certain species during their
spawning periods.
■ Marine aquaculture is a traditional segment of the fisheries industry in coastal Croatia. It will remain as
such, thus contributing to higher level of environmental protection, quality food supply, employment, and
economic growth. Croatia is among the EU member states where the value of fish exports exceeds imports
with prospects for further growth of mariculture exports.
■ Croatia’s maritime port infrastructure is well developed. However, almost every Croatian port except Rijeka
face infrastructure problems which relate to accessibility of ports and effective use of space.
■ The shipbuilding sector is economically and socially important for the local and regional economy but will
need investments for green transition.
■ Croatia made considerable strides to improve the performance outcomes in the maritime sector. Exploring
further the full economic potential of the blue economy could go beyond the existing maritime sectors to
take advantage of the untapped economic potential in the emerging blue economy sectors.
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30 Charting Croatia‘s Blue Economy Pathways
Chapter 2
Physical Geography to achieving sustainable economic growth in the
Adriatic coastal areas.
and Socioeconomic Profile
of Croatia’s Adriatic Coast The downward demographic trend is accompa-
nied by growing coastal urbanization. In search
Croatia has the second-longest coastline in of better jobs and living conditions, people move
the Mediterranean region (Duplančić Leder et from islands and the hinterland to the coast. Sourc-
al. 2004). The population in the Adriatic coast is es estimate that in the 1960s only 150 km of coast-
1,298,522 which is 33.54 percent of the total popula- line was urbanized while in 2012 the urbanized area
tion of Croatia (2021 census). Compared to 2011, the stretched over 837 km of the coastline. Coastal de-
population decreased by 8 percent (113,413 people). velopments and new construction for second resi-
The highest decrease of 16.1 percent was recorded dences and weekend houses or tourist apartments
in the County of Lika-Senj. This downward trend are growing. The Regional Development Strategy
is consistent with the overall demographic trends of the Republic of Croatia 2014–202016 identifies the
in Croatia. The studies showed that the reason be- urban areas in the coast as follows: urban agglom-
hind this is the aging population, declining birth erations—Split and Rijeka; larger urban areas—Pula,
rates, and fewer women of reproductive age, high Zadar, Šibenik, Dubrovnik; smaller urban areas—
unemployment, job insecurity, and negative mi- Rovinj, Pazin, Gospić, Knin, Makarska, Metković. The
gration after Croatia joined the EU in 2013 [Čipin, 2021 population census indicates that 38 percent of
Klempić Bogadi, & Međimurec, (2017); Šterc, (2018); the total population lives in the coastal county cen-
Boromisa, i dr., (2017); Čipin, Zeman, & Međimurec, ters—in counties of Zadar and Šibenik-Knin 44 per-
(2017); Komušanac, (2017); Kozić, i dr., (2020)]. Pop- cent and Primorje-gorski kotar 41 percent.
ulation in the retirement age in the coastal areas According to the United Nations Development
has increased by almost 20 percent compared to Program (UNDP), Croatia’s Human Development
2011, which is higher than the average for Croatia Index (HDI)17 in 2021 was 0.858; that classifies as
(14.58 percent). Furthermore, the 2021 census indi- ‘very high human development category’. While
cates an outflow of younger population and an in- it is above the global HDI, it is still lower than those
flow of older populations. Negative demographic of Germany, Austria, or Ireland (countries of emigra-
trends could pose significant challenges in future tion).
Box 1. Croatia’s Adriatic Coast
Adriatic Croatia Total Percentage
Surface land (km ) 2
24,705 43.65 (of total land surface)
Surface-sea (km2) 31,479 39.91 (of total)
County Surface Population Population No of
(km²) density LAUS
(pop /km²)
Istria 2.813 195.237 69,41 41
Primorje- Gorski kotar 3.588 265.419 73,97 36
Lika-Senj 5.353 42.748 7,99 12
Zadar 3.646 159.766 43,82 34
Šibenik-Knin 2.984 96.381 32,30 20
Split- Dalmatia 4.540 423.407 93,26 55
Dubrovnik - Neretva 1.781 115.564 64,89 22
ADRIATIC CROATIA 24.705 1.298.522 52,56 220
Source: Kružić, Povh Škugor, 2015; CBS
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https://razvoj.gov.hr/UserDocsImages/O%20ministarstvu/Regionalni%20razvoj/razvojne%20strategije/Strategija%20regionalnog%20razvoja%20Re-
16
publike%20Hrvatske%20za%20razdoblje%20do%20kraja%202020._HS.pdf
HDR21-22_Statistical_Annex_HDI_Table.xlsx (live.com)
17
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31
Charting Croatia‘s Blue Economy Pathways
Chapter 2
Since 2013, when Croatia joined the EU, the na- counties, and the coastline in particular, are facing
tional economy has been growing on a stable rapid urbanization. Contrary to that, rural areas re-
path, despite the demographic concerns. During main poorly inhabited (due to migration to coast-
2000–2020, the GDP growth of coastal counties of line).
Croatia has also stabilized at about 32 percent of
national GDP. Among the coastal counties, the The GDP per capita varies by county based on
highest GDP was attained in Split-Dalmatia Coun- the population numbers and density. The highest
ty, Primorje-Gorski kotar, and Istria. Taken alto- GDP per capita was posted by Istria (€16,000), fol-
gether, they make over 70 percent of the total GDP lowed by Primorje-Gorski kotar (€13,590) and Du-
generated by Adriatic Croatia. brovnik-Neretva (€10,714), all of which were above
the national average. The most populated county
The coastal counties posted a demographic the Split-Dalmatia County has lower GDP per cap-
decline reflecting the national trends charac- ita than the average for Adriatic Croatia. However,
terized by decreasing numbers of working-age the level of GDP per capita in Adriatic Croatia is still
population, decreasing young people in relation below the national average, standing at 89 percent
to elderly, as well as migration. The population
of national GDP per capita (Figures 3 and 4).
of coastal counties in 2021 declined by 8 percent
compared to 2011. At the same time, the coastal
Figure 3. GDP in Adriatic Croatia 2000-2020
20 000 000 33
18 000 000 32,5
16 000 000 32
14 000 000
31,5
12 000 000
31
10 000 000
30,5
8 000 000
30
6 000 000
29,5
4 000 000
2 000 000 29
0 28,5
Primorje-Gorski kotar Šibenik-Knin Dubrovnik-Neretva
Lika-Senj Split-Dalmatia Share of AC in CRO GDP
Zadar Istria
Source: Croatian Bureau of Statistics (CBS).
In 2022, the value of Croatian exports was €23.9 bil- Looking forward, virtually every facet of the econ-
lion and that of the imports €41.6 billion (at fixed omy of Adriatic Croatia will be touched by the op-
exchange rate of HRK 7.5345 = €118). The Adriatic re- portunities linked to blue growth. The local admin-
gion contributed to 13 percent of the national ex- istrative units (LAUs) would have to identify those
ports and 11 percent of imports. The value of net ex- opportunities while taking advantage of and build-
port of the region reached €1.5 billion in 2022. ing upon the regional strengths, natural assets, and
marine industry.
__________________________
Croatia entered the Eurozone in 2023; according to the EU Council Regulation 2022/1208 of July 12, 2022, conversion rate was set at HRK 7,53450 per
18
€1, with effect from January 1, 2023 (https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32022R1208&from=EN).
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32 Charting Croatia‘s Blue Economy Pathways
Chapter 2
Figure 4. Adriatic Croatia GDP Per Capita (2000–2020)
18 000
16 000
14 000
12 000
10 000
8 000
6 000
4 000
2 000
0
Republic of Croatia Split-Dalmatia Lika-Senj
Šibenik-Knin Primorje-Gorski kotar Dubrovnik-Neretva
Adriatic Croatia Istria Zadar
Source: CBS.
Figure 5. Exports, Imports, Net Exports of Economic Sectors* in the Adriatic Croatia in 2022 (€’000)
Export Import Net export
Source: CBS 2022.
Note: * A – Agriculture, forestry and fishing; B – Mining and quarrying; C – Manufacturing; D – Electricity, gas, steam and air condi-
tioning supply; E – Water supply; sewerage, waste management and remediation activities; F – Construction; G – Wholesale and
retail trade; repair of motor vehicles and motorcycles; H – Transportation and storage; I – Accommodation and food service activities;
J – Information and communication; K – Financial and insurance activities; L – Real estate activities; M – Professional, scientific and
technical activities; N -Administrative and support service activities; O – Public administration and defense; compulsory social secu-
rity; P – Education; Q – Human health and social work activities; R – Arts, entertainment and recreation; S – Other service activities;
X – Unclassified.
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33
Charting Croatia‘s Blue Economy Pathways
Chapter 2
Coastal and Maritime Economy, related to tourism and the tendency to acquire a
second residence. While this shift toward services
Structure and Trends
has driven economic growth, it also exposes the
The economy of Adriatic Croatia is shifting to- coastal economy to global market fluctuations that
ward the service industry, but the share of the can greatly affect not only the economy of Adriatic
coastal economy in the total GVA of Croatia re- Croatia (particularly BE sectors), but the economy
mains relatively stable at around 30 percent of of Croatia as a whole. Rapid growth of tourism and
the national GVA (2020). More precisely in 2000– tourism-related sectors (transport, construction,
2020 the fastest growing economic sectors in Adri- food production) could also expose the economy
atic Croatia were construction (271 percent) and to potential environmental pressures and climate
real estate (189 percent), both fueled by the grow- change impacts on marine ecosystems threaten-
ing wholesale and retail trade, transportation and ing the very base of tourism, as well as increasing
storage, accommodation, and food services sector the stressors on water and wastewater systems
(190 percent in 2000–2019), the majority of which is (Figure 6).
Figure 6. Share of Adriatic Economy in the National GVA of Croatia, Per Sectors in 2000 and 2020 (%)
50
45
40
35
30
25
20
15
10
5
0
Agriculture, Manufacturing, Manufacturing Construction Wholesale Information Financial and Real estate Professional, Public Other service Gross value
forestry and mining and and rital trade, and communi- insurance activities scientific, administration activities added (basic
fishing quarrying trasportation, cation activities technical, and defence, prices)
and sither storage, ccom- administrative education,
industries modation and and support human health
food service service and social
activities activities
Source: CBS. 2000 2020
The established maritime economic sectors in The share of the coastal economy per sector in
Croatia include tourism, fisheries and aquacul- the total national GVA remained relatively sta-
ture, maritime transport, shipbuilding and repair, ble despite a small decrease in 2020. Due to the
and oil and gas. Tourism dominates the coastal COVID-19 pandemic lockdown, tourism, transport,
economy of Croatia and accounts for 22 percent of and trade slumped, pointing to their relative im-
Croatia’s annual GDP. Traditionally, the established portance in Croatia’s maritime economy. The share
sectors—a backbone of Croatia’s maritime econo- of agriculture, forestry, and fishing in the total GVA
my, which are driven by the growth of tourism, are had increased, while it had decreased in the coastal
maritime transport and port services. Other sectors, economy. This trend points out to the importance of
such as oil and gas and shipbuilding, remain re- these sectors, even though their share in the coastal
gionally concentrated, with shipbuilding and repair economy is relatively minor (compared to the faster
concentrated on specific niche markets in Europe growth of other economic activities). It also empa-
and beyond. Yet, the non-tourist sectors are rather thizes the interconnectedness of their value chains
small, accounting for only 2 percent of total em- with maritime tourism. Construction and real estate
ployment in Croatia19. activities have not only recorded high growth rates
in the Adriatic coast but have also boosted their
share at the national level (approximately 45 percent
__________________________
of GVA in each sector) (Figure 7).
bid 13 p 19.
19 I
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34 Charting Croatia‘s Blue Economy Pathways
Chapter 2
Figure 7. GVA Per Sector in the Adriatic Economy During 2000–2020 (€, Thousands)
Agriculture, forestry and fishing
Manufacturing, mining and quarrying and other industries
Manufacturing
Construction
Wholesale and retail trade, transportation, storage,accommodation and food service activities
Information and communication
Financial and insurance activities
Real estate activities
Professional, scientific, technical, administrative and support service activities
Public administration and defence, education, human health and social work activities
Other service activities
Source: CBS.
National employment levels in Croatia are influ- coastal areas. There are seasonal oscillations due to
enced by seasonal variations in employment on accommodation and food service activities, which
the coast. Croatia has one of the lowest employ- explains the seasonal change in employment gen-
ment rates in the EU with 69.7 percent in the age- erated on the coast (Figure 7). The average labor
group 20–64, compared to the EU27 average of 74.6 cost per hour in Croatia in 2022 was €12.1 which is
percent (2022). The share of employed women is 65 only 40 percent of the EU average, with only Bul-
percent, lower than the EU27 average of 69.3 per- garia, Romania, and Hungary having lower hourly
cent. There is no significant gender gap in employ- rates (Eurostat).
ment, however, women on average are paid lower
Despite rising wages and government efforts to
wages than men. The gender pay gap was 11.1 per-
lower taxes, Croatia’s net earnings remain less
cent in 2021 which is less than the EU27 average of
than a half of the net earnings in Germany—the
12.4 percent (Eurostat).
main destination of Croatian labor emigration.
The aggregate employment in the Adriatic coun- Notably, since Croatia joined the EU single labor
ties is 33 percent of the total employment,20 but market, unemployment rates started to fall. At the
not all industries contribute equally. Employment beginning of 2023, unemployment (of domestic
in accommodation and food services stands at 58 workforce) has been historically low, that is, below
percent in winter months and at 67 percent in Au- the average unemployment rate of the Eurozone,
gust. During the summer months accommodation hence it does not represent a problem anymore.
and food services employ 64 percent of the work- Yet, finding workers has been a challenge for Cro-
force, thus becoming the major employer in the atian employers, not only regarding seasonal jobs
__________________________
20 https://podaci.dzs.hr/2023/hr/58023.
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35
Charting Croatia‘s Blue Economy Pathways
Chapter 2
in tourism, but also regarding skilled labor in other tion quotas of foreign labor force, and future de-
industries of the maritime and coastal sector (for mand for labor, especially in blue jobs and tradition-
example, craftsmen in shipbuilding, energy pro- al maritime activities, Croatia’s blue economy (BE)
duction and transmission, aquaculture; and highly strategy could benefit from a more in-depth anal-
skilled people in R&D). The EU policies for revamp ysis of the possible labor market trends and social
migration and asylum policy introducing immigra- impacts.
Figure 8. Seasonal Changes of Accommodation and Food Service Activities in Croatia and Adriatic
Countries
160.000
140.000
120.000
100.000
80.000
60.000
40.000
20.000
0
1. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII.
Total Adriatic
Source: CBS.
Blue Natural Capital and 745 Sites of Community Importance (Habitat
Directive)—as well as 408 sites designated under
Marine ecosystems play a fundamental role in the national laws.21 Croatia has established 248 Na-
determining the economic outputs in Adriatic tura 2000 marine protected areas (MPAs) covering
Croatia. Croatia’s rich biodiversity and protected a total sea surface of 5,279 km2 (Ministry of Econ-
areas have been recognized for their natural and omy and Sustainable Development [MESD] 2023).
ecological values in Europe. National policies em- The areas included in the EU’s network of protected
phasize heightened attention to environmental areas, Natura 2000, comprise 36.8 percent of the
protection, preservation, facilitation of recovery of land territory and 9.3 percent of the marine territory
marine and coastal environmental systems, protec- of Croatia.22
tion of biodiversity and sustainable use of the sea
and the coastal area. One-third of Croatia’s territory There is no specific definition of MPA in the Re-
is part of the European network of nature protec- public of Croatia’s Nature Protection Act, but
tion areas, Natura 2000. There are 1,191 protected ar- there are different categories of protected areas
eas in total in Croatia with a surface area of 25,954 that include marine areas (Table 1). These catego-
km2—38 Special Protection Areas (Birds Directive) ries are largely consistent with the International
__________________________
21 https://biodiversity.europa.eu/countries/croatia (accessed November 10, 2023); https://www.eea.europa.eu/data-and-maps/dashboards/natura-2000-
22 https://biodiversity.europa.eu/countries/croatia.
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36 Charting Croatia‘s Blue Economy Pathways
Chapter 2
Union for Conservation of Nature (IUCN) catego- Table 1. National and Nature Parks in Croatia That
ries for protected areas. In consideration of its high Include Marine Areas28
ecological value, in 2014, the Jabuka/Pomo pit was
declared23 an ‘Ecologically or Biologically Signifi- National Park Nature parks
cant Marine Area’ (EBSA)24, according to the criteria
ational Park
■ N ature Park Lastovo
■ N
adopted by the Ninth Conference of Parties (COP)
Brijuni Archipelago
of the Convention on Biological Diversity (CBD)25.
Later, in 2017, the Jabuka/Pomo pit in the Adriatic ational Park
■ N ature Park
■ N
Sea, was established as a Fisheries Restricted Area Kornati Telašćica
(FRA)26 banning demersal fisheries27. ational Park Mljet
■ N
Figure 9. Nature Protected Areas in Croatia Figure 10. Natura 2000 Sites in Croatia
Source: bioportal.hr, Web Feature Service, produced by authors.
By adopting effective area-based conservation Croatia has abundant water resources and for-
measures Croatia will contribute to the global est land. In the EU, Croatia recorded the highest
and EU goal of reaching 30 percent protection of volume of freshwater resources (with a long-term
valuable marine habitats. In that sense, Jabuka/ average of 27,330 m³ per inhabitant) (Eurostat,
Pomo pit is a good example from the Adriatic Sea 2017). However, according to The River Basin Man-
which shows Croatia’s dedication to sustainable agement Plan up to 2027 (OG, 84/2023) the trans-
fisheries while preserving marine biodiversity. This boundary dependency ratio of Croatia is 77 percent,
approach not only ensures the long-term health of which together with the low population density
fish stocks but also supports the sustainability and adds to the high-water resources’ availability per
prosperity in the Adriatic region. Such initiatives capita. Croatia’s overall water resources amount to
should be promoted and replicated to further en- 111.66 billion m3/year. Water availability in the Adri-
hance the environmental and economic resilience atic River Basin District (RBD) is lower at 20,738
of the area. m3/person/year.29 Namely, Adriatic RBD is poorer
__________________________
23 https://www.cbd.int/doc/decisions/cop-12/cop-12-dec-22-en.pdf.
24 https://www.cbd.int/doc/decisions/cop-12/cop-12-dec-22-en.pdf.
25 https://www.cbd.int/doc/decisions/cop-09/cop-09-dec-20-en.pdf.
26 On October 17, 2017, at its 41st session, through the Recommendation GFCM/41/2017/3 on the establishment of FRA as per the GFCM.
27 http://www.fao.org/gfcm/data/reporting/frajabukapomopit/en/.
28 I UCN definition of protected areas includes six management categories (one with a subdivision): I-a Strict Nature Reserve; I-b Wilderness area; II
National Park; III Natural monument of feature; IV Habitat Species Management Area; V Protected Landscape or Seascape, and VI Protected areas
with sustainable use of natural resources. More on the IUCN definitions in the 2008 Guidelines for applying protected area management categories
can be downloaded at: www.iucn.org/pa_categories.
29 The River Basin Management Plan up to 2027 (OG, 84/2023).
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37
Charting Croatia‘s Blue Economy Pathways
Chapter 2
in surface water but is believed to hold significant Marine ecosystem services are the product of
groundwater flows through the karst aquifer sys- healthy natural habitats. The capacity of natural
tems. capital to provide ecosystem services is directly
linked to the health of marine habitats, pressures,
The total forested land in Croatia is 2.75 million
and management regimes aiming to achieve
hectares, or 47.7 percent of the total land area.
good environmental status (GES). The intercon-
State-owned forests comprise 76 percent of the
nected seascapes of the Adriatic-Ionian basin are
total forest area in Croatia, and private forests 24
under multiple natural and anthropogenic pres-
percent. The forest vegetation of Adriatic Croatia
sures potentially causing deterioration of marine
is subdivided into two main groups. In the areas
ecosystems. Despite some progress in mapping
with higher average annual temperature and less
and assessment of ecosystem services Croatia
precipitation, in the southern part of the coastal re-
does not have a comprehensive assessment of the
gion, predominant vegetation is the evergreen for-
marine ecosystem services31. Understanding the
est vegetation belonging to the Orno-Quercetum
value of natural capital and ecosystem services
ilicis and the Quercetea ilicis class (Horvat, Glavac,
and their inputs to the economy will be essential
and Ellenberg 1974). In the areas with lower aver-
for charting Croatia’s transition to blue economy.
age annual temperature and more precipitation, in
the northern part of the coastal area, the decidu-
ous forest vegetation belongs to the Carpinetum
orientalis and Seslerio-Ostryetum associations and
to the Querco-Fagetea class30 (Horvat, Glavac, and
Ellenberg 1974).
With more than 1,200 islands and a rugged coast-
line of nearly 5,800 km, the Croatian Adriatic coast
makes up about 9 percent of the entire Mediter-
ranean coastline. Croatia has a long tradition in
fisheries, an ample source of income throughout
the year for coastal and island communities. In ad-
dition to providing healthy food, coastal fisheries
add value to Croatia’s vibrant tourism. The main fish
stocks include sardine (Sardina pilchardus), Europe-
an anchovy (Engraulis encrasicolus), hake (Merluc-
cius merluccius), mullet (Mullus barbatus), Norway
lobster (Nephrops norvegicus), octopus’ species
(Eledone spp.), breams (Pagellus spp.), and various
flatfish. Sardine and anchovy stocks are probably
fully exploited. Although 110 species are caught
commercially in Croatia, four species account for
more than 89 percent of the total landing weight:
European pilchard, European anchovy, red mullet,
and hake. Atlantic bluefin tuna (Thunnus thynnus)
is the targeted species in the tuna fishery, governed
by the International Commission for the Conserva-
tion of Atlantic Tunas (ICCAT) recommendations in © Benan Berhan
terms of season, size and quota.
__________________________
30 Stancic, Zvjezdana , Andreja Brigic , Zlatko Liber , Gordana Rusak , Josip Franjic, and Zeljko Skvorc. 2008. “Adriatic Coastal Plant Taxa and Commu-
nities of Croatia and Their Threat Status.” Acta Botanica Gallica 155 (2): 179–199. doi 10.1080/12538078.2008.10516103.
31 https://biodiversity.europa.eu/countries/croatia/maes; Maes, J. et al, Mapping and Assessment of Ecosystems and their Services: An EU ecosystem
assessment, EUR 30161 EN, Publications Office of the European Union, Ispra, 2020, ISBN 978-92-76-17833-0, doi:10.2760/757183, JRC120383
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38 Charting Croatia‘s Blue Economy Pathways
Chapter 2
This transition can be hampered by public pol- perienced the echoes of the COVID-19 lockdown,
icies lacking a resource perspective and trade- the early estimates for 2023 point out that tourist
offs across the sector development goals. numbers will exceed the pre-COVID-19 numbers
Valuation of marine natural capital and related for 2019, reaching the highest recorded numbers
ecosystem services is a central policy tool in the thus far.
blue economy concept. The ecosystem approach
Croatia is among the leading tourist countries
communicates the importance of marine ecosys-
in the world recording 19.5 million visitors and
tem values, reduces the impacts on those values,
91 million overnight stays in 2019 (pre-Covid-19
and creates a context for promoting market-based
numbers), and 17.5 million visitors and 90 million
policy instruments, such as taxes, fees, and sub-
overnight stays in 2021.35 In 2022, the commer-
sidies reducing the ecosystem pressures. Public
cial accommodation facilities recorded 17.8 million
policies and regulations using the ecosystem ap-
tourist arrivals and 90.0 million overnight stays.
proach can help improve marine resource gov-
Compared to 2021, there was an increase of 39.1 per-
ernance and enhance the effectiveness of public
cent in tourist arrivals and a 28.3 percent increase
investments in the maritime space. Natural capi-
in nights spent. When compared to pre-pandemic
tal valuation can also inform investment decisions
data from 2019, there were 9.2 percent fewer tour-
toward sustainable growth of marine-based indus-
ist arrivals and 1.3 percent fewer nights spent. More
tries by considering all costs and benefits, both in-
than 80 percent of the tourists are foreigners from
ternal and external.
central and western Europe, with an increasing
number of tourists from both the United States and
Far East countries.
Established Blue Economy Sectors
In Adriatic Croatia the number of tourist accom-
Coastal Tourism modation units is constantly growing. The ac-
Traditionally the tourism sector has dominated commodation units have increased by 48 per-
the coastal economy of Croatia. With over 13 mil- cent, from 56,720 in 2012 to 108,614 in 2019. About
lion tourists in 2021 (with 93 percent of overnight 94 percent of the total number of tourist accommo-
stays spent for ‘sun, sea, sand’ (3S) tourism), tourism dations is located on the Adriatic coast of Croatia
clearly dominates the blue economy of Croatia. If (CBS; Eurostat). About 88 percent tourist arrivals
developed sustainably, Adriatic tourism has high po- and 95 percent of overnight stays in 2022, were re-
tential to remain the mainstay of maritime economy alized in the Adriatic coast of Croatia. The highest
as identified by the national authorities. number of tourist arrivals and overnights were re-
corded in the Istria County, with 4.6 million arrivals
The tourism sector in Croatia directly employs (25.8 percent of total arrivals) and 27.7 million over-
more than 132,000 people in over 21,000 compa- nights (30.8 percent of total nights in commercial
nies.32 A large part of the tourism services is pro- accommodation). Following Istria County, in 2022
vided in Adriatic Croatia. The average gross salary Split-Dalmatia County recorded 3.2 million arrivals
in accommodation and food services is €1,111.33 In and 17.1 million overnights, and Primorje-Gorski Ko-
2022, the sector contributed €9,121.8 million to the tar County had 2.9 million arrivals and 15.5 million
national GDP, which is 15.9 percent of GDP.34 While overnights.
these results indicate that in 2022, tourism still ex-
__________________________
CBS, Population Census, 2021.
32
CBS 2022.
33
Croatian National Bank, Official data, 2023.
34
CBS 2022.
35
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39
Charting Croatia‘s Blue Economy Pathways
Chapter 2
Figure 11. Tourist Arrivals in Commercial Accommodation Establishments in Adriatic Croatia, 2005–2022
20 000 000
15 000 000
14 000 000
10 000 000
5 000 000
0
Primorje-Gorski kotar Šibenik-Knin Dubrovnik-Neretva
Lika-Senj Split-Dalmatia Republic of Croatia
Zadar Istria
Source: CBS 2023.
The high tourist density in the Adriatic coast of Nonetheless, Croatia’s tourist traffic remains sea-
Croatia signals potentially high anthropogenic sonal and concentrated in the summer months.
pressures on the marine and coastal resources. Nationally, 62 percent of the tourism activities are
Compared to the national average, the tourist den- realized within the two summer months—July and
sity is twofold higher (Figure 12). This is especially August, while for the Adriatic counties, 88 percent
worrisome with regard to the pressure on utilities of the tourist traffic is during the period June–Sep-
and infrastructure (for example, transport, elec- tember. Similarly, the coastal tourism annual expen-
tricity, water, and wastewater management). High diture across EU peaks in the summer to around 41
volumes of tourist activities could also change the percent of the total.36
population’s perception of tourism prospects, link-
ing it to potentially negative impacts on marine and
coastal resources, living conditions and culture.
Figure 12. Tourism Density: Number of Nights in an Area Unit (km2) and Tourism Density Rate
(Number of Overnight Stays Per Diem in an Area Unit (km2)) in Adriatic Croatia and Croatia, 2005–2022
3 000,00 12,00
3 500,00
10,00
3 000,00
8,00
2 500,00
2 000,00 6,00
1 500,00 4,00
1 000,00
2,00
500,00
0 0
Tourism density Tourism density rate
Tourism density Tourism density rate
Source: CBS 2023.
__________________________
C. 2020. “Characterisation of Tourism Expenditure in EU regions.“ European Week of Regions and Cities October 13, 2020.
36 E
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40 Charting Croatia‘s Blue Economy Pathways
Chapter 2
Despite the positive economic results, tourism in yachts (31.4 percent) and other vessels (7.0 percent).
Adriatic Croatia may face future challenges po- In 2021, there was a 75.7 percent increase in sailboats,
tentially constraining its long-term sustainability a 59.9 percent increase in motorized yachts, and an
and performance. Due to the inherent seasonality 82.0 percent increase in other vessels compared to
of services, the sector is particularly vulnerable to 2020. In 2021, the number of vessels on permanent
the impacts and high pressures on road and port berths had increased by 3.4 percent compared to
infrastructure during the peak season. Current 2020. As of December 31, 2021, there were 14,805 ves-
accommodation structure demands more invest- sels on permanent berths in nautical tourism ports,
ments in accommodations that will increase the which represent a 3.4 percent increase compared
sector’s competitiveness. Such investment could to December 31, 2020. Of these, 81.3 percent utilized
offer opportunities for economic growth and em- berths in the sea, while 18.7 percent utilized berths
ployment, while at the same time expanding the on land. In terms of vessel type on permanent berths
capacity of the sector to compete by offering quality in the sea, motor yachts accounted for the highest
travel experiences for tourists. Investment policies percentage (48.0 percent), followed by sailboats
in the sector should promote accommodations for (46.8 percent), and other vessels (5.2 percent). Sim-
high-value visitors who spend above average and ilarly, to vessels in transit, 33.8 percent of the vessels
offer diversified tourism products that could sig- on permanent berths in the sea were of length be-
nificantly contribute to the extension of the tourist tween 12 and 15 m, followed by 27.5 percent of vessels
season. In the same vein, the lack of transport con- between 10 and 12 m.
nections outside the main season, particularly air
and railway transport, are other obstacles that need Croatia has 220 nautical ports40 between Umag
to be tackled to attract more sector investments.37 and Dubrovnik, which support the vibrant
growth of nautical tourism. These include 86 ma-
Nautical Tourism rinas (of which 21 land marinas), 85 anchorages, 16
The nautical tourism segment has large growth berths, and 33 boat storages, covering a total wa-
potential. The National Strategy for Nautical ter surface of 4, 793, 554 m2 and 19, 105 moorings
Tourism Development for 2009–2019, envisioned in 2022. In 2022, berths for land storage posted the
the creation of new moorings and construction highest increase by 12.5 percent and created 10 per-
of high-quality marinas.38 This is premised on cent more jobs in comparison to 2021. Most of the
Croatia’s comparative advantages determined by nautical tourism ports are in the ‘Dalmatian’ coun-
clean sea and coastal settlements, attractive natu- ties (the four southern Adriatic counties), account-
ral scenery, mild climate, hospitality, modern mari- ing for 70 percent of the marinas, while slightly less
na amenities, and overall image of Croatia as a safe than 30 percent of marinas are located in the rest of
destination. During 2019, the pre-pandemic year, the Adriatic counties. The average overall berth oc-
the nautical charter39 recorded 538,000 arrivals and cupancy in nautical tourism ports in 2021 was 62.9
3.56 million overnight stays, which accounted for 2.7 percent. The average berth occupancy in the sea
percent of the commercial arrivals and 3.7 percent was 70.3 percent, while on land it was 41.1 percent.
of commercial overnight stays at the national level.
The revenue from the nautical ports tripled
In 2021, 210,071 transiting vessels visited Croatia’s during 2005–2022. In 2022, the total income from
nautical touristic ports, representing an increase nautical ports was €143.5 million excluding value
of 72.8 percent compared to 2020, when the arriv- added tax (VAT), which is an increase of 14.4 percent
al of vessels slumped due to COVID-19 lockdown compared to 2021. Overall, comparing the total in-
worldwide. Sailboats account for the bulk of tran- come in 2016 to that in 2022, the rise of 40 percent
siting vessels (61.6 percent), followed by motorized was more than evident.
__________________________
World Bank. 2020. Croatia 2030: Roadmap for a Better Future. World Bank Group.
37
EC. 2022. “MSP Country Information Profile Croatia – February 2022.”
38
The traffic of boaters on own vessels (non-commercial stays) is not statistically tracked, but statistical data is collected for the segment of nautical
39
charter (commercial traffic). The nautical charter is monitored through the eCrew system of the Ministry of Maritime Affairs, Transport, and Infrastruc-
ture. The indicators from the eCrew system are integrated into the overall tourism statistics of the eVisitor system of the Croatian Tourist Board (HTZ).
40 Nautical ports are classified according to the Ordinance on Classification and Categorization of Nautical Tourism Ports (anchorages, berths, boat
storages and marinas).
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41
Charting Croatia‘s Blue Economy Pathways
Chapter 2
Table 2. Capacity of Nautical Ports and Employment in 2021 and 2022
2021 2022
Water surface area, m2 4,643,877 4,793,554
Number of moorings, total 18,942 19,105
Length of shoreline equipped for mooring, m 73,705 75,171
Number of berths for land storage 6,137 6,906
Total surface area for land storage, m2 741,049 796,555
Of that covered area, m2 18,949 23,189
Number of employed persons, total 1,831 2,018
Of that with seasonal jobs 374 446
Source: CBS 2023.
Figure 13. Income Generated by Croatian Nautical Ports Excluding VAT, 2005–2022
Realised income of ports, thousand euro
Source: CBS 2023.
Nautical tourism is growing, especially in some Cruise tourism is an important maritime activi-
coastal counties. As one of the most attractive ty. Compared to 2010, in 2021, the total number of
nautical destinations in Europe and in the Medi- cruise ships to Croatia’s Adriatic has reduced while
terranean, the growth prospects of Croatia’s mari- keeping almost the same number of passengers
time economy, particularly with regard to the de- and increasing the average number of stops. The
velopment of new and existing nautical ports will number of holiday days spent was twice as high as
depend on the availability of fully functioning infra- in 2021.41 The most important cruising destination
structure designated for this segment of transport. in Croatia is the city of Dubrovnik, accounting for
In terms of spatial development and siting, nautical more than 70 percent of all cruise tourism in Cro-
tourism would need to prioritize the protection of atia. However, the daily number of people is often
exceptionally valuable natural assets like uninhab- beyond the city’s carrying capacity and, in line with
ited, non-urbanized coasts, islands, islets, bays, and UNESCO recommendations, local authorities are
coves, that serve as an attraction and motivation for limiting the daily number of passengers to the Port
high value domestic and foreign boaters. of Dubrovnik.42 Even though cruise tourism is a dis-
tinct part of the tourism sector, it does not feature
in the new Strategy for the Development of Sus-
tainable Tourism by 2030.
__________________________
BS 2023.
41 C
42 EC. 2022. “MSP Country Information Profile Croatia – February 2022.”
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42 Charting Croatia‘s Blue Economy Pathways
Chapter 2
Figure 14. Cruising Statistics in Croatian Coast, 2013–2022
2000 1 400 000,00
1 200 000,00
1500
1 000 000,00
800 000,00
1000
600 000,00
500 400 000,00
200 000,00
0 0
Arrivals Lenght of stay in days Number of passengers
Source: CBS 2023.
Pressures from cruise tourism vary in different Fisheries and Aquaculture
market segments. Relatively short distances be-
The Adriatic-Ionian marine living resources sup-
tween Croatian ports are well-suited for cruising,
port fisheries, aquaculture, fish processing, and
with smaller ships carrying approximately 200
distribution of fish products. The direct share of
passengers, as well as for adventure or barefoot
fisheries in the GDP of Croatia ranges between 0.2
cruises. In addition to smaller vessel size, this niche
percent and 0.7 percent.45 However, the sector’s
market is characterized by leisure sailing, shorter
real contribution might be underrated as the direct
navigation times, longer stays in port, and high-
economic contribution of the fisheries, fish farm-
er-priced cruise services. With less time spent on
ing and processing, with accompanying activities
board the ship and stronger focus on port ame-
exceeds 1 percent of GDP annually. It is estimat-
nities, the passengers in these categories pre-
ed that fisheries employs (directly and indirectly)
fer ports that can accommodate smaller vessels,
around 25,000 people. The share of aquaculture
particularly island ports with suitable facilities for
in the total fishery production in Croatia is only
guests.43 Consequently, the pressures from many
20 percent but it has a good potential for growth.
cruise ships on local infrastructures, water, and
Fish farming activities are widespread in all coastal
wastewater treatment port facilities, can challenge
counties, with the highest concentration in Zadar
the overall environmental sustainability of cruise
County.46 Croatia’s sea and inland waters offer per-
tourism. Cruise tourism with small ships can have
fect conditions for aquaculture development.47
a lower carbon footprint.44 However, with upcom-
ing International Maritime Organization (IMO) and
Marine fisheries
EU regulations, national policies will need to en-
sure that the cruise industry invests in ships pow- There are two types of marine capture fisheries
ered by zero-life-cycle-emissions fuels and energy. in Croatia: commercial and non-commercial. Com-
Starting in 2023, the EU will begin charging ships mercial fisheries comprises large-scale fisheries, but
for their carbon pollution through the emissions also the new category of small-scale coastal fishery,
trading system (ETS). which is limited in terms of gears and operation. Af-
__________________________
uković, T., A. Asić, I. Šperanda. 2015. “Destination Development for Cruising Tourism.” DIEM 2 (1): 839–850. Available at: https://hrcak.srce.hr/161671
43 L
(accessed May 5, 2023).
44 Carbon dioxide per passenger kilometer (CO2/pax-km).
45 EC. 2022. “EMFF Croatia.”
46 EC. 2022. “MSP Country Information Profile Croatia – February 2022.”
47 EC. 2022. “Croatia Fisheries Factsheet.”
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43
Charting Croatia‘s Blue Economy Pathways
Chapter 2
ter the EU accession in 2013, the commercial fleet Small-scale coastal fleet comprise 86 percent of
was downsized, as required by the EU framework the active fleet, but only 2.7 percent of the total
directives. It especially applied to the reduction of landing weight. The analysis of effort and land-
large-scale fleet (scrapping). Non-commercial fish- ing of the SSCF shows that DFN (drift and/or fixed
ery at sea includes sport and recreational fishing. netters) segment covers 56 percent of days at sea
Croatia has already made commitments to sustain- of small-scale fleet (SSF), over 53 percent of land-
able fishing practices. This includes temporary and ing weight, and 51 percent of landing value in 2021
permanent cessation of fishing activities to help (Table 3). Although HOK50 (vessels using hooks)
achieve balance between fleet capacity and fishing vessels cover only 4.6 percent of the SSCF in terms
opportunities. The BE approach promotes optimiz- of number of vessels, they are significant both in
ing fishing fleet and changing fishing gear to be small-scale fleet landing value and total landing
more selective to reduce overfishing and promote value. In 2020, the number of fishermen involved
more balanced catches. in small-scale coastal fishing was 3,552.51 The aver-
age age of the vessel license holder of SSF was 59.
More than 45 percent of Croatia’s fishing vessels
Interestingly, the younger population (the young-
are registered as multipurpose vessels that use
est vessels’ license holder is 23 years old) owning
different gear during the year. According to Croa-
gears suitable also for other activities such as fish-
tia’s Annual report on the balance between fishing
ing tourism or transport is well represented in this
capacity and fishing opportunities for 2021,48 the
segment.
commercial fishing fleet comprises 7,757 vessels, out
of which 6,235 were active. The commercial fleet is Exploring and promoting the synergies between
divided into the LSF (large-scale fleet) and SSCF49 small-scale fleet (SSF) that are predominantly
(small-scale coastal fleet). Large-scale fleet (in total nearshore and tourism sector could steer fish-
869 vessels in 2021), represented 14 percent of active eries toward more efficiency and sustainability.
fleet, and landed almost 98 percent in weight and SSF use a range of highly selective gears and are
83 percent in value. Majority of LSF in Croatia is con- generally more flexible in terms of target species,
stituted of high-activity commercial purse seiners area, and season. Additionally, SSF employ 25 times
and demersal trawlers which are under a strict man- more people and use three-quarters less fuel than
agement regime. The majority of the Croatian oper- the industrial fishery sector to catch a similar quan-
ational fleet relates to vessels up to 12 m LOA (length tity of edible fish (Jacquet J., D. Pauly 2008, Agnetta
overall), comprising a total of 93 percent. et al. 2022).
Table 3. Fleet Characteristics of Active Vessels by Fishing Activity in 2021
Fishing Total no. Total GT Total kW Share in Share in Share in Share in
activity vessels fleet days at sea landing landing
weight value
LSF 869 23.214,26 125.505,57 13,9% 32,4% 97,3% 82,9%
SSCF 5.366 8.933,77 128.014,51 86,1% 67,6% 2,7% 17,1%
Source: Croatian Annual report on balance between fishing capacity and fishing opportunities for 2021 (Directorate of Fisheries,
May 2022;)
__________________________
48 Directorate of Fisheries, May 2022; https://podaci.ribarstvo.hr/files/CROATIA_Fleet-report-for-2021_FINAL.pdf)
F are generally considered more sustainable because they use fishing gears that have little impact on the environment (for example, the seabed)
49 S
and incorporate traditional elements that are often in line with sustainability principles (FAO 2019).
epublic of Croatia. Fisheries Directorate of the Ministry of Agriculture, p. 62 (https://podaci.ribarstvo.hr/files/CROATIA_Fleet-report-for-2021_FINAL.
50 R
pdf
51 CSB 2021.
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44 Charting Croatia‘s Blue Economy Pathways
Chapter 2
Figure 15. Fishing areas in the Croatian Adriatic Other management measures adopted by Cro-
maritime space atia include temporal and spatial restrictions
for use of certain fishing gears, engine power
in certain areas, and closures for certain species
during their spawning periods. Restrictions are
permanent in some areas and cover significant
parts of internal waters and territorial sea. The 2021
the national assessment of the overall status of the
main segments of the fleet (and fisheries sector)
indicated that out of 23 active segments, 13 are in
balance and 10 segments are out of balance re-
garding the assessment of fishing opportunities.
Segments out of balance are all purse seine (PS)
fleet, demersal trawlers and/or demersal seiners
(DTS), and dredgers (DRB) segments. For all seg-
ments of fleet (and fisheries sectors) deemed be-
ing out of balance, action plans until 2028 have
been elaborated.
Fish Processing Industry and Markets
Source: Republic of Croatia OG 5/2011.
The main fishing harbors are Zadar, Split, Biograd,
Pula, Rijeka, and Šibenik. The full list of the land-
ing places is defined by the Ministry of Agriculture53
and published in the OG and regularly updated. In
Croatian national fishery polices are aligned 2023, 121 landing places for commercial fisheries in
with the principles of the new GFCM 2030 Strat- the coastal area were registered of which 21 are in
egy52 and contribute to sustainable manage- Istria, 17 in Primorje-Gorski kotar, 3 in Lika-Senj, 19 in
ment of fisheries in the EU sea basins. Croatia Zadar, 14 in Šibenik-Knin, 28 in Split-Dalmatia, and
is implementing the EC regulations on fisheries 19 in Dubrovnik-Neretva County (OG 39/2023).
to ensure good status of fish stocks and has de-
All aspects regarding landings, marketing, ware-
veloped GFCM management plans and respective
housing, transportation, and distribution of fish
national regulations. This includes a catch-based
products are regulated by the Marine Fishery Act
management approach with regards to the Blue-
and subsequent regulations. The quality of fishery
fin tuna (BFT quota), swordfish, small pelagic spe-
products is attributable to marine environmental
cies in the Adriatic Sea, and red coral. While many
conditions, the vitality and diversity of marine hab-
of the management measures to achieve Croatia’s
itats, as well as the variety of commercially import-
commitments are in place, monitoring the fish-
ant species.
ing capacity requires systematic data on catches
and fishing effort. Further efforts will be needed Croatia has a long tradition in the fish process-
to carry out a quantitative assessment of current ing industry and an established market for do-
fleet capacity expressed in fishing inputs (number mestic fresh fish and shellfish. The Croatian
of vessels and days spent fishing at sea) and the fishing industry is export oriented. The export of
fleet consistency with the target capacity—for ex- tuna currently accounts for more than half of to-
ample, if the current fleet is greater than the fish tal fresh and frozen fish exports. Overall, the trade
stock size. exchange is characterized by the import of higher
__________________________
52 https://oceans-and-fisheries.ec.europa.eu/news/new-strategy-sustainable-fisheries-and-aquaculture-mediterranean-and-black-sea-2021-11-08_en.
53 https://narodne-novine.nn.hr/clanci/sluzbeni/2023_04_39_679.html.
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45
Charting Croatia‘s Blue Economy Pathways
Chapter 2
fish quantities with a lower market value and by 17 in 2019. People employed in this category corre-
the export of high-value products.54 The EU and na- spond to 71 percent of total sector employment in
tional support for modernization of the sector and 2011 and 2,041 (91 percent of total) in 2019. The main
business environment have created a momentum products of this segment are frozen sardines, an-
for expansion of the fish processing industry.55 Cro- chovy, and canned sardine. The segment with less
atia established regular sales channels to EU mar- than 10 workers had 20 enterprises in 2014, which
kets. These, however, are constrained by the lack of dropped to 10 in 2019. Small businesses often com-
or insufficient value-added products and limited bine and shift their main activities between agricul-
market infrastructure.56 According to EUROSTAT, ture, fishing, tourism, hence the fluctuation in their
in 2020, the sector recorded a value added of €25.9 numbers. Although small firms do not have a big
million covering 2.5 percent of the value added of economic influence on the fish processing indus-
all manufacturing of food products.57 Overall, the try, they are important for local communities from
total volume and value of exports of fish products a social standpoint including for preserving the
show positive trends. local tradition in fish processing. Apart from mass
In 2019, the fish processing industry comprised production, small family businesses innovate and
34 companies and 2,239 employees. In 2011, the tend to create unique products with added value,
industry had four segments which, in 2017, col- such as smoked fish. The main challenges in the
lapsed to three based on the number of workers fish processing sector are to sustain the source of
(≤10, 11–49, 50–249). The most important segment domestic raw material throughout the year and to
in the fish processing industry is the enterprise size maintain the labor force on fishing vessels and in
category with 50–249 employees. This category the processing enterprises. The total income of fish
posted the largest income and total value of assets processing enterprises fluctuated between €3.0
as well as full-time employment (FTE). The 50–249 and €5.0 million during 2016–2019 after hitting the
segment had 11 enterprises in 2011 and increased to peak of €15.5 million in 201558.
© Benan Berhan
__________________________
54 European Commission. 2022. “Croatia Fisheries Factsheet.”.
55 Eurogroup Working Group (EWG) 21-14. “Economic Report on the Fish Processing Industry.” https://stecf.jrc.ec.europa.eu/ewg2114.
56 EC. 2022. “Croatia Fisheries Factsheet.”.
57 Eurostat-PRODCOM; https://www.eumofa.eu/en/croatia.
58 EWG 21-14. “Economic Report on the Fish Processing Industry.” https://stecf.jrc.ec.europa.eu/ewg2114.
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46 Charting Croatia‘s Blue Economy Pathways
Chapter 2
Marine Aquaculture Marine aquaculture is a traditional segment of
the fisheries industry in coastal Croatia. Mari-
According to the European Commission Euro-
culture is based on demersal species (seabass,
pean Maritime and Fisheries Fund (EC EMFF),
seabream mainly), tuna farming, and shells pro-
aquaculture in Croatia will be a leading sector,
duction (mussel and European oyster). In recent
contributing to higher level of environmental
years, the breeding of meagre and scallop (Jacob’s
protection, quality food supply, employment,
cap) has been on the rise. Mariculture dominates
and economic growth.59 An increase in the aqua-
the Croatian aquaculture sector, with 87 percent
culture production of over 17,000 tons, including
of production and 95 percent of production value.
over 1,500 tons of ecological production,60 is ex-
Mariculture is present in all coastal counties, at ap-
pected by 2023.
proximately 400 locations. Fish farming is going on
at over 60 locations, while the other locations have
small shell production facilities.
Figure 16. Mariculture Production (Value €, Thousands) and Tons
Production Value (000 Eur) Production (t)
Source: Republic of Croatia’s National plan for aquaculture development until 2027.
Demersal species in floating cages are produced Production volumes depend on the tuna quotas
through a complete cycle from controlled spawn- and availability of sardine as the main feed.
ing to a product ready for consumption. Most
Shells production is mainly in small family farms,
production capacities are in the Zadar County. The
using traditional technologies and floating parks.
main markets for demersal species are Italy and do-
About 84 percent of the production of European
mestic markets. Mariculture investments in mod-
oyster is in Mali Ston Bay and Malo more area in the
ernization of existing and new production facilities
Dubrovnik-Neretva County. Mussels are produced
has increased significantly to meet the growing de-
along the western coast of Istria, River Krka Estuary
mand domestically and globally.
(Šibenik-Knin County), Velebit Channel, and Novi-
Tuna farming in cages in open and semi-closed grad Sea (Zadar County). The production is based
areas of the middle Adriatic is mostly in Zadar, exclusively on harvesting milt from nature. All fa-
Šibenik-Knin, and Split-Dalmatia counties. It is cilities are under strict monitoring, and the main
based on wild tuna catch (8–10 kg) and farming it market is domestic. Recently, some stagnation of
up to a market size (30 kg and above). The main production has been recorded due to an increase of
market for tuna is Japan. Recently, exports were re- predator species (seabream).
corded to the EU, USA, and other Asian countries.
__________________________
59 EC Maritime Affairs and Fisheries. EMFF Croatia.
60 While national increases were recorded in freshwater aquaculture especially, and the statement only partially refers to the coastal area.
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47
Charting Croatia‘s Blue Economy Pathways
Chapter 2
Croatia is among the EU member states where 2018–2019 by about 18 percent, thus exceeding ex-
the value of fish exports exceeds imports. Ac- ports. Over 40 percent of exported value is from
cording to Croatia’s CBS the export of fish and pro- mariculture products (tuna farming, seabass, and
cessed fish products grew steadily from 2013, both seabream). A large portion of imports is relat-
in volume and value, reaching, respectively, 54,000 ed to species for the processing industry as well
tons and €209 million in 2019. In terms of volume, as for farming (mariculture and cattle breeding)
imports of fish and fish products also grew during (Figure 17).
Figure 17. Main Commercial Species Exported and % of Total Exports in 2021, €, Millions (Nominal Value)
Tuna (Mainly Bluefin) 50 17%
European Seabass 42 14%
273
241
216 220 Sardine 41 14%
197 196 203
163 Gilthead Seabream 35 12%
Anchovy 32 11%
74
61 62 66 67 68 75
26
55 60 Others 99 32%
2013 2014 2015 2016 2017 2018 2019 2020 2021
Value (million euros) Volume (1.000 tonnes)
Source: European Market Observatory for Fisheries and Aquaculture (EUMOFA) 2023 (https://www.eumofa.eu/en/croatia).
According to data from the Fishery Directorate,61 Maritime Transport
the annual consumption of seafood per capita is
The sector includes passenger and freight trans-
lower that the EU27 average. The highest record-
port and related services. In 2019, maritime trans-
ed consumption of 22.90 kg/capita was in 2021. This
port contributed to 9.06 percent of the blue econo-
is still lower than EU average62 (24 kg live weight)
my jobs in the EU blue economic space.64 Due to its
of seafood per year in 2019, when Croatia record-
direct link with the growth of tourism, particularly
ed 20.02 kg live weight/capita. Marine species with
in the islands, passenger ferry services are among
high consumer preference are the pelagic, ceph-
the fastest-growing maritime activities in Croatia,
alopods (squid, cuttlefish, octopus), and demersal
with a continuous increase in the number of pas-
(hake, cod, seabass, seabream, and so on). The main
sengers.
consumption categories are fresh/chilled fish, fol-
lowed by fish fillets. That highest consumption in The economic potential of Croatian seaports is
2021 was the result of higher tourist consumption based on its favorable geographical position and
preference for fillets and cephalopods. A typical the deep penetration of the Adriatic Sea into the
consumer in Croatia prefers wild fish of local origin. continent. Integration into the network of Europe-
However, due to relatively low purchasing power an transport corridors represents a development
and high prices of fish and seafood, consumers ‘left’ potential for inclusion in trade flows within the Eu-
the artisan fish markets and turned to specialized ropean and world markets. Almost 90 percent of
shops and supermarkets searching for fresh/frozen freight transport in Croatian ports takes place in
but affordable products.63 the ports of Rijeka, Ploče, and Split ( Table 4). Croa-
__________________________
Availability and apparent consumption of fishery and aquaculture product in the Republic of Croatia in 2020 and 2021.” (https://ribarstvo.mps.
61 “
hr/61 UserDocsImages/Dostupnost%20i%20potro%C5%A1nja%20proizvoda%20ribarstva%20i%20akvakulture_2020%20i%202021%2016.2.2023.pdf).
62 https://oceans-and-fisheries.ec.europa.eu/facts-and-figures/facts-and-figures-common-fisheries-policy/consumption_en.
63 EUMOFA 2023 (https://www.eumofa.eu/en/croatia).
64 EC. 2022. “The EU Blue Economy Report 2022,” p.27, table 2.4.
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48 Charting Croatia‘s Blue Economy Pathways
Chapter 2
tian statistics on cargo loads adhere to the manda- carried by sea. These provisions are aligned with
tory provisions of the International Convention for the blue economy focus on sustainable sea-based
the Safety of Life at Sea, 1974 (SOLAS), and the Inter- economy and solutions for advancing the ‘green’
national Convention for the Prevention of Pollution agenda in the shipping industry.
from Ships, 1973 and 1978 (MARPOL), for preven-
tion of pollution by harmful packaged substances
Table 4. Total Cargo Volume in Tons, Thousands, in 2021
Port Port Embarked Disembarked
Authority Total of that Total of that
dangerous l dangerous
oad load
Gaženica – cargo and Zadar 62,436 4,727 340,201 258,592
passenger port
Gruž – passenger port Dubrovnik 7,446 0 5,328 0
(Dubrovnik)
Ploče Ploče 1,041,096 596,486 3,185,438 2,733,663
Rijeka – Bakar Rijeka 99,168 0 680,073 671,845
Rijeka – Omišalj Rijeka 333,051 333,051 6,711,397 6,711,397
Rijeka – Raša (Bršica) Rijeka 350,700 0 0 0
Rijeka –Rijeka Rijeka 570,761 480 127,554 543
Rijeka –Sušak Brajdica Rijeka 1,554,124 17,146 1,825,889 21,481
Split – City port Split 47,192 108 34,063 0
Split – Kaštela B Split 592,249 7,758 128,090 22,475
Split – Kaštela C Split 3,486 3,486 455,622 434,342
Split – Kaštela D Split 0 0 0 0
Split – Vranjičko-Solinski bay Split 756,475 0 177,795 93,280
Šibenik Šibenik 73,162 0 125,476 0
Zadar – passenger port Zadar 16 0 5 0
Total 5,491,362 963,242 13,796,931 10,947,618
Number of employed ptal 1,831 2,018 2,018 2,018 2,018
Of that with seasonal jobs 374 446 446 446 446
Source: Ministry of Sea, Transport and Infrastructure, 2023.
Passenger traffic takes place mainly in the ports took place in the port of Split recording the high-
of Split and of Zadar, while most of the cruise est number of total sailings, followed by Dubrovnik
traffic in the port of Dubrovnik.65 According to (port Gruž), Zadar (Gaženica and Zadar port), Šibe-
the Ministry of Sea, Transport and Infrastructure in nik, and Ploče.
2021, domestic sailings to and from domestic ports
__________________________
C. 2022. “MSP Country Information Profile Croatia – February 2022.”
65 E
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49
Charting Croatia‘s Blue Economy Pathways
Chapter 2
Figure 18. Seawater and Coastal Transport: Passengers (in Thousands) and Goods (Tons, Thousands)
35 000
30 000
25 000
20 000
15 000
10 000
5 000
0
2010. 2011. 2012. 2013. 2014. 2015. 2016. 2017. 2018. 2019. 2020. 2021.
Domestic passengers International passengers Domestic goods International goods
Source: CBS 2023.
In 2022, 14.3 million passengers were transported for military purposes that fall under special rules, are
by the Croatian maritime and coastal fleet which determined by a decision on concession.
is an increase of 13.7 percent compared to 2021. A
The public maritime transport supports 56 lines
total of 15.3 million tons of goods were transported,
of national importance (24 ferries, 16 fast ship-
which is a decrease in maritime and coastal trans-
ping lines, and 10 classic shipping lines, with an
port by 13.8 percent compared to 2021. In 2022, an
additional 9 lines without public service obliga-
increase in the volume of liquid cargo traffic was
tion).67 They are maintained by 13 shipping compa-
recorded which accounted for 48 percent of the
nies with a fleet of 87 ships in total in 2021, of which
total goods traffic and an increase of 21.8 percent.
15 are passenger ships, 17 fast passenger ships, and
Additionally, there was a 2.6 percent increase in the
45 are ferries. The average age of vessels operat-
volume of dry bulk cargo traffic, which accounted
ing in public liner maritime transport in 2020 was
for 29 percent of the total goods traffic, compared
41 years for conventional passenger ships, over 21
to 2021. However, containerized cargo experienced
years for roll-on/roll-off passenger ships, and over 25
a decline of 14.0 percent in tonnage, representing a
years for high-speed passenger ships. Public liner
15 percent share of the total goods traffic, thus in-
transport recorded 13.8 million passengers and 3.5
dicating a significant decrease of the transported
million vehicles in 2018, while in 2022 those figures
goods.
have been 13.4 million and 3.8 million, respectively.
Croatia has 435 seaports open to public traffic, of Passenger and vehicle public liner traffic increased
which 6 ports (namely Rijeka, Zadar, Šibenik, Split, in 2022 compared to 2021, recording a growth of 14.1
Ploče and Dubrovnik) are of particular (interna- percent in passengers and 8.9 percent in vehicles.
tional) economic importance. Of these, 67 ports The largest shipping company is Jadrolinija, based
are of national importance and 362 ports of local in Rijeka and fully owned by the state. The Jadrolini-
(communal) importance.66 Construction, mainte- ja fleet currently operates 54 vessels, including 10
nance, and management of ports open to public high-speed passenger ships, 4 conventional pas-
transport are conducted through the port authori- senger ships, and 40 roll-on/roll-off passenger ships,
ties, while ports of special purposes, except for ports 3 of which are used for international navigation. In
__________________________
66 National Recovery and Resilience Plan, 2021–2026.
67 Coastal Liner Shipping Agency http://agencija-zolpp.hr/wp-content/uploads/2023/02/2022-MEDUNARODNE-LINIJE-Promet-putnika-i-vozila.pdf.
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50 Charting Croatia‘s Blue Economy Pathways
Chapter 2
2022, high-volume traffic was realized by Jadrolini- of waste and wastewater from vessels. According
ja’s ships, which transported 11,615,368 passengers to the official national data, only a few ports have
(86.1 percent) and 3,394,132 vehicles (89.3 percent). some of the necessary infrastructure/facilities/ser-
vices, and none of them for all kinds of waste and
Currently, vessel size and age inhibit the capac-
wastewater.72
ity of the Croatian fleet, hamper growth, and
therefore necessitate fleet renewal.68 Adriatic Almost every Croatian port except Rijeka faces
Croatia is exposed to strong winds. Obsolete port infrastructure problems which relate to accessi-
infrastructure and aging coastal liner fleet cannot bility of ports and effective use of space. Cargo
guarantee reliable access to islands during strong and industry ports, especially in Split and Ploče, are
winds. not connected to a railway. Existing railway con-
nections are obsolete and completely inadequate
Croatia’s maritime port infrastructure is well de-
for cargo transportation which in future could im-
veloped. Rijeka and Ploče, the two major ports
pede freight growth. The Strategy of Transport De-
on Croatia’s Adriatic coast, have terminals for
velopment 2017–2030 defines Split and Dubrovnik
the transshipment of various types of freight.
as passenger ports, dedicated both to island and
Although terminal capacities are satisfactory, the
tourist traffic, deemphasizing the importance of
level of technological development varies. Some
Split port in handling cargo traffic, domestic and
of the terminals at the Port of Rijeka are outdated
international. Intermodal transport is recognized as
(for example, the bulk cargo terminal) and not en-
a concept, but it seems there is a long way to go to
vironmentally friendly. From a technological and
attain this goal. Port space is not efficiently used,
operational efficiency perspective, the terminals
different activities are overlapping, revitalization
for liquid cargo and containers meet international
of abandoned infrastructure/buildings is lagging,
standards of quality and are competitive.69 In 2021,
while there is shortage of public land, traffic issues,
the embarked dangerous cargo70 was 17 percent of
and so on. The issue of effective use of port space
the total cargo, the disembarked dangerous cargo
and city development is a matter of jurisdiction and
was higher—79 percent of the total cargo. In 2022
coordination of different levels of government and
liquid cargo—coal and lignite, crude oil and natu-
their cooperation in physical planning and beyond.
ral gas, comprised the highest share (30 percent) of
Most of the passenger lines are occupied by a sin-
the embarked international cargo traffic, followed
gle liner, Jadrolinija. A small number of small private
by crude and refined petroleum products (22 per-
liners struggle for the concessions and incur high
cent).71 Management of environmental risks poses
operating costs. Outside the tourist season, there is
special demand for carefully planned and managed
no regular line along the coast to connect the is-
port services and operation.
lands and within the Adriatic-Ionian basin.
Intense boat traffic in the international seaports
(arrivals and departures) increases the pressure
Shipbuilding and Repair
on marine environment and existing infrastruc-
ture of the ports. Hence, the priorities in the de- The shipbuilding sector has had fundamental
velopment of ports open to public traffic, among transformations in the past 30 years. In 2017, the
others, particularly relate to the implementation of Croatian shipbuilding industry employed approx-
the new law, introducing EU and MARPOL require- imately 7,200 workers accounting for 5.0 percent
ments from July 2023, to ensure all ports provide of the industrial workforce.73 By 2019, the workers
adequate acceptance and management of all types in the shipbuilding industry decreased to about 2.7
__________________________
68 National Recovery and Resilience Plan, 2021–2026.
69 World Bank. 2020. “Croatian Logistics, Opportunities for Sustainable Competitiveness.”
nternational Convention for the Safety of Life at Sea, 1974 (SOLAS), as amended, deals with various aspects of maritime safety and contains in
70 I
chapter VII the mandatory provisions governing the carriage of dangerous goods in packaged form. The carriage of dangerous goods in packaged
form shall comply with the relevant provisions of the International Maritime Dangerous Goods (IMDG) Code which is considered an extension to
the provisions of SOLAS chapter VII. Data source: Croatian Ministry of Sea, Transport and Infrastructure, 2023.
71 CBS 2023.
72 Ministry of the Sea, Transport and Infrastructure, https://mmpi.gov.hr/more-86/zastita-jadrana-103/103.
73 EC. 2022. “The EU Blue Economy Report 2022.”
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51
Charting Croatia‘s Blue Economy Pathways
Chapter 2
percent of the industrial workforce. From a growth ucts. The realization of the objective will be through
poll of the coastal economy, the Croatian shipbuild- diversification of supply routes of energy and ener-
ing industry is almost negligible in the context of gy-generating products; increasing gas and energy
global shipbuilding. Nonetheless, the sector contin- storage capacity in the energy system; increasing
ues to be one of the important industrial sectors in the flexibility (and thus resilience) of the energy sys-
Croatia. tems; protection of critical infrastructure; and mit-
igating risks related to cyber security and climate
The shipbuilding sector is economically and so-
change.
cially important for the national and local econ-
omy. It provides quality employment for large Croatia aims to cut greenhouse gas (GHG)
enterprises and small and medium enterprises emissions by 45 percent by 2030 and to aban-
(SMEs). In the past 15 years, the large shipbuilding don coal by 2033. The 2030 National Energy and
enterprises had contributed consistently around Climate Plan (NECP) sets a target to make sig-
2 percent of GDP. The industry is geographically nificant investments in the energy sector and
concentrated in Dubrovnik (Sustjepan), Vela Luka, achieve 36.4 percent of the energy resources
Korčula, Split, Trogir, Zadar, Rijeka, Bakar, Kraljevica, from renewable energy by 2030. To address the
and Pula. Regionally, two of the four large shipyards need for transmission network upgrades by the
are situated on the north Adriatic zone (Istria and middle of 2026, Croatia plans to revitalize about
Primorje), and two in the South (Brodosplit, Split, 550 km of transmission lines, to connect 1,500
and Brodotrogir, Trogir). Nonetheless, Croatian MW of new renewable energy sources (RESs) into
shipyards face financial problems and an uncertain the system. Under the Republic of Croatia Recov-
future.74 In 2020, the production of general cargo ery and Resilience Plan76 €250 million has been
vessels dropped to zero compared to 2019 when it allocated for those investments, although the to-
reached 3,147 Compensated Gross Tonnage (CGT). tal investment needs for network expansion cost
In 2020, manufacturing of other transport equip- to meet the RES scale-up are estimated between
ment reached only 60 percent of the average pro- €600 and €800 million.
duction values in 2015. 75
The shipbuilding industry in Croatia needs in- Figure 19. Floating LNG Terminal on Island Krk
vestments for production of green and auton-
omous vessels, smart solutions for ship repairs
and future ports. Through strategic scientific part-
nerships for innovation, research, and development
the sector could spur the development of new
products in those niches. At the same time for the
sector SMEs to modernize, they will benefit from
integration in the regional value chains through
technology transfer and digital transition for which
more investments will be needed.
Oil and Gas
The main objective of the Energy Development The expansion of the liquefied natural gas (LNG)
Strategy of Croatia is to ensure a lasting, secure, terminal is a major project for the security of nat-
and quality supply of all energy-generating prod- ural gas supply. It is a project of strategic impor-
__________________________
74 EC. 2022. “The EU Blue Economy Report 2022.”
BS. 2022. “Industrial Production in 2020: Annual PRODCOM Results.” Statistical Reports, Zagreb; CBS. 2016. “Production and Sales of Industrial
75 C
Products.” PRODCOM, Zagreb. Available at: https://podaci.dzs.hr/hr/arhiva/industrija-energija-i-informacijsko-drustvo/godisnje-statistike-industri-
je/proizvodnja-i-prodaja-industrijskih-proizvoda-prodcom/.
76 Croatia Recovery and Resilience Plan approved by EU Council on July 28, 2021; http://planoporavka.gov.hr/.
contents
52 Charting Croatia‘s Blue Economy Pathways
Chapter 2
tance for the region and the EU, led by Republic of an onshore part. As of April 2022, the capacity of the
Croatia.77 Future plans include connecting the LNG LNG terminal has been increased from 2.6 to 2.9
terminal78 in the northern Adriatic Sea basin to the billion cubic meters (bcm), with further expansion
Ionian Adriatic gas pipeline and construction of in- plans in place. Its capacity will be doubled in the
terconnectors to Bosnia and Herzegovina, Hunga- next few years. Additionally, to reduce the imports
ry, and Serbia (Integrated Energy and Climate Plan from other countries and cope with the declining
2019, 65). The floating LNG terminal79 in Omišalj on gas production plans (Figure 20), the strategy fore-
the island of Krk (County of Primorje-Gorski Kotar) sees exploration of potential hydrocarbon deposits
was launched in 2021 and it consists of Floating in the Adriatic (Integrated Energy and Climate Plan
Storage and Regasification Unit (FSRU) vessel and 2019, 66).
Figure 20. Natural Gas Production Projections Estimates by 2050
1000 m3
2000
1800
1600
1400
1200
1000
800
600
400
200
0
2013. 2016. 2017. 2020. 2025. 2030 2035 2040 2045 2050.
Existing production New production – land New production – sea
Source: Integrated energy and climate plan (2021, 71).
Gas exploitation activities are mainly in the north- Exploration and Exploitation in the Adriatic (2015),
ern Adriatic Sea, with 20 operative gas platforms there are 28 hydrocarbon exploration areas envis-
and about 228 km of gas pipeline laid on the sea aged in the Adriatic Sea, located both in the territo-
bottom. There are scenarios of oil and gas exploita- rial sea and in the continental shelf of the Republic
tion which predict a new offshore oil production of Croatia: 8 exploration areas in the northern Adri-
projected to reach more than 800,000 m3 in 2035. atic, 15 in the central Adriatic, and 5 in the southern
Similar projections envisage new gas production to Adriatic. A strategic environmental assessment was
peak about 800 million m3 in 2023 (Integrated En- carried out for the Program but there is no national
ergy and Climate Plan 2020, 69–70). According to consensus on how it should be achieved.80
the Framework Plan and Program for Hydrocarbon
__________________________
77 https://lng.hr/en/about-terminal/.
78 EC. 2022. “MSP Country Information Profile Croatia – February 2022.”
79 As of April 2022, the capacity of the LNG terminal has been increased from 2.6 to 2.9 bcm, with further expansion plans in place.
80 EC. 2022. “MSP Country Information Profile Croatia – February 2022.”
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53
Charting Croatia‘s Blue Economy Pathways
Chapter 2
Figure 21. Hydrocarbons’ Exploitation Map in potential threats for salt production. This business
Adriatic Croatia (MESD) activity was also affected by inconsistency in the
concession granting framework.
Mineral extraction is growing in quantity and val-
ue. According to the Register of Active Exploita-
tion Fields in the Republic of Croatia (May 2021),
there are more than 200 legal entities holding
concessionaires for exploitation. In Adriatic Croa-
tia, there were 145 holders of concessions and 197
active exploitation fields: 174 fields related to stone
quarries, 3 (Ston, Pag, Nin) to sea salt, 4 to sand
and gravel for construction, and rest to carbonate,
bauxite, mineral ores for cement production, flint,
gypsum, carbonate mineral ore for industry. Stone
extraction has a long tradition in Adriatic Croatia.
There is also a traditional education of craftsmen in
stone design and conservation (Brač, Istria). As far
as conflicts of quarrying with other economic ac-
tivities are concerned, the main conflict arises with
tourism (Brač). Nonetheless, stone quarrying and
related activities enjoy strong support from local
communities.
Future scenarios for the sustainable use of Cro-
atia’s nonliving marine resources need to build
on creative no-harm exploitation backed by ef-
fective commercial solutions. This includes har-
Sea Salt and Inert Materials monizing the procedures for granting concessions
to make them more transparent and an effective
Production of sea salt has long traditions in Cro-
mechanism for monitoring of granted concessions,
atia. Historically, the Adriatic coastal areas played
effective control over illegal construction; priori-
an important role in the salt production due their
tization of economically viable projects and new
favorable geomorphological features.81 There are
technologies; priority funding for renewable energy
three registered areas for salt extraction, Ston in
projects; and stronger institutional capacity to as-
Dubrovnik-Neretva County, and Pag and Nin in
sess and prevent negative impacts.
Zadar County. All of them use traditional, environ-
mentally friendly evaporation of seawater technol-
ogy. Pag reported investments in new warehouse Emerging Blue Economy Sectors
facilities and diversification of production. However,
an increase of production quantities was not envis- Exploring the full economic potential of the blue
aged due to the specific nature of salt and produc- economy could go beyond existing maritime sec-
tion modes. Marine pollution (transportation, cruise tors. Although these are still underdeveloped, in fu-
and nautical activities, marine litter) as well as cli- ture, Croatia can take advantage of the untapped
mate change (changes in precipitation distribution economic potential in the emerging blue economy
and draft periods, sea level rise) are recognized as sectors. 82
__________________________
roatian Waters. 2017. Iz Hrvatske vodoprivrede: Jadranske tvornice “bijelog zlata”: https://voda.hr/hr/novost/iz-hrvatske-vodoprivrede-jadran-
81 C
ske-tvornice-bijelog-zlata.
82 Emerging sectors of the blue economy encompass economic sectors and activities related to the marine environment but are not mature or for
which data are not available (The EU Blue Economy Report 2022, 112). The emerging sectors are ocean energy, the blue biotechnology, desalina-
tion, maritime defense, security and surveillance, research and education and infrastructure.
contents
54 Charting Croatia‘s Blue Economy Pathways
Chapter 2
Blue energy Bleu 2022). The existing methods for obtaining re-
newable energy from salinity gradients (for exam-
Salinity gradient energy could be an important
sustainable blue energy source. Nowadays, the ple, pressure retarded osmosis, reversed electrodial-
global extractable energy from river mouths cor- ysis, and capacitive mixing)—their advantages and
responds to about 3 percent of global electricity disadvantages, as well as Croatia’s potential to gen-
consumption (Plan Bleu 2022). In the region, only erate blue energy need to be studied further. Plan
Croatia and Italy are among the eight Mediterra- Bleu recognized that Croatia has some potential in
nean countries with recognized salinity gradient offshore wind and marine thermal energy (Nikolaid-
energy potential that could be exploitable83 (Plan is et al. 2019) (Figure 22).
Figure 22. Blue Economy Emerging Sectors in the Mediterranean Basin
Highlighted BE potential in MED region
Offshore Wind Wave Energy Tidal/Current Marine Thermal Salinity Gradient Marine Biomass
Energy Energy Energy Energy
Italy Spain Croatia Greece Slovenia Cyprus Portugal Malta
Source: Nikolaidis (2019, 3).
Renewable Energy Resources could help Croatia to achieve the national decarbon-
and Offshore wind energy ization goals faster and ramp up the renewable en-
ergy sector. Currently, the installed RES capacity in
In 2021, the Government of Croatia adopted the
the coastal area is limited to several solar photovol-
National Energy Efficiency Program for decarbon-
taic (PV) plants with capacities of 1–3 MW, mostly on
izing the energy sector. A study by the European
the islands (for example, Vis, or Cres under construc-
Bank for Reconstruction and Development (EBRD)84
identified more than 29,000 km2 of offshore area tion with 7 MW). Wider utilization of rooftops solar
available for renewables, including offshore wind PV would be relevant for coastal areas, especially as
(both bottom-fixed and floating) and floating pho- scaling up has been slowed by government inter-
tovoltaic power plants. This includes several low-im- ventions to keep the electricity price low. According
pact areas in the northern part of the Adriatic Sea, to the study of the Energy Institute Hrvoje Požar con-
where up to 25 GW of offshore wind capacity could ducted in 2018, to achieve its renewable energy goals
be installed. The identified potential of up to 25 GW Croatia needs to make investments in the range of
of offshore wind capacity in low-impact areas alone US$40–50 million annually.
__________________________
83 Plan Bleu is one of the Regional Activity Centers of the Mediterranean Action Plan (MAP) of the United Nations Environment Program (UNEP);
https://planbleu.org/wp-content/uploads/2020/10/rapport_activites2019_VDef.pdf
84 Akcijski-plan-za-obnovljive-izvore-web71.pdf (oie.hr) Project of the Association of Renewable Energy Sources of Croatia (OIEH).
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55
Charting Croatia‘s Blue Economy Pathways
Chapter 2
There is growing interest in investments in wind momentum and efficiency with lower costs and re-
and solar power in the region of Dalmatia. The duced impact on the environment.
Agency for Hydrocarbons has launched investiga-
Croatia can take advantage of the renewable
tions into potential offshore windmills locations,
energy potential in the Adriatic Sea. To seize this
all of which are in the continental shelf. However,
further analysis and measurements will be needed opportunity Croatia needs a legislative framework
to determine the real potential of various locations. for renewable energy and a national maritime spa-
The Croatian oil and gas company INA-Industrija tial plan which comply with the EU environmental
Nafte, D.D. (INA) has announced plans to diversify legislation and the integrated maritime policy. The
into renewable energy at its own facilities after 2025. national maritime spatial plan will be subject to a
The Croatian transmission system operator (HOPS) strategic environmental assessment under Direc-
plans the construction of two major substations tive 2001/42/EC (‘SEA Directive’) and to additional
and an alternative transmission route to the coastal assessments to ensure continuous protection of
region of Croatia which harbors most of the coun- Natura 2000 sites and protected species.86 This in-
try’s RES potential. This will allow the integration of cludes the low- and medium-impact areas identi-
large-scale RES projects in the country’s coastal re- fied in Croatia’s National Energy and Climate Plan
gion. This includes an upgrade the internal power (NECP) (under review). Croatia’s current 10-year
400 KW grid on the route Konjsko substation (Split) plan to upgrade its electricity transmission system
– Meline substation (Rijeka) to accommodate future should also allow for developing capacity for poten-
inputs reaching 1,000 MW and higher.85 The tech- tially new offshore renewables and collaboration
nical and legal issues related to submarine cables, with the plans of neighboring countries to develop
infrastructure requirements, and funding of such their own offshore renewables.
projects must be resolved as well. This includes se-
curing appropriate investments in the transmission
network and the management system and a func-
Other Blue Economy Activities
tioning and competitive electricity market to enable for Future Development
more market participants. Streamlining the proce-
The European Green Deal (EGD),87 the Farm to
dures of physical planning, especially in the case of
Fork Strategy,88 and the Sustainable Blue Econ-
pipelines, submarine cables, and similar non-point
omy Communication89 identify the potential of
infrastructure, especially in the cases of trans-bor-
farmed seafood as a source of protein for food
der infrastructure could unlock the opportunities
and feed with a low-carbon footprint.90 The blue
for integration in wider regional markets.
bioeconomy is developing fast in Europe, and it
Companies from Croatia already collaborate with benefits from strong research and stakeholder
the scientific community to manufacture equip- engagement by the EU. Blue biotechnology refers
ment, installations, and other components for to “economic activities associated with the use of
onshore renewable energy production. The ship- renewable aquatic biological resources to make
building industry could develop capacity for build- products” (EUMOFA 2023, vii), and it considers
ing offshore wind turbines and other production non-traditional commercial exploitation of marine
facilities, based on the construction and installation organisms. Due to climate change issues, and the
capacity of Croatian shipyards. Further research last policy responses, much of the focus in blue bio-
and development in innovative technology will technology is dedicated to its potential to contrib-
be necessary for offshore renewables to reach full ute to the reduction of the global CO2 emission.
__________________________
85 The Integrated Energy and Climate Plan 2020, 72.
uropean Commission, Brussels, 19.11.2020, COM (2020) 741 Final, Communication from the Commission to the European Parliament, The Council,
86 E
The European Economic and Social Committee and the Committee of the Regions. An EU Strategy to Harness the Potential of Offshore Renewable
Energy for a Climate Neutral Future.
87 COM/2019/640 final.
88 COM/2020/381 final.
89 COM(2021) 240 final of 17.5.2021.
90 E C Brussels, 15.11.2022 COM (2022) 592 final, Communication from the Commission to the European Parliament, the Council, the European Eco-
nomic And Social Committee And The Committee Of The Regions Towards a Strong and Sustainable EU Algae Sector {SWD(2022) 361 final.
contents
56 Charting Croatia‘s Blue Economy Pathways
Chapter 2
An emerging sector of the blue economy, world- the human and technological resources available in
wide, is algae cultivation (EUMOFA 2023). How- research organizations.
ever, cultivation of commercial use algae is at a
The European Commission’s Blue Economy Strat-
nascent stage in the EU. Algae could contribute to
egy emphasizes the role of research and innova-
environmental sustainability by capturing residual
tion in achieving a sustainable blue economy. It
materials, mitigating climate change, and by car-
encourages governments to push up investments
bon capture, substituting other food, petfood, and
for strengthening science-based policy-making
animal feed, providing alternatives for petrochem-
process by collaboration with academia and the
icals, preempting and reducing plastic waste, and
research community. Research and innovation is
by regenerative ocean farming (EUMOFA 2023). In
deemed to be a central driver for fostering a sus-
the future, seaweed farms could have an import-
tainable blue economy as well as for fulfilling the
ant place in the European blue economy. However,
goals laid out in the EGD. Increasing the scientif-
more research and assessment of environmental
ic discourse in Croatia’s policy making and sector
impacts will be needed as national experts are rath-
interventions could be achieved by increasing the
er cautious to the idea of developing algae cultiva- share of R&D expenditure which in 2021 stands at
tion in Adriatic Croatia. 1.27 percent of GDP91 (an increase of 0.02 percent
from 2020) and was significantly lower than the EU
Innovations, Research and Development average of 2.27 percent of GDP and the OECD aver-
Science, research, and development (R&D) are age of 2.71 percent.92
enablers for achieving economic goals by de- While Croatia is trying to move away from pre-
veloping solutions to overcome challenges and dominantly basic research, investments in ap-
enhance the blue economy sector synergies. plied research and intellectual property registra-
Both the private and public sector would benefit tion remain rather low. Croatia’s total research and
from unlocking new ocean-enabled technologies development personnel was 27,424 in 2021, which
and measures for strengthening the resilience of is 8.8 percent more than in the previous year. No-
coastal and island communities. Until recently, the tably, 13,247 (48.3 percent) of the researchers and
Croatian business sector’s focus was on innovations scientists are women. A detailed analysis by sector
that were not based on R&D, and the level of inno- shows that enterprises financed R&D with internal
vations in R&D lags the EU average. While commer- funds (77.4 percent), while the government and pri-
cial relevance may not be the main aspiration of vate non-profit sector (58.0 percent) and higher ed-
many Croatian scientists, there is a need for greater ucation (62.0 percent) were mostly financed by the
collaboration between scientific institutions and central and local governments (Croatian Bureau of
businesses with the aim of making better use of Statistics).
Table 5. Gross Domestic Expenditure on R&D, by Sectors and Types of Expenditures, 2021
Gross domestic Capital Current expenditures
expenditure Expenditures Total Labor costs Other
current costs
Sectors − total 724,638 106,373 618,266 452,918 165,347
Business enterprise sector 337,096 34,995 302,100 199,472 102,628
Government and private 153,211 33,760 119,451 89,115 30,336
non-profit sector
Higher education 234,332 37,617 196,715 16,4331 32,383
Source: CBS.
__________________________
ttps://databank.worldbank.org/source/world-development-indicators#.
91 h
92 h ttps://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm.
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57
Charting Croatia‘s Blue Economy Pathways
Chapter 2
Chapter 3.
Croatia’s Maritime
Space – Threats
and Opportunities
© Benan Berhan contents
58 Charting Croatia‘s Blue Economy Pathways
Chapter 3
Key takeaways
■
Adriatic Sea has always been a key factor in the economic activities of Croatia. Traditional maritime sectors
which generate significant economic profit face sustainability challenges potentially hampering the pros-
pects of future economic opportunities.
■
Pressures stem from climate change, pollution, urbanization, and overutilization of marine living resources,
all of which threaten the economic resilience of Adriatic Croatia by reducing the value of maritime assets. In
the medium term these threats could be detrimental to maritime economic sectors which depend on them
and diminish the quality of life of coastal communities.
■
Impacts from solid waste, effluents, and marine litter from tourism are estimated to cost around €21 million
annually in economic damages. If current anthropogenic pressures persist, then the costs of environmental
degradation will likely rise exponentially exacerbating the environmental degradation at the national level,
estimated at 2–3 percent of GDP (2020).
■
Overutilization of natural spaces for capacity development and seasonal pressures on infrastructure from
large number of tourists act as stressors. The Croatian coastal zone is under pressure from expansion of
residential housing and tourist infrastructure on available land. The consequences could be significant in
terms of deteriorating landscapes, overuse of water resources, and wastewater discharged in the karstic
underground and into the sea.
■
With current trends, the value of marine assets will potentially decline, causing the number of high-value
tourists to decline, exacerbating public costs, reducing revenues, and hence increasing the vulnerability of
the coastal economy.
■
Multiple opportunities across key blue economy sectors will emerge to coop with challenges and steer a
change of course. In fish processing, innovation and integration with tourism can open new markets, par-
ticularly in the EU. Fisheries and aquaculture can grow through technological enhancements and sustain-
able practices, supported by public and EU funding. The shipbuilding sector, though challenged by global
competition, can rejuvenate through investment in innovation and targeting new market segments, such as
technology. Coastal tourism can grow sustainably through infrastructure development and diversification
beyond traditional hotspots, including through synergies with local agriculture. Furthermore, new segments
of the blue economy can boost the local and national economy by utilizing the marine assets in sustainable
and innovative ways.
Natural and Human-induced the mainland is subjected to higher precipitation
conditions. In the northern Adriatic, the reduction
Threats to the Adriatic Marine
in precipitation amount is evident in all seasons. The
and Coastal Environment northeastern Mediterranean, which comprises Adri-
Climate Change Vulnerability atic-Ionian Croatia, heat waves have become more
frequent, longer lasting, and more severe.93 All over
Croatia is part of the southeast European subre- the coast, due to climate change, the usual climate
gion which is exposed to complex climate vari- patterns are changing toward more unpredict-
abilities. Most of the country has a Mediterranean able seasons. Changes in rainfall and evaporation
climate with hot and dry sunny summers and rela- for Croatia could potentially decrease the reliability
tively mild yet rainy winters, especially in the coastal of groundwater and surface water sources during
area. Dalmatia is already experiencing fall seasons droughts or prolonged dry seasons.
with declining winter and spring precipitation. Par-
ticularly, the mountainous region and the coastal Croatia is vulnerable to climate change impacts
zone are mostly affected by decreasing precipitation and ranks 51 out of 181 countries in the 2020 ND-
during the summer season (May to October), while GAIN Index. The ND-GAIN Index94 ranks 181 coun-
__________________________
93 Climate Adapt. 2021. “Adriatic-Ionian Area.” URL: https://climate-adapt.eea.europa.eu/countries-regions/transnational-regions/ adriatic-ionian
94 University of Notre Dame. 2020. “Notre Dame Global Adaptation Initiative.” URL: https://gain.nd.edu/our-work/country-index/. This index aims to
help businesses and the public sector better identify vulnerability and readiness to better prioritize investment for more efficient responses to
global challenges.
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59
Charting Croatia‘s Blue Economy Pathways
Chapter 3
tries using a score which calculates a country’s risk due to coastal flooding.97 Long-term climate
vulnerability to climate change and other global vulnerability could cause tourists to avoid hot desti-
challenges as well as their readiness to improve re- nations in favor of cooler locations to the north and
silience. The more vulnerable a country is the low- thus affect local communities, depending solely
er its score, while the more ready a country is to on beach tourism. Conversely, climate change may
improve its resilience the higher it will be. Norway benefit the coastal areas by prolonging the tourist
has the highest score and is ranked 1. Croatia sub- season or creating two seasons for visitors—spring
mitted95 the Updated Nationally Determined Con- and autumn.
tributions (NDC) to the United Nations Framework
Among the effects potentially increasing climate
Convention on Climate Change (UNFCCC) as an EU
variability are health and equity implications.
member state in 2020. The country’s adaptation pri-
Hot and dry summers with increased night and
orities include availability and accessibility of water
day temperatures and frequent occurrence of heat
for drinking and irrigation uses, coast and coastal
waves will pose a serious threat to human health,
zones, forestry and land use change, agriculture,
particularly for highly vulnerable groups: children,
biodiversity, and human health.
elderly, and chronically ill people more susceptible
The Croatian Adriatic coast is prone to the global to heat stress, air pollution, and more vulnerable to
sea-level rise due to climate change. Particularly weather events given mobility issues.
at risk from sea-level rise are Croatia’s low islands
As a result of climate change, summer rainfall
such as Krapanj (only 1.5 m above sea level) and
along the coastal areas of Croatia is expected to
river deltas (that is, the Neretva River delta) which
decrease by 7 percent in 2040, and 16 percent in
includes large areas of agricultural land which are
2070, and up to 25 percent in some locations in
vulnerable to coastal flooding as well as salinization.
2070. At the same time, summer air temperature is
The Dynamic Interactive Vulnerability Assessment
expected to increase by 1.3°C in 2040 or 2.4°C in 2070
(DIVA)96 carried out for the coastal zone of Croatia
(World Bank 2022a, 209). It is expected that Croa-
shows that the impacts of sea-level rise in Croatia
tia will become hotter and drier, especially in the
will be substantial during the 21st century if no ad-
summer. Western and specifically southern areas
aptation measures are taken. The area of Croatian
in the Adriatic will experience a significant reduc-
coastal zone exposed to the 1-in-100-year coastal
tion in water supply (Willaarts et al. 2022, 8–9) and a
extreme water level will increase from the current
risk of interannual and seasonal water variability. A
240 km2 to 320–360 km2 in the late 21st century. The
decrease in precipitation levels in the Adriatic part
expected number of people affected by flooding
during the summer months is predicted (Willaarts
annually will increase from 17,000 in 2010 to 43,000–
et al. 2022, 45) with associated negative impacts
128,000 in 2100 and the expected annual damages
on the availability of freshwater. Also, saltwater in-
from US$40 million in 2010 to 0.9–8.9 billion per year
trusion into groundwater is expected (World Bank,
in 2100.
2022a, 209; World Bank 2019, 27). The most vulnera-
Notably, nearly a quarter of the Croatian econo- ble areas in terms of water availability are Zadar, Du-
my is based on sectors potentially vulnerable to brovnik, Labin, Krk, Šibenik, Split, and Brač (World
climate change and extreme weather, including Bank 2022a, 210). There is an increased risk of water
agriculture and tourism. The tourism sector which shortages for water supply, consequently constrain-
generates a significant share of GDP could experi- ing the growth prospects of key blue economy sec-
ence serious economic consequences due to high- tors, such as tourism. Adapting to climate change
er temperatures, increased flooding, and sea storm challenge calls for increased efficiency of the use of
frequency. Tourism infrastructure may also be at water resources.
__________________________
95 Croatia submitted its Seventh National Communication (NC7) and Third Biennial Report of The Republic of Croatia Under the UNFCCC in 2018.
https://unfccc.int/sites/default/files/resource/2671905483_Croatia-NC7-BR3-2-96481035_Croatia-NC7-BR3-2-7.%20NC%20i%203.%20BR_resubmis -
sion_IX_2018_0.pdf.
96 MEDPARTNESHIP PAP/RAC Presentation for the REGIONAL WORKSHOP ON CLIMATE CHANGE ADAPTATION IN MEDITERRANEAN COASTAL
AREAS, Athens 2015.
97 Climate Risk Profile: Croatia (2021): The World Bank Group.
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60 Charting Croatia‘s Blue Economy Pathways
Chapter 3
© Benan Berhan
Croatia receives an average of 18–20 million tour- 2100 (between 0.05 percent and 1.08 percent). The
ists annually, which is five times the country’s climate change impacts could prolong the tourist
population. Most tourists visit the coastal areas season and shift tourism from sea-sun-and-sand
during the summer season (Willaarts et al. 2022, to other attractions because of high temperatures
21) when water demands reach their peak. The and potential health hazards. While future estima-
Zadar and Split region and islands are exposed to tions of climate change impacts on tourism from
significant pressures from water abstraction due water availability, invasive species, pollution affect-
to a sharp seasonal increase in water consumption ing critical habitats like Posidonia meadows, would
(World Bank 2022b, 16). The water sector in Croatia benefit from an in-depth vulnerability assessment,
needs further investments in flood defense and a there is an obvious need for strengthening the re-
more integrated approach to water resources man- silience of the coastal and marine ecosystems. The
agement. Shortages of water are expected in the water resources in the Adriatic water management
long run during the cultivation period and the tour- district on which 2,091 settlements99 depend could
ist season when water requirements reach the peak
be affected by climate change impacts. While the
demand.
structure of future blue economy of Croatia is hard
In the Mediterranean region, temperatures are to predict in the absence of an official stance on the
going up 20 percent faster than the global aver- issue, developing a strategic vision and a roadmap
age.98 Under almost all climate scenarios for Europe, could chart new avenues for Adriatic Croatia. In the
the climate change impacts could cause a dramat- meantime, while markets continue to rule, and in-
ic drop of tourism arrivals in southern European vestment directions continue to be shaped by EU
countries (more than 7 percent in Greece and more policies, the imperative of embracing sustainability
than 8 percent in Cyprus). On the contrary, Croatian goals for the coastal and marine economy of Croa-
coastal tourism could exhibit a modest rise until tia will prevail.
__________________________
The Climate Change effect in the Mediterranean. Six stories from an Overheating Sea” WWF Mediterranean Marine Initiative, Rome, Italy, 2021.
98 “
ater District Management Plan 2016–2021. OG ‘Narodne Novine’ 66/2016.
99 W
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61
Charting Croatia‘s Blue Economy Pathways
Chapter 3
Municipal Solid Waste Figure 23. Municipal Waste per Inhabitant in
Adriatic Croatia
In 2018 the European Commission published an
early warning report for member states at risk 800
700
of missing the 2020 target of 50 percent prepa-
kg/inhabitant
600
500
ration for re-use/recycling for municipal waste. 400
Croatia was flagged as one of the countries miss- 300
200
ing the 2020 targets. Key findings presented in the 100
0
early warning report for Croatia100 (SWD 2018, 414
Primorje-Gorski kotar
County
Lika-Senj County
Zadar County
Šibenik-Knin County
Split-Dalmatia County
Dubrovnik-Neretva County
Istria
Final) are as follows: the recycling rate in 2016 (in-
cluding composting) reported to Eurostat was 21
percent. The rate of municipal waste landfilling was
77 percent, making it among the highest in the EU.
Croatia failed to effectively implement separate col-
lection of recyclables, including biowaste; econom-
ic incentives for citizens and municipalities are not Naslov osi
yet in place; the extended producer responsibility Municipal waste per inhabitant RC
schemes in Croatia do not fully cover the costs of
separate collection; and more investment is need- Source: Adjusted by Authors from the MESD of the Republic of
ed in projects higher up the waste hierarchy that go Croatia. (2022). Report on Municipal Waste for the Year 2021, p. 27.
beyond the treatment of residual waste.
The waste produced in the coastal counties ex- indicate that the most stressed areas are those af-
ceeds the national average of 454 kg/year/inhab- fected by waste brought in from the open sea.
itant in 2021. The main source of municipal solid Monitoring of solid waste accumulated on the
waste exceeding the national average is tourism in seabed confirms that plastics are the prevalent
the coastal areas (Figure 23). category of waste. The highest total amount of
The estimated annual cost and economic dam- solid waste on the seabed was recorded by a mon-
itoring station in the northern Adriatic. The areas
age due to marine litter and associated harmful
that are more heavily affected by waste from the
impacts on the marine ecosystems in Croatia is
open sea are more heavily loaded. The 2021 find-
€21 million.101 The most common waste leaked into
ings on the concentrations of microplastics on the
the Adriatic Sea is single-use plastics from pack-
sea surface mirror the trend of multiyear research.
aging, followed by fishing nets, ropes, hygiene
It indicates that the values in the central and south-
items, cigarette butts, most being washed ashore
ern Adriatic do not exceed 20,000 N/km2, while in
(Republic of Croatia, MESD, 2023). The monitoring
the northern Adriatic the concentrations are high-
results of marine litter102 in 2021, indicate that the
er and have a greater variability. per station.
share of plastic materials washed ashore is 97 per-
cent. The usual plastic objects were pieces of plas- The Draft Waste Management Plan 2023–2028
tics – 35 percent, bags – 13 percent, caps from plas- of Croatia has provisions for reducing single-use
tic bottles – 12 percent, and hygiene ear sticks – 6.7 plastic products, light plastic bags, packaging
percent. The Clean Coast Index (CCI) which mea- waste, increasing the recycling rate, and im-
sures the amount of plastic waste is an indicator proving wastewater treatment to prevent the
of beach cleanliness (less plastic waste = cleaner creation of marine litter. Croatia has defined the
beach), for the location of Nin is 1.20, for Prapratna areas for EU financial support for the next planning
6.73, while for Stončica it is 77.605. These results period 2023–2028 as follows:
__________________________
100 h ttps://environment.ec.europa.eu/topics/waste-and-recycling/waste-framework-directive_en.
orld Bank. 2012. Croatia CoED Report.
101 W
102 O fficial portal of the MoESD IOR: http://baltazar.izor.hr/azopub/bindex.
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62 Charting Croatia‘s Blue Economy Pathways
Chapter 3
stablishing a sludge management system;
■ E coastal agglomerations is expected by the end of
2024. Since wastewater flows in the coastal areas
dentifying the locations and sources of marine
■ I increase seasonally, large WWT plants could be un-
waste and identifying locations of accumulated derutilized outside the high season. An alternative
marine waste on the seabed; to avoid investments in oversized treatment ca-
■ E
stablishing a system of prevention, collection, pacity which entails high operational and manage-
and disposal of marine waste, as an integral part ment cost, would be the natural treatment (green
of the waste management system; and and grey wastewater infrastructure) for treating
effluents during peak season and to ensure the
nterventions for collection and disposal of marine
■ I discharge flows meet the environmental require-
waste. ments (Willaarts et al. 2022, 112–113). Based on re-
sults from the monitoring,106 it is assumed that the
Municipal Wastewater coastal bathing waters have not been affected by
direct discharges of urban wastewater. About 95.6
Implementation of the UWWTD103 is facing chal-
percent of the monitored bathing waters in Croatia
lenges in the coastal areas of Croatia. Overall,
are coastal waters (894 out of 935 bathing waters).
66 percent of the urban wastewaters in Croatia
Based on the available information for 2021, more
are treated before releasing into the water bodies.
than 95 percent of the bathing waters are of ‘excel-
This is below the EU average of 76 percent.104 Dis-
lent’ quality.
charges without tertiary treatment are frequent in
the counties of Šibenik-Knin and Split-Dalmatia. In
2022, there were 186 wastewater treatment (WWT) Pressures from Tourism Industry
plants across the country. In the coastal areas, pri-
The 2023 Sustainable Tourism Development
mary treatment of wastewater is the prevalent
(STD) Strategy107 of Croatia points to several im-
treatment technology.
pacts on the tourism sector. Tourist activities in-
crease the pressures on marine ecosystems and
Table 6. Croatia’s Wastewater Treatment Plants biodiversity (from sudden pollution of the marine
2022 environment, waste leakage, and noise). Coastal
habitats are particularly threatened from construc-
Tertiary treatment Secondary Primary tion, backfilling, municipal waste, and recreational
(nitrogen [N] treatment treatment activities. In the long run, accumulated pressures
and phosphorus could alter the marine ecosystems especially during
[P] removal) the high tourist season in the absence of effective
conservation measures. Different tourism markets/
30 90 66
products/activities have different environmental
Source: Croatian Bureau of Statistics, Public Sewage System, and carbon footprints. For instance, sea cruises are
2022, first release. among the most polluting and low-value tourism
segments, while sailing may have low carbon but
some pollution, wind-powered water sports have
Coastal areas are under seasonal pressure from low environmental impacts and carbon footprint.
untreated sewage. Croatia lags the necessary in-
vestments in sewage and wastewater treatment Most municipal solid waste (MSW) generated by
infrastructure along the Adriatic coast.105 Commis- tourists is during the months of July and August,
sioning of the secondary WWT plants in the main when waste management reaches its limited ca-
__________________________
he Urban Wastewater Treatment Directive (UWWTD) (Council Directive 91/271/EEC), revised in 2022, is one of the key policy instruments under
103 T
the EU water acquis.
104 https://water.europa.eu/freshwater/countries/uwwt/croatia.
raft Water Management Plan of Republic of Croatia, 2023 (443–444).
105 D
inistry of Economy and Sustainable Development, https://mingor.gov.hr/o-ministarstvu-1065/djelokrug/uprava-vodnoga-gospodarstva-i-zas-
106 M
tite-mora-2033/kakvoca-mora-za-kupanje-na-plazama-hrvatskog-jadrana/1450.
epublic of Croatia Sustainable Tourism Development Strategy, OG 2/2023.
107 R
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63
Charting Croatia‘s Blue Economy Pathways
Chapter 3
pacity. Total annual MSW on islands without bridge
connections and without landfills is approximately
24,000 tons, equivalent to 1.3 percent of the total
produced waste in Croatia.108 Overall, at least 5 per-
cent of national waste is produced on all islands in
Croatia, while less than 0.7 percent of Croatia’s pop-
ulation lives permanently on these islands (World
Bank 2021).
About 92.5 percent of all tourist accommodation
facilities are on the Adriatic coast. Due to excess
tourist demand and the rise in real estate prices,
local population in the old city centers vacate and
leave their dwellings exclusively for tourists. About
55 percent of survey109 respondents believe that the
cost of living of the local population has increased
due to expansion of tourism. The STD strategy rec-
ommends stricter regulation and enforcement of
spatial planning and construction laws to reduce
the negative impact of advanced coastal urbaniza- © Benan Berhan
tion.
Traditionally, tourist visitors are concentrated
The 2030 STD strategy promotes actions for (a)
in the four summer months and mostly in the
reducing the burden from tourism on environ-
coastal zone. According to the STD strategy, the
ment and nature, (b) reducing the negative impact
most common reason for tourists to visit Croatia
of tourism on the space, and (c) addressing negative
is the sea (81.5 percent) and nature (56.2 percent).
impact on tourism from climate change. Further-
Croatia has 6.7 m2 of beach space per bather with
more, the implementation of integrated manage-
an estimated pressure of 1 million bathers per day.
ment of the coastal area, integration of less-devel-
Crowding of beaches is the key reason for tourists’
oped tourism areas, and fostering the integration
dissatisfaction during their stay. Croatia has one of
of coastal tourism with the tourism activities in the
the highest numbers of charter fleet in the world
hinterland will reduce the burden on coastal tour-
and comprises approximately 40 percent of the
ism. Coastal activities which could have a positive
global charter market.110
multiplier effect on other sectors, such as fishing
Croatia’s coastline with its lengthy accessible and agriculture through the development of special
coast, clear sea, and attractive archipelago offers tourist products need further support. The strategy
favorable conditions for nautical tourism. Howev- further promotes greater use of renewable energy
er, the nautical infrastructure needs improvements sources and energy efficiency in accommodation
for adequate reception and treatment of waste- facilities and tourist infrastructure, as well as in traf-
waters from boats and for protection of Posidonia fic. This contributes to Croatia’s effort to combat
oceanica seagrass meadows which are extremely the impacts of climate change. There are also plans
endangered in the Mediterranean region due to to expand the use of rail transport and other forms
anchoring. The impacts of nautical tourism are well which are more environmentally friendly. Croatia
recognized in the commitment to the strategic sec- can choose to focus on low-impact and high-value
tor development goal ‘Tourism with preserved envi- tourism products and segments as part of its blue
ronment, space and climate’. economy strategy.
__________________________
108 W orld Bank. 2021. Croatia Cost of Environmental Degradation.
109 TOMAS. 2019. “Survey on Attitudes and Expenditures of Tourists in Croatia.“ Institute for Tourism, Croatia.
Ministry of Sea, Transport and Infrastructure 2023;
110
https://mmpi.gov.hr/vijesti-8/svecano-otvoren-25-medjunarodni-nauticki-sajam-biograd-boat-show/24216.
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64 Charting Croatia‘s Blue Economy Pathways
Chapter 3
Despite the economic benefits, coastal and ma- dential housing and the loss of agricultural land,
rine tourism is associated with negative con- high-value natural farming, and natural habitats
sequences. Overutilization of natural spaces for and ecoservices.
capacity development and pressures on infrastruc-
ture from large number of tourists within a short According to the CBS, the utilized agricultur-
seasonal period act as stressors. On one hand, sell- al land112 in Adriatic Croatia decreased from
ing quality nautical tourism experience depends 456,741 ha in 2017 to 441,105 ha in 2021. Accord-
largely on the baseline environmental factors. On ing to the Agriculture Census (2020), the surface
the other hand, sustainable nautical tourism is im- of unutilized agricultural land amounts to 19,909
portant for the protection of the marine and coastal ha, which represents 53 percent of the unutilized
environment, as well as for the stimulation of envi- agriculture land of the Republic of Croatia. In 2021,
ronmental awareness in tourists and the local pop- the agriculture sector of Adriatic Croatia generat-
ulation. Therefore, the tourism strategies and mea- ed GVA equal to €65.43 million, that is, 4.5 percent
sures for extending the tourist season and reducing of GVA of the agriculture production at the nation-
the negative impacts may need to factor in multi- al level. In terms of agriculture production value,
ple considerations such as density and intensity of the GVA growth rate (2021/2020) in Adriatic Croatia
tourism activities, opportunity cost of the valuable was the lowest in Croatia—equal to 2.3 percent.
land and natural capital, social impacts to local
Agriculture has been regaining importance
communities from rising real estate prices, lead-
during the last few decades, especially in terms
ing to the emigration of young people from tourist
of organic production. In Croatia, 31 percent of
(urban) areas, and emerging of ‘ghosts’ areas in city
the total land that is under organic farming is in
cores outside the season.
Adriatic Croatia, along with additional 46 percent
in conversion to organic farming. Coastal agricul-
Urbanization and Land Use ture and cultivation of local crops (for example,
grapes, olive production, almonds, citrus fruits,
Adriatic Croatia is home to 33.54 percent of the
population of Croatia.111 The aesthetic values of and figs)113 is highly important for the sustainable
and economic opportunities on the coast attract development of the coastal zone, for tourism and
many businesses. Excessive construction and un- agricultural exports. The soil in the hinterland of
controlled development along the coast is only Adriatic Croatia is relatively cleaner than elsewhere
one of the consequences of excessive urban de- in the country and suitable for organic farming. In-
velopment, affecting the physical, biological, eco- deed, the potential for organic farming (provided
nomic, and social processes in the coastal space. strict monitoring of agricultural techniques and
Land is a nonrenewable resource under immense land use planning), is high due to the short supply
pressure in many coastal counties. An analysis chains and value added that could boost both sec-
of the Croatian coastal zone and pressures from tors. This is also acknowledged in the EGD strategy,
residential housing and tourist infrastructure on as well as the strategy for industrial transformation
available land applied the so called ‘land-take’ of Adriatic Croatia. Further urbanization pressure
indicator, pointing that “environmental conse- could compromise the prospects to use agricul-
quences could be significant in terms of deteri- ture as an avenue for diversifying tourist products
orating landscapes, overuse of local and regional and the coastal economy. Therefore, a more bal-
water resources and wastewater discharged in the anced land use and spatial planning which inte-
karstic underground and into the sea” (Kružić and grates ecosystem impacts and mitigates the risks
Povh Škugor 2015). The same analysis questions of loss of nonrenewable natural capital could help
the trade-offs between potential gains from resi- avoid potential loss of natural value.
__________________________
opulations Census 2021.
111 P
112 Utilized agriculture area consists of arable land, kitchen gardens, permanent grassland, and meadow and permanent crops.
113 Spatial Development Strategy of Republic of Croatia October 2017. https://narodne-novine.nn.hr/eli/sluzbeni/2017/106/2423.
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65
Charting Croatia‘s Blue Economy Pathways
Chapter 3
Recent upward urbanization is a consequence greater than 2. Notably, the number of house-
of fragmented approach to development, weak holds has decreased by 4.6 percent; the number
enforcement of local regulations and coordina- of inhabitants has decreased by almost 8 percent,
tion of stakeholders’ interests. A particular prob- while the number of housing units has increased
lem is the increasing number of seasonal housing by more than 8 percent (in relation to the 2011 Pop-
units built in violation of spatial standards, with ulation Census). Such findings call for a revisiting
questionable quality and design. Many apartment of the spatial planning in the coastal area, particu-
buildings are for seasonal use thus affecting the larly taking into account the increasing pressures
traditional societal linkages within local communi- on the coastal and marine ecosystems. The high-
ties and their development aspirations. The “land- est ratio between housing units and households
take” indicator114 relevant to growth of households is in Lika-Senj, Zadar and Šibenik-Knin counties.
and housing units per unit of regulated land, A considerable increase of the ratio is observed in
points out that the number of housing units sur- Istria, while the ratio in Primorje-Gorski kotar has
passes the number of households in Croatia (Fig- decreased below the national values. These trends
ure 24). In 2021, the housing units/household ratio need further analysis to inform spatial develop-
for Croatia was 1.47 and for Adriatic Croatia it was ment policies.
Figure 24. Housing Units Versus Households by Counties in 2011 and 2021
Adriatic Split-Dalmatia Primorje- Lika-Senj Zadar County Šibenik-Knin Dubrovnik- Istria County
Croatia County Gorski Kotar County County Neretva
County County.
00,511,522,53Housing units / households ratio 2011 Housing units / households ratio 2021
Housing units / households ratio RH 2011 Housing units / households ratio RH 2021
Source: CBS.
Environmental Health of Coastal work Directive (MSFD). The MSFD contains 11 de-
scriptors of good environmental status (D) which
and Marine Ecosystems
are evaluated by different criteria. The updated
The need for better governance of human activ- analysis of GES by descriptors is reported in Updat-
ities in the coastal and maritime space is widely ed documents of Marine Environment and Coastal
recognized by the Government of Croatia in the Zone Management Strategy of Republic of Croatia115
Marine Environment and Coastal Zone Manage- (Table 7). The European Commission (2022 a,b, 15)
ment Strategy (not validated by the Parliament assessed the level of adequacy of GES assessment
yet). Protection of the Croatian marine resources is with regard to the criteria and methodology on GES
guided by two EU directives: the Water Framework of marine waters (Figure 25).
Directive (WFD) and the Marine Strategy Frame-
__________________________
U Environmental Agency uses the land-take indicator for measuring the change in agricultural, forest, and other semi-natural land taken for
114 E
urban and other artificial land development. ‘Land-take’ includes areas sealed by construction and urban infrastructure, as well as urban green
areas, and sport and leisure facilities. This indicator measures how EU Directive 2014/52/EU has been implemented at the national level and stip-
ulates that Environmental Impact Assessment (EIA) should consider ‘land’ in addition to ‘soil’, thereby opening the possibility that EIAs will play a
more significant role in curbing land-take.
Republic of Croatia, 2014. Maritime development and Integrated Maritime Policy Strategy of the Republic of Croatia for the period 2014-2020.
115
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66 Charting Croatia‘s Blue Economy Pathways
Chapter 3
Table 7. Updated Documents of Marine Environment and Coastal Zone Management Strategy
Descriptor Summary
Biodiversity (D1) GES partly achieved
Non-indigenous species (D2) GES is not determined
The population of commercial fish species is healthy (D3) Overfishing
Elements of food webs (D4) GES is maintained
Eutrophication is minimized (D5) GES is maintained
The sea floor integrity (D6) Additional monitoring needed
Permanent alternations of hydrographic conditions (D7) Additional monitoring needed
Concentrations of contaminants (D8) GES partially achieved
Contaminants in seafood (D9) GES is maintained
Marine litter (D10) Additional monitoring needed
Introduction of energy (including underwater noise) (D11) Additional monitoring needed
Source: European Commission (2022, 15).
Figure 25. Adequacy of Assessment of GES by Croatia (Mediterranean Adriatic Region) with Criteria
Set Out in Article 9 of the Commission GES Decision (based on 2018 reporting)
100% Article 9
90% D1-M Mammals
80% D1-B Birds
70% D2 Non-indigenous species
D3 Commercial fish and shellfish
60%
D4 Food webs
50%
D5 Eutrophication
40% D6 Sea-floor integrity
30% D7 Hydrographical changes
20% D8 Contaminants
10% D9 Contaminants in seafood
0%
D10 Litter
D11 Energy, incl. underwater noise
D1-B
D1-M
D2
D3
D4
D5
D6
D7
D8
D9
D10
D11
Adequacy score: D1-Very poor D2-Poor D3-Good 4-Very good
Source: European Commission (2022, 15).
The EC recommended priority actions for achiev- ber states sharing the same marine (sub)region to
ing GES which include the following: (a) improv- address predominant pressures. Specific aspects
ing the status of descriptors that were assessed as of ‘state and pressures’ to the marine environment
very poor; (b) implementing the EC’s recommen- are further presented in Annex 6 based on the
dations regarding the preparation of marine strat- findings of the updated background documents
egies, including an assessment, GES determina- to the Marine Environment and Coastal Zone Man-
tion and establishment of environmental targets; agement Strategy (Republic of Croatia 2021).
and (c) ensuring regional cooperation with mem-
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67
Charting Croatia‘s Blue Economy Pathways
Chapter 3
User Conflicts and Synergies of the quality of life of people living on the coast
and visitors, avoiding environmental and ecosys-
Blue economy sectors often face challenges tem changes and destruction of natural capital,
from competition over the use of marine re- and preserving the coasts and islands from exces-
sources which could be addressed through sive construction. It is necessary to evaluate the
planning based on sectorial synergies. Blue development potential of planned tourist zones
economy sectors share a strategic backbone: they and reconsider the compliance of spatial plans
all depend on the exploration and exploitation of of local and regional self-government units with
marine natural capital inputs for their processes. investment needs in tourism. Given the existing
Understanding the links between economic ac- trends and planned activities outlined in various
tivities and the status and value of natural coastal sectoral planning documents, it is expected that
and marine systems can enable smarter economic pressures on coastal and maritime space will in-
decisions, investments and conservation support tensify.
that benefit both tourism businesses and help sus-
tain the coastal economy. Transition to blue econ- Commercial fishing is a classic example of re-
omy could lead to conflicts over the use of coastal source competition with other maritime activi-
and marine space. For instance, conflicts related ties. This is particularly true with respect to coastal
to recreational boating are linked to overcrowd- tourism, shipping, offshore oil and gas. Aquaculture
ing, space restriction, and safety hazards. Boating also may compete for access to space with coast-
may compete with other recreational activities (for al tourism, ports, shipping, offshore oil and gas,
example, swimming) or with other types of boating and fishing. The synergies between tourism and
(for example, sailboats, motorized vessels, person- aquaculture could reinforce the sectors’ economic
al watercrafts). However, codes of conduct, prop- benefits. For instance, efforts from other sectors to
er planning, and good communication between protect the marine environment could increase the
users can minimize these conflicts. Other potential business prospects of the aquaculture sector. Host-
conflicts are related to areas where boating may ing tourists on aquaculture vessels to visit farming
not occur due to the presence of other blue sector plants and learn about aquaculture techniques and
infrastructures (for example, aquaculture farms, fishing traditions could offer tourist products with
oil and gas platforms). educational and recreational value. Another exam-
ple of mutually beneficial impacts between aqua-
Spatial development plans of coastal counties culture plants and coastal tourism is the setting of
provide for expansion of existing capacity and seafood-processing factories close to tourist resorts
the construction of new reception capacities.116 and with food supply chains.
New capacity is foreseen in about 300 potential
locations for more than 33,000 new berths. The Exploration and exploitation of hydrocarbons in
adopted scenario for nautical tourism foresees an the Adriatic Sea may affect other human activ-
increase of additional 15,000 vessels and 15,000 ities and the marine environment (MESD 2015).
nautical berths in the next decade.117 It is necessary Such activities are limited and prohibited in some
to re-examine these planned locations and capac- locations to protect the ecosystems and marine
ities in marine spatial plans in conjunction with protected areas, attractive sites for nautical tourism,
terrestrial spatial plans with an objective to re- fishing, spawning and fish breeding grounds, the
duce the already rising pressures on the coast, sea, Jabuka pit with a surface area of 305,38 km2 from
and islands, and creating spatial preconditions for disturbances to whales and sea turtles. It is sug-
avoiding user development conflicts. This includes gested not to undertake exploration at more than
creating conditions for new types of tourist expe- three sites at a time due to cumulative underwater
riences by reducing the potential disturbances noise effects. Wind farms also can have significant
__________________________
inistry of Physical Planning, Construction and State Assets. 2021. The Report on the Spatial Situation in the Republic of Croatia for the Period
116 M
2013–2019.
autical Tourism Development Strategy for the Period 2009-2019.
117 N
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68 Charting Croatia‘s Blue Economy Pathways
Chapter 3
synergies as well as conflicts with the other activ- (business), ports and local tourism stakeholders,
ities in the sea. On one hand, offshore wind farms and municipalities (destinations) to resolve con-
may contribute to energy security, on the other flicts (for example, traffic congestion, noise, air and
hand they may cause habitat changes and distur- marine pollution), enhance synergies, exchange
bances as a result of the electromagnetic fields of best practice, encourage innovation and compet-
submarine cables. itiveness, and craft joint strategies for sustainable
development.
Structural transformation of the mariculture sec-
tor could benefit from tighter economic links be- Marine spatial planning (MSP) can provide valu-
tween mariculture and other bio-industries and able insights for designing proper governance
their value chains. Creation of new income oppor- framework capable to deal with inter-sectorial
tunities and jobs and along the value chains of mari- interdependences. The economic sectors linked to
culture and related rural/coastal industries largely the sea are increasingly carrying out their activities
depends on the physical and marine planning as in adjacent or overlapping sea areas, thus sharing
well as the incentives and support schemes at na- inputs involved in their respective business pro-
tional and local levels. There is a need to address cesses. In this vein, interactions between sectors,
the current administrative flaws and fragmented businesses and economic actors become more and
jurisdiction in the coastal areas. Prolonged proce- more common and competition for land availability
dures and overlapping sector interests could result in port and coastal areas, as well as prospicient sea
in lost opportunities to open mariculture (support) areas becomes increasingly intense.
facilities and increased conflicts with other resource
users/sectors (tourism, construction, and so on). Marine and coastal areas are home to a wide
range of urban infrastructure. Urban areas and
Food production and tourism are both syner- tourist accommodation facilities need more ef-
getic sectors that could support future eco- forts and support to improve the water supply
nomic growth in coastal Croatia. The hotels and and wastewaters management, as well as waste
restaurants experience difficulties related to supply management. This is particularly important when
chains. A closer connection between these eco-
it comes to the old city centers, that are usual-
nomic sectors could open possibilities for replacing
ly under a special conservation regime (histor-
food imports with domestic production. To improve
ical cores in particular). Use of environmentally
the supply chain, stakeholders from these sectors
friendly products as well as promoting entrepre-
need support for removing bottlenecks and reduc-
neurial stakeholders with sustainable practices
ing market risks. For instance, turning to shorter
(such as restaurants offering locally grown food,
supply chains, reducing the number of intermedi-
shops with ecofriendly products) should be fos-
aries and local sourcing directly from food produc-
tered and beneficial to tourist value chains. The
ers could improve the quality of food services, thus
‘soft measures’ promoting procedures for attain-
making agriculture production cheaper and reduc-
ing eco-labels, especially those recognized at
ing the carbon footprint.
the EU level, such as more regional or destina-
Public sector could promote blue sector syner- tion-specific labels, could be on one hand, clearly
gies by adopting ‘soft’ measures, such as facili- communicating the sustainable operations of the
tating multisector dialogue between the relevant owners, and on the other hand, could significant-
stakeholder communities.118 A case in point are ly contribute to the destination branding of Cro-
the targeted sea-basin and pan-European cruise atian tourist products. However, the monitoring
dialogues promoted by the European Commis- and control mechanisms should be precisely de-
sion. They involve international cruise line operators fined and deployed.
__________________________
ttps://ec.europa.eu/maritimeaffairs/policy/coastal_tourism_en.
118 h
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69
Charting Croatia‘s Blue Economy Pathways
Chapter 3
To address the seasonal user conflicts arising from ergy. Increasing the resilience of the water systems
increased water consumption along with water-sav- is a priority for water supply development in Croatia
ings measures in the National Loss Reduction Ac- (World Bank 2022a, 209). Wider application of inno-
tion Plan (NLRAP), the possibility to use desalination vation will contribute to more efficient use of water
technologies and wider use of recycled wastewa- resources and renewable energy solutions as well
ter during periods of high demands could be ex- as introduction of circular economy business mod-
plored.119 However, desalination is an energy-inten- els in line with the EU Circular Economy Action Plan
sive technology which could affect endemic marine (World Bank 2022a). Increasing energy generation
ecosystems (for example, Possidonia meadows) from cleaner sources demands an increase in the
and is usually linked to considerable investment capacity of transmission and distribution networks
costs.120 The Croatian islands have many sunny days to address transmission network energy losses
which is an opportunity for more environmentally which was about 15 percent in 2021.121
friendly solutions such as increased use of solar en-
© Benan Berhan
__________________________
119 Willaarts et al. 2022, 18.
uttenberger 2017.
120 L
121 Energy Statistics, 2021; https://podaci.dzs.hr/media/rhdnfduh/si-1698_energetska-statistika-u-2021.pdf.
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70 Charting Croatia‘s Blue Economy Pathways
Chapter 3
Opportunities for Established Blue mentally friendly and community-based products
tailored to special-interest tourism niches represent
Economy Sectors
a window of opportunity. Tighter links with the rural
Addressing user conflicts and tapping in sector syn- economy in the coastal area will contribute to the
ergies creates opportunities to accelerate growth sustainability of the sector and will boost the rural
in the existing and emerging ‘blue’ sectors. Annex economies. There are already small-scale offerings
7 provides details on the SWOT (Strengths, Weak- of traditional homemade cuisine, tourism fishing,
nesses, Opportunities, and Threats) analysis in the and spa tourism. These could grow provided there is
established maritime sectors underpinning the dis- public sector support with the right incentives and
cussion on opportunities that can unleash sustain- engagement of all stakeholders (for example, fish-
able growth of Croatia’s blue economy across the ermen organizations, small business organizations,
key sectors. nongovernmental organizations [NGOs] working
with vulnerable groups). Tourist agencies and op-
erators need new forms of involvement. Instead of
Coastal and Marine Tourism
offering standard products like ‘a week at the sea’,
Coastal and marine tourism, as one of the most they could procreate new products and target new
mature economic sectors, makes consistent con- niches and market demands. They can foster local
tributions to the national economy. According to sustainability initiatives, marrying environmental
tourism satellite accounts for 2019, the tourism in- and social benefits (for example, vine tours through
dustry accounts for close to 25 percent of the overall vineyards and vineries promoting eco- and organ-
value added to Croatia’s economy, and the World ic production, eco- and rural tourism products, the
Travel and Tourism Council (WTTC) expects that this use of electric vehicles). Nautical tourism has direct
share will increase to above 30 percent by the end economic contributions to the national market and
of this decade. Yet, by improving the sustainability the so-called ‘invisible exports’. Nautical tourism
of natural resources and addressing multiple chal- could help decrease the seasonality and valoriza-
lenges, Croatia could take advantage of the growth tion of environmental and natural resources and, as
potential of tourism in the region. New environ- such, contribute to regional development.122
Figure 26. Trends of Coastal Tourism: Turnover, GVA, and Personnel Cost Per Person Employed (2009
and 2019)
Turnover per person em-
ployed (in k€) in 2009
GVA in k€ per employee in
2009
Personel cost per employe
in k€ in 2009
Turnover per person em-
ployed (in k€) in 2019
GVA in k€ per employee in
2019
Personel cost per employe
in k€ in 2019
Accommodation Other expenditure Transportatio
Source: EU BE Report 2022, Annex2, Summary tables.
__________________________
aveira, F.F., A. I. Correia, G. Silva, and J. Pereira. 2021. “The Potential of Nautical Tourism as a Strategic Product for Regional Tourism Develop-
122 T
ment: The Case of Alto Minho and Esposende, Northwest Portugal.” In: , edited by J. V. de Carvalho, A. Rocha, P. Liberato, A. Peña). ICOTTS 2020.
Smart Innovation, Systems and Technologies, vol 208. Springer, Singapore. https://doi.org/10.1007/978-981-33-4256-9_21
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71
Charting Croatia‘s Blue Economy Pathways
Chapter 3
The driving forces behind the development of the ratio of vacation rentals to population or total
established blue sectors have been identified housing units), requiring shore power use for all
using the four dimensions of SWOT analysis. cruise ships and motor boats.
Several issues that may hamper the development
(c) Developing tourism in an integrated man-
potential of tourism if not properly addressed were
determined. The weaknesses of the internal envi- ner within Croatia’s blue economy vision. Croatia
ronment mainly concern institutional incapacity for could invest in innovative data and statistics sys-
tourism product development and innovations in tems and in understanding the carbon footprint of
service provision. Threats are posed by external en- tourism markets and target the growth of low-car-
vironmental issues, climate vulnerability, and lack bon, low-impact, high-value markets. Improving
of infrastructure. The results of the SWOT analysis the ongoing carrying capacity assessment of coast-
could assist in the sector planning, coordination, al industry and development plans will define the
monitoring, and promotion of new activities (Annex limits of acceptable change for sensitive blue tour-
7). In the foreseeable future, tourism will remain a ism destinations and will link land use and spatial/
driving force of Croatia’s coastal economy. Taking marine planning and regulatory incentives to ad-
the blue economy path and charting a sustainable here to these limits. Croatia has already stepped
course would include the following: the efforts to control marine litter. Setting tourism
on the path to blue economy could be supported
(a) Increasing the spatial and temporal dis- by integrating the single-use plastics directive into
persal of tourism to reduce environmental and tourism policy making including targets and mon-
social pressures. Demand-side management itoring provisions, and regulation of tourism firms
could include measures for lowering negative im- (that is, banning single-use plastic bottles from the
pacts and carbon footprint of tourism by marketing catering industry and restaurants).
to lower-impact visitors who come off-season—that
is, long-stay visitors over the low season such as dig-
Fisheries and Aquaculture
ital nomads and retirees, incentivizing low-carbon,
off-season product development (that is, hosting Fisheries are highly sensitive to environmental
off-season events), building up niche sports offer- and anthropogenic pressures affecting marine
ings (wind-based watersports, mountain biking, living stocks. There are concerns that the Com-
cultural tourism, health tourism) all of which are mon Fisheries Policy (CFP) that aims to preserve
less seasonally dependent and have lower carbon stocks and impose stricter measures can, eventu-
footprints than cruises for example. ally, threaten the economic and social sustainability
of marine fisheries. The financial sources available
(b) Increasing the net-positive environmen- in support of CFP implementation that can be used
tal and social benefits of tourism by regulating to solve these problems as well as develop informa-
and planning for supply. This can be done by ex- tion and technology (IT) solutions where needed.
ploring nationally mandated sustainability certi- The long tradition in fishing and fisheries defining
fication for all tourism firms (see Türkiye Sustain- the life of small local communities along the coast
able Tourism industry Criteria (TR-I) example123); and islands is an asset for tourism development in
adding a high-season sustainable tourism levy to such rural areas.
be reinvested toward tourism sustainability initia-
tives; planning wastewater treatment plants/sys- The marine fisheries sector could tap into more
tems through nature-based solutions to include opportunities by cooperation with other blue
tourists as part of capacity calculations instead of economy sectors along the value chains. This will
only residents and reducing capital costs of treat- enable more efficient use of the available funds
ment; regulating vacation rentals to help mitigate (technical and administrative support, stronger
negative impacts on land use, cost, and social ex- role of Fisheries Local Action Groups [FLAGs] and
ternalities (for example, some municipalities cap producers’ organizations, and so on). Cooperation
__________________________
12.04.2022-V1 (tga.gov.tr).
123
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72 Charting Croatia‘s Blue Economy Pathways
Chapter 3
© Spencer Davis / Unsplash
among all stakeholders in marine fishing and with Croatia are generally rather low in comparison with
the R&D and IT sector could be beneficial for adopt- the EU. These actions will need effective coordina-
ing new methods in stock monitoring to support tion between relevant institutions and stakehold-
stocks management plans and enable more flexible ers, primarily through strategic planning using the
and adaptive management measures. Outstanding avenues of the MSP processes to determine and
problems with landing places and fish market in- demarcate the aquaculture zones for new devel-
frastructure could be resolved with the help of pub- opment. The cooperation with the R&D sector and
lic resources and leveraging private capital. While extension services will overcome methodological
there are no conflicting uses between tourism and and implementation bottlenecks. This includes low
small-scale marine fisheries, tourist recreation- interest among small producers in R&D and innova-
al fishing activities in permitted areas outside the tions which are deemed too expensive.
MPA could benefit both fisheries and biodiversity
conservation by reducing the time fishers allocate Fish Processing Industry
to fishing and by attracting visitors for wildlife and
Fostering the value chains between fisheries
seascape viewing. Annex 7 provides details on the
and aquaculture and the fish processing in-
SWOT analysis of the fisheries and aquaculture sec-
dustry is a development priority and an emerg-
tor.
ing trend in Croatia’s fish processing industry.
Given Croatia’s long tradition in mariculture, it Further coherence of marketing plans and inte-
will remain an important driver of the local econ- gration among the sector segments will result
omy. The ‘equitable governance’ approach em- in increased availability of domestic raw material
bedded in the blue economy principles could help for the processing industry and lower production
Croatia realize the growth opportunities of marine cost. At the same time, the fish processing indus-
aquaculture and diversify the income sources of try needs modernization, smarter energy solu-
coastal and island communities while supporting tions, and diversification of production in terms
broader economic development. While mariculture of new products and increased value added. To
highly depends on new technologies and fishmeal this end, more intensive and effective coopera-
availability to achieve efficient production, small tion with the R&D sector is needed, as well as co-
producers could be encouraged and incentivized to operation within the sector to draw benefits from
introduce innovations and make investments in ag- already existing good practices. Better coopera-
riculture and food production. These investments in tion with the tourism and the hospitality industry
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73
Charting Croatia‘s Blue Economy Pathways
Chapter 3
should increase sales in the domestic market of frastructure (for example, warehousing/charging
all fish and seafood products. stations along the coast and on islands), techni-
cal (vessel tanks) and transport safety equipment
The sector needs to engage in resource and phys-
on the sea (hydrogen), and smart on-shore boat
ical planning and MSP to secure space for nec-
services could boost the sector growth. While
essary infrastructure and facilities. Access to ca-
currently the production of ‘green’ vessels does
pacity building, extension services, and to low-cost
not seem profitable in passenger transportation,
funds (especially EU programs and other external
future options remain to be explored. The role of
sources) could fill in the skills gap and bring more
the R&D sector could fuel innovation and expand
capital investment. Fish processing cooperatives
and producer organizations need support for im- market opportunities. This includes recognizing
provements in the business conditions of the fish and responding to emerging market segments,
processing sector and resources. While fish pro- such as the military sector and maritime surveil-
cessing still depends heavily on raw materials from lance, fishing industry, to promote the growth of
domestic sources, these materials, especially pelag- the shipbuilding industry.
ic fish, could became scarce in the future, due to
Addressing the lagging workforce competences
overfishing and cessation of fishing activities. The
by turning to educational traditions could offer
dual challenge could be resolved in a manner that
more attractive and innovative jobs. It could re-
integrates sector efficiency strategy that assesses
verse the declining interest in working in small-
inputs (energy, water, and technology) and outputs
scale shipbuilding (in industry in general) by of-
(product type, consumer preference, and volumes of
fering specializations targeting digitalization and
product) and implementing a variety of value chain
innovations and prospects to work in the global
measures including more efficient resource utiliza-
market. Strengthening the collaboration with the
tion, implementing fish product cold storage, using
fishing industry by-products in an innovative man- R&D sector could spur innovative skills develop-
ner, reducing food waste and loss, reassessing fleet ment across the industry.
capacity for catching power and economic benefit, More targeted public support for innovation
and using ecolabeling of local fish food products for
clusters can help the sector to adapt to glob-
marketing to high-value segment tourists.
al transformations in shipbuilding and repair
and to remain competitive and responsive to
Shipbuilding and Repair changing demands. This includes fostering the
growth and advancement of start-up companies
The shipbuilding industry made progress in ex-
and SMEs, particularly in priority niches within the
panding in the small-scale segments for produc-
shipbuilding sector, by providing support and re-
tion of vessels in targeted market niches. Further
sources for innovation and development.
growth in a cluster with accompanying small-scale
industries (for example, refit services), production The blue economy innovations gain momen-
of engines and equipment, as well as large (cargo) tum in the established sectors and in the new
vessels may not present a long-term growth option emerging sectors such as sustainable marine
without public support and incentives due to the energy and biotechnology. The potential for de-
competition at the global market, primarily from velopment of emerging sectors of blue economy
East Asia shipyards. The existing ‘cluster policy’ (es-
in Croatia have yet to be studied further, togeth-
tablishing clusters of smart specialization) has not
er with the methodology for assessment of their
produced substantial results and needs incentives
impacts on marine ecosystem services and com-
for take-up by sector industries.
peting sectors. In the short run, studying the pros-
Building stronger ties between the shipbuild- pects of offshore blue energy and expanding the
ing industry and the emerging blue economy R&D for coastal engineering through soft protec-
sectors presents future opportunities especial- tion and nature-based measures could provide
ly through R&D and knowledge products. Sup- multiple benefits to the local economy and habitat
port to new production lines and necessary in- and ecoservices.
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74 Charting Croatia‘s Blue Economy Pathways
Chapter 3
Opportunities for Advancing Blue emphasizes the momentum, highlights strengths
such as Croatia’s favorable geographical position
Economy Transition
and abundant marine resources. It also under-
Croatia holds several promising economic sec- scores the traditional coastal sectors that contrib-
tors that can create more opportunities and un- ute to the economy. However, it brings attention to
leash Croatia’s blue economy potential. To tran- weaknesses like over-urbanization and seasonality
sition to sustainable ‘blue’ sectors aligned with the of tourism. Opportunities are seen in EU mem-
national development objectives, Croatia needs to bership and regional cooperation and the rising
foster their strengths, enable opportunities, ad- demand for ecofriendly products, while threats in-
dress weaknesses, and mitigate risks. The SWOT clude climate change impacts and global market
analysis of the blue economy of Croatia (Figure 27) volatility.
Figure 27. SWOT Analysis of the Blue Economy of Croatia
Strengths Weaknesses
avorable geographic location with
■ F larming demographic trends and over-
■ A
abundant high-quality marine resources urbanization of coastal areas hampering
■ ich cultural heritage alongside stable
R economic resilience
traditional coastal economic sectors ■ veruse of certain marine resources alongside
O
■ ood governance practices in fishing and
G seasonal and intensive tourism pressures
new technologies in mariculture and fish ■ nsufficient port infrastructure and
I
processing unsustainable coastal tourism growth
■ stablished legislative and institutional
E ■ ack of stakeholder cooperation in specific
L
framework for blue economy with some mariculture sectors and energy distribution
strategies and incentive programs in place limitations
■ onitoring and reporting mechanisms on
M ■ ow blue economy awareness, lack of strategic
L
the marine environment. framework, and unfavorable investment climate.
Opportunities Threats
U membership facilitating free movement
■ E ulnerability to the impacts of climate change
■ V
and funding opportunities ollution-induced changes in marine resources
■ P
■ ising demand for ecofriendly products and
R affecting the economy and urbanization
services, boosting blue economy sectors mbalance between resource capacities and
■ I
■ ntapped coastal and marine resources
U development needs
potential for mariculture and ocean energy lobal and regional market volatility along with
■ G
■ ew market niches within blue economy
N potential market distortions
sectors for both existing and new products/ ompliance with upcoming EU environmental
■ C
services regulations possibly causing market
■ nhanced stakeholder cooperation and
E disturbances and social affordability challenges.
strengthened value chains linking tourism
with fishery, mariculture, and agriculture
■ xpand stakeholders’ inclusion.
E
Croatia’s geographical features, nature settings, inhabited islands. All economic activities on the is-
regional economic structure and markets pro- lands contribute to the maritime economy while at
vide an insightful consideration for future plan- the same time their ecosystems could be subject
ning of resources. For example, Croatia has 30 to same threats and pressures at different scale.
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75
Charting Croatia‘s Blue Economy Pathways
Chapter 3
Taking a closer look at Croatia’s island economy Croatia’s blue economy transition needs a closer
could add more strengths to the blue economy look at the synergies, user conflicts to render them
and more opportunities which stand out. In addi- operational.
tion, there are economic activities taking place on
the coast, close to the sea, whose impact the ma- The public discourse on the opportunities and
rine environment may not be so obvious. These are risks associated with the blue economy sectors
agriculture, quarrying of stone and lime, cement is still fragmented and new to the Croatian pub-
production, and unregulated construction. While lic. A meaningful engagement of communities in
these activities may contribute insignificantly to shaping the blue economy path would mean bet-
the GDP, compared to tourism, they are locally im- ter understanding of the diverse development aspi-
portant. Some are part of the local tradition and rations of coastal communities. The good practice
are at the core of community livelihoods (especial- lessons point out that sustaining and revitalizing
ly on the islands). Industrial transformation in line the local economies and infrastructure through in-
with the EU Green deal and the availability of mar- clusive local development strategies that build on
itime resources will transform parts of the Adriatic synergies, resource endowment, all have the poten-
coast of Croatia. Therefore, looking at all aspects of tial to create more equitable opportunities and to
strategic development documents underpinning mitigate potential resource user conflicts.
Box 2. Croatia: Blue Economy Stakeholder Consultations – Focus Group Discussions
Blue Economy Focus Group Discussions in Croatia: Existing BE Sector Recommendations
In June 2023, in partnership with the Government of Croatia, the blue economy report team held focus
group discussions (FGDs) with stakeholders from five different sectors. The key question, “Is Croatia on
a path towards sustainable blue economy?” provoked interesting responses from stakeholders from
the Shipbuilding, ports and infrastructure, and maritime transport; Nonliving resources; Emerging sec-
tors; Living resources; and Tourism. Stakeholders participating in the FGDs covered most of the respec-
tive subsectors relevant for the Sustainable Blue Economy (SBE) in Croatia. During the discussions, the
following major points that impede the potential for the SBE were emphasized by the participants:
■ T here is a lack of vertical and horizontal coordination and integration between major sector stake-
holders, notably between the government and private sector, and between the administrative levels
of government.
■ T he question of ownership of the public maritime domain is the main factor that reduces the level of
potential investments in necessary coastal and marine infrastructure, resulting in conflicts between
the administrative levels of government, notably the state and major coastal cities.
■ S trategic thinking on major BE sectors is mainly confined within sectors, rarely stepping outside the
silo. Furthermore, strategies and action plans are not always implemented, which results in resource
use conflicts, such as between industrial activities and urban development, coastal tourism and
fisheries, overconsumption of coastal space for urban (tourism) development, and so on.
■ S ome traditional and once strong sectors have been significantly reduced in size. Shipbuilding, for
example, is specializing in niche production but faces considerable lack of qualified workforce.
■ F isheries is still relatively strong but is threatened by the lack of coastal infrastructure and adequate
workforce.
■ T he use of marine areas for renewable energy production is still in an early phase of development.
However, the coastal land has been increasingly used for renewable energy production, but its ca-
pacities are limited due to inadequate transmission and distribution systems.
■ T ourism is experiencing strong post-COVID growth but is being threatened by overuse in some
coastal locations, such as Split and Dubrovnik.
Source: Authors.
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76 Charting Croatia‘s Blue Economy Pathways
Chapter 3
Croatia needs make considerable and sustained ef-
forts to comply with the EU environmental and cli-
mate change/energy acquis, requiring it to rethink
the recently defined “the most relevant and prom-
ising activities” and areas and recommendations to
enable the fulfillment of Croatia’s Blue Growth po-
tentia124 to factor in natural capital and ecosystem
considerations and cross sectoral impacts on the
blue resources.
__________________________
Maritime Spatial Planning Country Information- Croatia, issued by the Ministry of Physical Planning, Construction and Spatial Development of Croa-
124
tia (February 2022). (https://maritime-spatial planning.ec.europa.eu/sites/default/files/download/croatia_february_2022.pdf).
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Chapter 4.
Strategies, Policies,
and Institutions
for Blue Economy
Transition
© Benan Berhan contents
78 Charting Croatia‘s Blue Economy Pathways
Chapter 4
Key takeaways
■ Croatia harmonized the national policy and legal framework with EU legislation and embraced environ-
mental sustainability and the blue growth paradigm. Nonetheless, there are challenges demanding better
integration of sector policies to address sustainability risks in the blue economic space.
■ Key factors to be addressed are related to the enabling conditions toward blue economy.
■ Croatia needs a Blue Economy Strategy and a Roadmap to frame the governance approach in the blue
space aligned with national development aspirations, commitments, and goals.
■ Mainstreaming the BEDF components will help overcome policy fragmentation and will ensure policy co-
herence, coordination, and consistency across the blue economy sectors.
■ Addressing specific normative and practical questions linked to the feasibility of sector integration in the
maritime economic space (that is, MSP) will enable a shift from sectoral to boundary-spanning develop-
ment approach. This includes improved horizontal and vertical coherence of development priorities in Adri-
atic Croatia focusing on resource availability, protection of natural capital, economic equity, and increased
benefits to society.
■ An important cross-cutting issue to resolve is the institutional capacity and organizational ability to assess
and deal with complex challenges such as impacts of climate change, pollution threats and environmental
degradation, demographic challenges, and sustainable tourism development in Adriatic Croatia.
■ Assigning an organizational responsibility for oversight of the blue economy transition and an effective
political mechanism emphasizing the cooperation between all actors will be an important element of the ‘
blue governance capacity’ of Croatia.
■ Croatia can further the public sector effort to tap into more opportunities for effective partnerships with
private sector.
Strategic Context for Sustainable
EU Maritime Space
The Convention for the Protection of the Med-
iterranean Sea between Mediterranean coun-
tries and the EU (the Barcelona Convention)
was signed in 1976 and is central to the region-
al cooperation on protection of the sea. The
last amendments to the Barcelona Convention
entered into force in 2004. These include seven
protocols which tackle different issues of marine
protection: pollution from ships, land-based pol-
lution, protected areas, pollution from exploration
and exploitation of continental shelf and seabed,
transboundary movement of hazardous waste,
and integrated coastal zone management.
© Benan Berhan
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Table 8. Croatia’s Alignment with International and Regional Commitments
International Agreements Status
1 United Nations Convention on the Law of the UNCLOS for Croatia came into force on November 16,
Sea (UNCLOS) 1994, OG – International Treaties no. 9/2000
2 Convention on Biological Diversity (CBD) Entered into force in relation to the Republic of Croatia
on October 7, 1996, OG – International Treaties no. 6/96
3 International Convention for the Prevention of MARPOL 73/78 for Croatia came into force on October 8,
Pollution from Ships (MARPOL) 1991. OG – International Treaties no. 1/91
Regional Agreements Status
1 The Barcelona Convention and its protocols Based on the succession notification, the Republic of
Croatia is a party to the Barcelona Convention since
October 8, 1991 (OG – International Treaties no. 12/93)
1.1 Protocol for the prevention of pollution of the Based on the succession notification, the Republic of
Mediterranean Sea by dumping from ships Croatia is a party to the Dumping Protocol since October
and aircrafts – Dumping Protocol 8, 1991 (OG – International Treaties no. 12/93 and 17/98)
1.2 Protocol concerning cooperation in The Prevention and Emergency Protocol was published
preventing pollution from ships and, in in the OG – International Treaties no. 12/03, entered into
cases of emergency, combating pollution force in relation to the Republic of Croatia on March 17,
of the Mediterranean Sea – Prevention and 2004 (OG – International Treaties no. no. 4/04)
Emergency Protocol
1.3 Protocol for the protection of the The Offshore Protocol was published in the OG –
Mediterranean Sea against pollution resulting International Treaties no. 13/17
from exploration and exploitation of the
continental shelf and the seabed and its
subsoil – Offshore Protocol (1994)
1.4 Protocol on the prevention of pollution of The Republic of Croatia did not sign the protocol.
the Mediterranean Sea by transboundary
movements of hazardous wastes and their
disposal – Hazardous Waste Protocol (1996)
1.5 Protocol concerning specially protected areas Specially Protected Areas and Biological Diversity
and biological diversity in the Mediterranean Protocol was published in the OG – International Treaties
– Specially Protected Areas and Biological no. 11/01, entered into force in relation to the Republic of
Diversity Protocol Croatia on May 12, 2002 (OG -International Treaties no.
4/04)
1.6 Protocol for the protection of the Based on the succession notification, the Republic of
Mediterranean Sea against pollution from Croatia is a party to the Land-based Sources of Pollution
land-based sources – Land-based Sources of Protocol since October 8, 1991 (OG -International Treaties
Pollution Protocol no. 12/93 and 3/06)
1.7 Protocol on Integrated Coastal Zone Published in the OG – International Treaties no. 8/12,
Management in the Mediterranean – entered into force in relation to the Republic of Croatia
Integrated Coastal Zone Management Protocol on February 28, 2003 (OG -International Treaties no. 2/13)
2 Agreement on the Subregional Plan Act of ratification is published in the OG – International
of Interventions for the Prevention of, Treaties no. 7/08
Preparedness for, and Response to Large-Scale
Sudden Pollution of the Adriatic Sea
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80 Charting Croatia‘s Blue Economy Pathways
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Transition to a sustainable maritime economy with NECPs as well as with good environmental
could be challenged by multiple economic, so- status as defined in the Marine Strategy Frame-
cial, and environmental factors. The EU body of work Directive (MSFD) 2008/56/EC of the European
strategies and policies is shaping the policies of Parliament and of the Council of June 17, 2008. In
member states to address these challenges and to relation to the MSFD, fulfilling the objective of GES
continue to protect their coastal and marine eco- depends on the full compliance with the UWWTD
systems threatened by anthropogenic pressures Council Directive 91/271/EEC of May 21, 1991.
and climate change. The national policies of Croa-
Biodiversity conservation and protection of nat-
tia for protection of marine and coastal assets are
ural capital are among the foundational princi-
guided and shaped by the EU acquis.
ples of the blue economy. The Habitats Directive
Maritime areas face competing demands for re- (Council Directive 92/43/EEC of May 21, 1992) on the
sources to support tourism, fishing and aquacul- conservation of natural habitats and of wild fauna
ture, mineral extraction, sea transport, offshore and flora aims to contribute to biological diversi-
energy, and MPAs. The EU has a wide range of pol- ty through conservation of certain natural hab-
icies that address the different aspects of risks to itats and protection of wildlife and plant species.
ocean health and marine conservation. One of the Marine conservation gives full recognition of the
most important tools reconciling users’ conflicts in role of the circular economy in preventing waste
maritime space is maritime spatial planning. The from leaking into the water bodies. Therefore, full
Maritime Spatial Planning Directive 2014/89/EU of application of waste management legislation will
the European Parliament and of the Council of July be essential, including the Waste Framework Di-
23, 2014 ensures that potential negative impacts on rective 2008/98/ECC and the Single Use Plastic Di-
the natural environment are identified and avoid- rective 2019/904/ECC of June 5, 2019, as well as the
ed at a very early stage in the planning process and Port Reception Facilities Directive 2019/883/ECC of
that national maritime spatial plans are coherent June 7, 2019, for the delivery of waste from ships.
Box 3. Core Body of EU Strategies and Policies Relevant to Blue Growth
The EU Integrated Marine Policy125 is a holistic approach to all sea-related EU policies. It is based on the idea that the
Union can draw higher returns from its maritime space with less impact on the environment by coordinating its wide
range of interlinked activities related to oceans, seas, and coasts. It sets an ambitious goal to scale up marine protec-
tion from the current 11 percent to a 30 percent area coverage by 2030, meet ambitious depollution targets, and make
the most of Europe’s natural and maritime assets to attain Europe’s 2030 targets and climate neutrality ambition.
The Blue Growth Strategy (2012)126 aims to stimulate growth in the blue economy (COM/2012/0494 final). It builds
upon the Commission’s Integrated Maritime Policy launched in 2007 and identifies five areas which have potential
in growth and jobs in the blue economy: blue energy; aquaculture; maritime, coastal, and cruise tourism; marine
mineral resources; and blue biotechnology.
The Blue Economy Sustainability Framework (BESF)127 defines the sustainability criteria and indicators across var-
ious blue economy sectors with the purpose to inform public policies and investment decisions of member states.
The BESF criteria and indicators link the four dimensions of sustainability (economic, environmental, social, and
governance).
__________________________
125 https://www.europarl.europa.eu/factsheets/en/sheet/121/the-integrated-maritime-policy.
Communication From the Commission to the European Parliament, The Council, The European Economic And Social Committee And The Com-
126
mittee Of The Regions Blue Growth opportunities for marine and maritime sustainable growth. Brussels, 13.9.2012 COM (2012) 494 final.
Informed by the study, “Sustainability Criteria for the Blue Economy,” launched by the European Commission, European Climate, In-
127
frastructure and Environment Executive Agency. Sustainability criteria for the blue economy: main report, Publications Office, 2021.
https://data.europa.eu/doi/10.2826/399476.
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The Bathing Water Directive (Directive 2006/7/EC of the European Parliament and of the Council of February 15,
2006) concerning the management of bathing water quality and repealing Directive 76/160/EEC aims to protect
the environment and the health of its citizens by attaining good bathing water quality throughout the EU.
The EU’s Biodiversity Strategy for 2030 (COM (2020) 380 final) is a comprehensive, ambitious, and long-term plan
to protect nature and reverse the degradation of ecosystems. It sets Europe’s biodiversity on a path to recovery by
2030 and contains specific actions and commitments including to enhance the protection of marine ecosystems
with the objective of achieving good environmental status. One of the key commitments for 2030 is to legally pro-
tect a minimum of 30 percent of the EU’s seas.
The Zero Pollution Action Plan for Air, Water and Soil (COM (2021) 400 final) outlines the zero-pollution vision for
2050, which is for air, water, and soil pollution to be reduced to levels no longer considered harmful to health and
natural ecosystems, thereby creating a non-toxic environment. A set of key actions aim to improve water quality by
reducing waste, plastic litter at sea (by 50 percent) and microplastics released into the environment (by 30 percent).
The Common Fisheries Policy (CFP) aims to ensure long-term environmental, economic, and social sustainability
for fisheries and aquaculture; the availability of food supplies; and a fair standard of living for fisheries and aqua-
culture communities. In February 2023 the EC presented a package of measures aiming to reduce the negative
impact on marine ecosystems, particularly through seabed disturbance, by-catch of sensitive species, and effects
on marine food webs.
The EU Strategy on Adaptation to Climate Change (COM (2021) 82 final) aims to stop ocean acidification and en-
courage nature-based solutions for sustaining Europe’s seas. In coastal and marine areas, nature-based solutions
will enhance the coastal defense and reduce the risk of algal blooms.
The Offshore Renewable Energy Strategy (COM (2020) 741) supports the long-term sustainable development of
this sector aiming to reach the EU’s ambitious energy and climate targets for 2030 and 2050. The strategy sets
targets for an installed capacity of at least 60 GW of offshore wind and 1 GW of ocean energy by 2030, and 300 GW
and 40 GW, respectively, by 2050.
The European Green Deal (COM (2019) 614 final) and the Recovery Plan for Europe (COM (2020) 442 final) high-
light a new approach for a sustainable blue economy in the EU (COM (2021) 240 final) affirming that the EU’s
blue economy is fundamental to both efforts. The blue economy agenda aims to help achieve the European Green
Deal’s objectives, and complement other recent Commission initiatives on biodiversity, food, mobility, security,
data, and more.
The Farm to Fork Strategy (COM (2020) 381) final) aims to reduce the environmental and climate impact of pri-
mary production, ensure fair economic returns for farmers, fishers, and aquaculture producers. It also seeks to
improve animal welfare, protect plant health, and promote adoption of new green business models, circular bio-
based economy and sustainable fish and seafood production.
National Policy Framework need to promote local engagement and support
relevant BE policies, including scientists and the
for Transition to Blue Economy
entrepreneur community. Implementation chal-
Croatia has made its strategic choices for align- lenges ahead necessitate that institutions and or-
ment of national policy and legal framework ganizations respond to them in a timely manner by
with the ambitious sustainability agenda of EU, expanding their knowledge, skills, and capacity to
although there is still room for improvement. measure impacts and results.
Harmonization of national policies and legislation The main documents which address the sustainabil-
with EU policies has taken place on many levels ity of coastal and marine environment are the Envi-
including the governance aspects of environmen- ronmental Protection Act (OG no. 80/2013, 152/2015,
tal protection and conservation of marine ecosys- 78/2015, 12/2018, 118/2018), the Nature Protection Act
tems. Annex 5 provides an overview of alignment (OG no. 80/2013, 15/2018, 14/2019, 127/2019), and the
of relevant national legislation with EU policies. To Water Act (OG no. 66/2019). Table 9 provides a com-
move toward deeper transformation and integra- prehensive list of national strategies and legislation
tion of BE principles, politicians and policy makers related to blue economy development.
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82 Charting Croatia‘s Blue Economy Pathways
Chapter 4
The Maritime Development and Integrated Mar- for the acceptance and disposal of ship waste and
itime Policy Strategy sets out two basic goals: (a) cargo residues in accordance with international
sustainable growth and competitiveness of the and EU regulations, supervision and management
maritime economy and (b) safe and environmental- of ballast water treatment in accordance with inter-
ly sustainable development of maritime transport, national guidelines. The strategy has provisions for
infrastructure, and a maritime area of the Republic adequate emergency measures to combat pollu-
of Croatia. The EU Networking Group for Integrat- tion accidents at sea to prevent far-reaching conse-
ed Maritime Policy (EUNETMAR 2014) identifies the quences on the environment and maritime sectors.
priority marine/maritime sectors, including tour- It foresees the establishment of an oceanographic
ism/nautical tourism, passenger shipping and fer- model system for actions in traffic-related techno-
ries, fishing and marine aquaculture, oil and gas, logical incidents and interventions in the case of
protected areas. pollution. Furthermore, the strategy prioritizes the
need to reduce transport CO2 emissions, there-
Fisheries and aquaculture sector development
by mitigating the impact of transport on climate
follows the National Strategic Plan for the De-
change.
velopment of Fisheries (prepared under the pro-
visions of Council regulations of the European The Strategy for the Development of Sustainable
Fisheries Fund) and the National Strategic Plan Tourism by 2030 adopted by the Parliament in 2023
for Aquaculture Development 2014–2020. Both is aligned with the National Development Strategy
documents promote sustainable development of of the Republic of Croatia until 2030 and consistent
the sectors, increased productivity, and strength- with EU policies. The strategy recognizes the pres-
ened competitiveness. More recently, the strategic sures and negative impacts of tourism to the envi-
goals and priorities of the fishery and aquaculture ronment and recommends a qualitative shift from
sector were elaborated in the Fisheries and Aqua- unsustainable tourism toward a development path
culture Program of the Republic of Croatia for the of high value added and no harm to the environ-
program period 2021–2027,128 approved by the EC in ment. Thus, the sector commitment is preservation
November 2022. The program is supported by a to- of natural capital on which Croatian coastal tourism
tal of €0.35 billion available to the Croatian fisheries depends by (a) reducing the pressure from tourism
and aquaculture sector, of which €0.24 billion from on space, environmental components, and nature
the EC and rest from the budget of the Republic while encouraging a circular economy and (b) re-
of Croatia. The new program envisages the imple- ducing the interrelated negative impact of tourism
mentation of support measures within the frame- and climate change. The Law on the Provision of
work of all four priorities of the European Maritime, Tourism Services (OG No. 70/21)129 regulates tourism
Fisheries and Aquaculture Fund, aimed above all services, the manner, and conditions for providing
at supporting the implementation of the Common such services, the package travel contract and linked
Fisheries Policy (CFP), through support for man- travel arrangements contract, as well as the rights
agement measures and compliance with the re- and obligations of the trader and the traveler in rela-
quirements set by the same, while respecting the tion to these contracts. The Law on Hospitality Ac-
specific goals of the Republic of Croatia. tivities (OG No. 126/21)130 regulates the manner and
conditions under which legal and natural persons
The Strategy on Transport Development for 2017–
may engage in hospitality activities.
2030 (OG, no. 84/17) prioritizes pollution prevention
of the Adriatic Sea from maritime facilities and ves- The Hydrogen Strategy until 2050 introduces
sels. Specific measures include modernizing the hydrogen as a potential new energy fuel in the
fleet of cleaning boats and availability of services, transport sector. Supporting legislation that will
equipment, and devices for interventions in the be developed will include new standards relating
event of large-scale sea pollution, accessible service to hydrogen as an alternative fuel, use of emerging
__________________________
128 https://euribarstvo.hr/files/Program-za-ribarstvo-i-akvakulturu-RH-za-2021.-2027..pdf
129 OG: 130/17, 25/19, 98/19, 42/20, 70/21.
130 OG: 85/15, 121/16, 99/18, 25/19, 98/19, 32/20, 42/20, 126/21.
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Chapter 4
technologies for production, consumption, and Although the Croatian islands are connected to
storage of hydrogen. According to the Hydrogen the mainland by submarine cables, hydrogen fuel
Strategy, maritime transport has great potential can enhance their energy independence and can
for hydrogen use, especially when it comes to the be used as fuel for the public insular transport like
traffic connecting the mainland and the islands. ferries.
Table 9. Core Strategies and Legislation of the Republic of Croatia Relevant to Blue Economy
National Legislation Environmental Protection Act
Nature Protection Act
Water Act
Marine Fisheries Act
Law on Marine Aquaculture
Law on Maritime Domain and Seaports
Law on Public Liner and Occasional Coastal Maritime Transport
The Maritime Code
Law on the Provision of Tourism Services
Law on Hospitality Activities
Republic of Croatia’s Physical Planning Act (PPA)
National Strategies Maritime Development and Integrated Maritime Policy Strategy of the
Republic of Croatia
Agriculture and Fisheries Strategy of the Republic of Croatia
National Strategic Plan for the Development of Fisheries
National Strategic Plan for Aquaculture Development 2014-2020
Fisheries and Aquaculture Program of the Republic of Croatia 2021-2027
Strategy for Transport Development of the Republic of Croatia
Framework Plan and Program for Hydrocarbon Exploration and Exploitation in
the Adriatic
Hydrogen Strategy until 2050 of Republic of Croatia
Marine Environment and Coastal Zone Management Strategy
National Island Development Plan 2021-2027
Spatial Development Strategy
Strategy for the Development of Sustainable Tourism by 2030
Strategy for the Management of the Marine Environment and Coastal Zone
The Energy Strategy, like the Low-Carbon Strate- (e) research, innovation, and competitiveness. The
gy, foresees Croatia’s reduction of 74 percent of its decarbonization objective sets a target for reduction
GHG in 2050 compared to the base year—1990—for of GHG emissions by 2030 compared to 2005: at least
emissions. The Integrated Energy and Climate Plan 43 percent in the ETS (emission trading system) sec-
sets national objectives and targets along five di- tor and at least 7 percent in non-ETS sector. The in-
mensions: (a) decarbonization; (b) energy efficiency; dicative national targets for RES shares by 2030 are
(c) energy security; (d) internal energy market; and presented in Table 10.
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84 Charting Croatia‘s Blue Economy Pathways
Chapter 4
Table 10. Targets for Increasing the Supply of RES
RES share, % Estimated 2020 Targets 2030
In the gross direct consumption of energy 28.6 36.4
In the gross direct consumption of electricity 47.0 63.8
In the gross direct consumption of energy for heating and cooling 33.3 36.6
In the direct consumption of energy in transport 5.2 13.2
Source: Republic of Croatia Integrated Energy and Climate Plan (2019).
The Framework Plan and Program for Hydrocar- Zone Management Strategy (OG no. 112/14) was
bon Exploration and Exploitation in the Adriatic issued pursuant to the provisions of the Environ-
(2015), defines 28 hydrocarbon exploration areas mental Protection Act. The Marine Environment
in the Adriatic Sea, comprising both territorial sea and Coastal Zone Management Strategy links the
and the continental shelf of the Republic of Croa- obligations arising from the MSFD and the ICZM
tia: 8 exploration areas in the northern Adriatic, 15 in Protocol in one strategic document that would re-
the central Adriatic, and 5 in the southern Adriatic. flect and harmonize the management solutions in
A strategic environmental assessment was carried support of sustainability of the coastal and marine
out for the program but there is no national con- environment, economy, and society. The Marine
sensus on how it should be achieved. Strategy places strong emphasis on regional coop-
eration of countries in the Mediterranean Sea and
Marine fisheries are regulated by the Marine
the Adriatic Sea subregion to achieve harmoniza-
Fisheries Act (OG no. 62/17, 14/19, 30/23). This Act
tion of the marine strategies of all the countries. The
regulates the implementation of EU’s CFP and de-
strategy is informed, among others, by (a) an Initial
termines the competent authorities, their tasks, su-
Assessment of the Status of Marine Environment
pervision, and enforcement. It also sets objectives
and the pressures thereon in the Croatian part of
of the fisheries policy, methods of managing and
the Adriatic Sea (adopted in 2012); (b) a Character-
protecting the renewable biological resources of
ization of Good Environmental Status (GES) for the
the sea, fishing regimes, the collection of data, the
Marine Waters (adopted in January 2015); (c) an eco-
management of the fishing fleet, regulation of mar-
nomic and social analysis of the use and the cost
ket, and other issues important for marine fisheries.
of degradation of marine and coastal environment
According to articles 4 and 5, fisheries are a strate-
(adopted in June 2015); (d) a Program of Measures
gic economic activity for Croatia. The goals of the
for the Protection and Management of the Marine
fishery policy are improvement of the competitive-
Environment and Coastal Zone of the Republic of
ness of fisheries and its economic and social sus-
Croatia (OG no. 97/2017), as the most comprehen-
tainability and ensuring sustainable management
sive document addressing land-sea interactions; (e)
of the natural resources.
an Action Program for the Marine Environment and
The Law on Marine Aquaculture (OG no. 13/17, Coastal Zone Management Strategy; and (f) a Mon-
111/18, 144/20, 30/23) regulates the implementation itoring system for the ongoing assessment of the
of EU’s CFP in the area related to aquaculture, de- status of the Adriatic Sea 2021–2026 (OG no. 28/2021).
termines the national goals of aquaculture devel- The ecosystem-based approach is referenced in the
opment, the manner, and conditions of performing Strategy for the Management of the Marine Envi-
aquaculture activities, the competent authorities ronment and Coastal Zone and the principles of
for the implementation of support in aquaculture spatial planning are determined by the Republic of
and market regulation, supervision, and control, as Croatia’s Physical Planning Act (PPA).
well as other important issues for aquaculture.
The government has acknowledged the value
The Regulation on development and implemen- of the Adriatic Sea and the high risk of pollution
tation of the Marine Environment and Coastal due to coastal urbanization and growing devel-
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Chapter 4
© Benan Berhan
opment of tourism (especially nautical). It has itime property, its use and utilization, classifica-
devised a strategy to address these pressures in tion of seaports, port areas, establishment of port
the National Island Development Plan 2021–2027 authorities, port activities and their performance,
(Republic of Croatia, Ministry of Regional Develop- construction and use of port superstructure and
ment, 2021). Protection of the marine environment substructure, as well as important issues regarding
and the policy of sustainable development of the order in seaports.
coastal economy are integrated in the spatial/phys-
The Law on Public Liner and Occasional Coast-
ical planning system.
al Maritime Transport (OG No. 19/2022). According
Croatia has established a monitoring system in to Article 1, the Law regulates the system of public
line with the provisions of the MSFD which re- coastal liner transport, which ensures regular mar-
quires regular monitoring of the marine environ- itime connectivity between inhabited islands and
ment through 11 quantitative descriptors for assess- the mainland, as well as among inhabited islands.
ing GES. The updated analysis of GES by descriptors This Law also regulates the activities, working pro-
is reported in the Updated Documents of Marine cedures, and public authority of the Coastal Liner
Environment and Coastal Zone Management Strat- Service Agency.
egy of Republic of Croatia, 2021. Although substan-
Croatia regulates the reception and handling of
tial efforts were made to integrate marine data with
ship-generated waste in the ports. The Ordinance
the information system MORE (https://vrtlac.izor.hr/
on the conditions and method of maintaining or-
ords/portal/) which leads to several databases, it is
der in ports and other parts of Croatia’s internal
evident that additional monitoring and data col-
marine waters and territorial sea (2021), transposes
lection will be needed to fully meet the directive’s
Directive (EU) 2019/883 in the national legislation.
provisions.
The ordinance exempts certain types of vessels
The Law on Maritime Domain and Seaports (OG from the requirement to provide prior information
No. 158/03, 100/04, 141/06, 38/09, 123/11, 56/16, 98/19) on ship-generated waste aiming to reduce the ad-
regulates the legal status of maritime property, ministrative burden. The Maritime Code, the Ordi-
boundaries, management and protection of mar- nance on the conditions to be met by ports, and the
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86 Charting Croatia‘s Blue Economy Pathways
Chapter 4
Ordinance on terms and methods of maintaining sectoral policies. An evidence-based analysis of
order in ports and other parts of the internal seawa- possible cross-sectoral impacts of the blue econo-
ters and the territorial sea of the Republic of Croatia my resources for delivering smart, sustainable, and
mandates delivery of ship-generated waste, based inclusive growth of the Adriatic coast and islands of
on the adopted Ship Waste Reception and Handling Croatia would make a significant contribution and
Plan. Specifically, these are the legal provisions for fill in the analytical gap. Further, an analysis of the
delivery of ship-generated waste, the disposal, re- national and regional strategies, development and
ception, and collection of waste and cargo residues physical plans and normative acts relevant to the
from maritime facilities, the content of waste and management of coastal and marine areas (envi-
cargo residue management plans for maritime ronmental protection, nature protection, fisheries,
facilities in ports, information on ship-generated water management, tourism, transport, agricul-
waste, method and deadlines for delivering and ture, exploitation of mineral raw materials, and so
retaining waste delivery certificates, deadlines and on) should be carried out. This analysis should re-
procedure for handling complaints, criteria for fees veal possible overlap or incoherence between pol-
for waste reception and collection, methods of icy documents and legislation regulating different
payment for waste reception and collection from sectors of the blue economy. This entails a consid-
fishing vessels, yachts, and small boats. Further, erable scope of work, which should become a key
the Regulation on the conditions and means of task of the coordination mechanism for the effec-
attaining the right to privileged carriage on public tive implementation of the Sustainable Blue Econ-
shipping lines (OG No. 33/2006, 38/2009, 87/2009, omy in Croatia.
18/2011, 80/2013, 56/2016, 122/2020) establishes the
One prerequisite for achieving sustainable blue
conditions and procedure for granting preference
economy goals is better integration of legal, reg-
to public liner maritime transport.
ulatory, and institutional frameworks. The lack of
Implementation of EU Urban Wastewater Treat- a coherent vision toward achieving sustainable blue
ment Directive131 (UWWTD) lags specifically in economy is evident at all levels of governance. In the
the coastal area. According to the CBS, 66 percent short run, more synergies and consistent approach
of the total wastewater is treated to at least the sec- to the blue economy sectors would be necessary
ondary level in 2022.132 to fulfil the sectors’ potential and render more sus-
tainable outcomes. In this context, it would be ad-
At the national level, Croatia has aligned many
visable to adopt a National Blue Economy Strategy
of the policies and legislation with the EU envi-
accompanied with an action plan or a roadmap and
ronmental protection objective including on pro-
investment plans.
tection of marine waters, waste management, bio-
diversity and nature protection, transport, energy In parallel, speeding up the enforcement of the
and fisheries, and so on. As a member state of the EU laws, especially on waste management and
EU, Croatia has adopted a number of policy docu- protection of marine waters from pollution will
ments and legislations in line with the EU’s overall increase the protection of near shore resources.
political goals, that is, achieving climate neutrality Croatia should step up efforts to fully implement
by 2050. However, the concept of sustainable blue the EU waste policy and facilitate transition to a cir-
economy is not fully interpreted in the Croatian cular economy through improving waste manage-
policy documents. The existing documents for the ment, stimulating innovation in recycling, and lim-
development of blue economy activities (tourism, iting landfilling. Another important challenge for
transport, fisheries, and so on) need to be informed Croatia is implementation of the UWWTD. There is
by an assessment of sector development goals and still a long way to go to ensure full compliance with
activities involved, to achieve coherence among this directive. (An urban area is compliant with the
__________________________
he EU UWWTD requires secondary treatment of all discharges from agglomerations of >2,000 population equivalents, and more advanced treat-
131 T
ment for agglomerations >10,000 population equivalents in designated sensitive areas. European Commission (EC). 2020a. “Urban Wastewater
Directive Overview.” https://ec.europa.eu/environment/water/water-urbanwaste/ index_en.html (accessed June 19, 2020).
132 Croatian Bureau of Statistics, Public Sewage System, 2022.
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87
Charting Croatia‘s Blue Economy Pathways
Chapter 4
UWWTD requirements, when all generated waste- themes and requirements for MSP pursuant to
water is collected and treated in line with the UW- Directive 2014/89/EU – MSP Directive, Directive
WTD provisions.) Obviously, planning and finance 2008/56/EC – MSFD and the Protocol to the Barce-
remain the main challenges in achieving such a lona Convention on Integrated Coastal Zone Man-
level of compliance. agement in the Mediterranean (ICZM Protocol 3).
The ICZM Protocol was incorporated in the physi-
cal planning system, starting with the declaration
on protected coastal and marine zones in 2004.
Marine Spatial Planning
Although there is no single MSP plan for the Croa-
Marine Spatial Planning is an essential tool for tian maritime area, the existing spatial plans cover
helping the national authorities to accommo- the inner waters and territorial sea.133 For instance,
date the blue economy transition by creating the continental shelf area is covered by the Physi-
evidence-based and inclusive maritime spatial cal Planning Programme of the Republic of Croa-
plans. It can also help assess the future spatial needs tia (adopted by the Parliament in 1999 and revised
of established and emerging blue economy sec- in 2013), which includes strategies and implemen-
tors. Other tools for strengthening the blue econ- tation components at the state level. According to
omy institutional and stakeholder capacity include the provisions of the UNCLOS convention (Part V,
knowledge transfer for accelerating technology in- Exclusive Economic Zone), a single spatial plan of
novations; promoting maritime skills necessary to the EEZ area may be developed.
apply new technologies; efforts to gain better and
There is no single integrated134 MSP plan for the
relevant data and information; and initiatives which
Croatian maritime area, although the existing
facilitate and streamline investments including risk
spatial plans cover all coastal waters and terri-
funding for innovative maritime technologies.
torial sea.135 The continental shelf area is covered
The MSP Directive is transposed in the national by the Physical Planning Program of the Republic
legislation through an amendment of the PPA of Croatia (adopted by the Parliament in 1999 and
(OG 65/2017), which came into force in July 2017. revised in 2013), a document with strategic and
The national Spatial Development Strategy sets implementation components at the state level.
strategic goals and priorities based on established An analysis carried out in the EU-funded Project
core values and analysis of territorial status. Spa- SUPREME136 affirms that most provisions of the
tial plans are the main instruments supporting the MSP Directive regarding activities in the sea are
national spatial planning policy at state, regional/ covered in the Adriatic counties’ spatial plans137.
county, and local levels. The spatial plans have the Existing spatial plans on the state (NUTS1), region-
force of bylaws (Article 58, paragraph 1 of the PPA). al (county; NUTS3) and local (city or municipality;
Depending on the level, they are adopted by the LAU2) level cover the entire sea area up to the out-
Croatian Parliament, the Government of the Re- er border of the territorial waters. However, all ex-
public of Croatia, and the representative bodies of isting spatial plans will have to be revised and re-
counties and cities/municipalities. structured in the process of transition to the ‘new
generation’ of plans according to the Republic of
Croatia’s physical planning system (PPS) cov-
Croatia’s PPA.
ers both terrestrial and marine areas. Maritime
spatial planning is traditionally an integral part The development of new generation of spatial
of physical planning. It incorporates most of the plans has begun with the preparation of the
__________________________
SP Country Information Profile Croatia – February 2022.
133 M
‘Integration’ refers to five dimensions of integration, namely among sectors, among levels of government (international, European, regional and
134
subregional), across land and water interface (coastal and maritime aspects), among disciplines (socioeconomic and environmental), and across
countries (cross-border).
135 European MSP Platform. MSP Country Information Profile Croatia – February 2022.
136 https://maritime-spatial-planning.ec.europa.eu/projects/supreme-supporting-maritime-spatial-planning-eastern-mediterranean.
ttps://www.msp-platform.eu/practices/addressing-msp-implementation-case-study-areas-dubrovnik-neretva-county, Addressing MSP Imple-
137 h
mentation in Case Study Areas: Dubrovnik – Neretva County; all Spatial plans are also available via the central platform (Informacijski sustav
prostornog uređenja – ISPU/Physical Planning Information System): https://ispu.mgipu.hr/.
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88 Charting Croatia‘s Blue Economy Pathways
Chapter 4
National Spatial Development Plan (NSDP/PPR)138 ment of the PPA has been planned for 2023. Provi-
for the entire land and sea area (up to the outer sions for public consultation in spatial planning are
border of the Croatian territorial waters). As part prescribed by the PPA (Art. 94). Those refer to both
of the preparatory work for the DPPR, the data for land and marine spatial planning because spatial
valid spatial plans were processed and are part of plans cover both terrestrial and maritime areas.
the preparation for the development of lower-lev-
Another good example is the integrated coastal
el spatial plans. This includes development and
zone plan for Šibenik-Knin county with emphasis
adoption of a spatial plan of special features cover- on climate change adaptation (UNEP/MAP/PAP,
ing the marine area of special competence. This is 2016) which earned the MedAward in 2019. “As
according to UNCLOS and based on the Decision part of the planning process, Šibenik-Knin County
on Declaring the Exclusive Economic Zone (EEZ) of recently initiated the ‘coastal infrastructure cadas-
the Republic of Croatia in the Adriatic of February ter’ with the support of the EU Interreg AdriaAdapt
5, 2021 (OG 10/2021). Since the Decision has entered project. Kaštela, another Croatian coastal town, em-
into force, the adoption of the Spatial Plan of the ulated the Šibenik-Knin County example by pro-
Protected Ecological and Fisheries Area and the ducing an even more detailed cadastre. The towns
Spatial Plan of the Continental Belt of the Repub- of Kaštela, Vodice, and the county of Split -Dalmatia,
lic of Croatia, prescribed in Article 49a of the PPA, recently adopted full-fledged coastal adaptation
cease to be an option. Given these facts, an amend- plans.” 139
Box 4. Zadar County Spatial Plan
The Zadar County Spatial Plan was developed in 2001. The objectives of the plan include economic development,
coastal development, rational use of natural resources, protection, landscape protection, and protection of histor-
ical heritage. It addresses the demand for different uses of its marine area, including protected areas, maritime
transport, ports, and others. The plan obliges municipalities and towns to define sea use within their coastal belts,
through their spatial plans. It identifies four different marine zones for mariculture, which is one of the most im-
portant maritime activities for Zadar County, amounting to approximately 60 percent of total mariculture pro-
duction in Croatia. Mariculture zonation is based on the ‘Study on the Use and Protection of the Sea and Seabed
in Zadar County’, of which the main objective was to initiate the ICZM process in the county and simultaneously
propose zones for different types of mariculture, based on suitability assessments.
Designated uses: Referring to MSP and land-sea interaction (LSI) themes, the plan has designated marine ports for
different purposes, marine traffic routes, island heliports, sea salt harvesting area(s), underwater cables, freshwater
supply, areas for mariculture with detailed zoning and capacities, and the following areas with special restrictions
for users:
articularly sensitive and especially endangered habitat areas, sources of marine pollution, areas defined accord-
■P
ing to building density along the coastline (natural coast, planned building areas, illegal construction of different
types)
rotected areas (coastal and underwater archaeological zones, protected landscape, natural park)
■P
estricted area (1,000 m of land and 300 m of sea surface measured from the coastline)
■R
reas for aquaculture with detailed zoning and capacities (based on detailed study).
■A
Source: Zadar County Plan: https://www.zpu-zadzup.hr/prostorno-uredjenje;
City/municipality plans: https://www.zpu-zadzup.hr/prostorno-uredjenje/prostorni-planovi.
__________________________
he Decision on the Preparation of the National Spatial Development Plan (OG 39/18) was passed by the Government of the Republic of Croatia
138 T
in 2018.
https://www.unep.org/unepmap/news/story/how-coastal-plans-bolster-adaptation-climate-change.
139
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Charting Croatia‘s Blue Economy Pathways
Chapter 4
Blue Governance, Institutions, The blue economy holds the potential to act as
an integrator framework for sustainable devel-
and Stakeholders
opment of the maritime space. It can succeed if
‘Blue governance’ is defined as the formal and the ‘architecture’ of national blue economy creates
informal processes of collective decision-making, the enabling environment for cross-sectoral policy
planning, deliberating, and capacity building by coherence and the process of decision-making to
government and civil society and market actors achieve desired outcomes involving all stakehold-
connected to marine and coastal environment. ers. The United Nations (UN) principles of effective
Blue governance marries blue economy and blue governance141 for sustainable development, among
growth with the governance principle and en- others, includes stability of the political leadership
compasses the structures and processes that are and commitment, policy coherence, effective insti-
designed to ensure accountability, transparency, tutional capacity, coordination and partnerships,
responsiveness, rule of law, stability, equity and in- transparence and accountability, and equity and
clusiveness, empowerment, and broad-based par- inclusiveness.
ticipation.140
Box 5. Blue Governance (University of Portsmouth, UK)
The definition of blue governance encompasses four central themes and several sub-themes:
lue policies, planning, and security (sub-topics include Coordination of aquatic economic sectors and inclusion
■B
of non-market/ecological services; Spatial planning; Maritime security and maritime domain awareness; SDG14
implementation; Integrated coastal zone management);
lue energy, technologies, and transport solutions (Sub-topics include Marine renewables energies; Logistics
■B
and safety; Shipping; Port management; Oil Spill prevention; Biofouling and anti-fouling; Off-shore technologies);
iodiversity, blue carbon, and climate change (Sub-topics include marine and coastal ecosystem functioning;
■B
Ecosystem carbon sequestration and storage; Ecosystem resilience; Marine debris litter and plastics; Biodegra-
dation and bioprospection; Marine and coastal ecosystem service valuation);
■ Aquatic resources management (Sub-topics include Fishery management; Fishing by-catch of birds, turtles, and
mammals; Aquaculture development; Marine protected areas; Habitat restoration).
Source: https://www.port.ac.uk/research/research-centres-and-groups/centre-for-blue-governance.
Box 6. Blue Governance in Seychelles
Seychelles is in the Western Indian Ocean just south of the Equator. It has an EEZ of 1.35 million km2, a land area of
just 454 km2, and a population of around 96,000, mainly concentrated on three main islands. Seychelles had a gross
national income (GNI) per capita of US$16,870 (2019), which ranks it as a high-income country. The two main pillars
of Seychelles’ prosperity are tourism and fisheries, both being ocean-based activities. In addition, Seychelles has one
of the highest fish consumption per capita (around 65 kg per year) (Republic of Seychelles 2013). Seychelles’ unique
island and marine environment is of global significance with one marine UNESCO World Heritage Site, the Aldabra
Atoll, which is famous for its endemic population of giant tortoises and is rich marine life. Due to its geography and
socioeconomic characteristics, Seychelles’ prosperity directly and indirectly depends on its coastal and marine envi-
ronments; hence, there is critical importance of a well-articulated blue economy strategy to inform national devel-
opment in a way that respects its marine ecological integrity.
__________________________
140 A s defined by the Centre for Blue Governance, University of Portsmouth, UK: https://www.port.ac.uk/research/research-centres-and-groups/cen-
tre-for-blue-governance.
nited Nations Economic Social Council. 2018; SDG 16 and SDG 17 (2015); WB Good Governance Indicators (WGI); and OECD indicators for policy
141 U
coherence (2019).
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90 Charting Croatia‘s Blue Economy Pathways
Chapter 4
Seychelles initiated a national blue economy strategy in 2012, establishing a blue economy department and a
Blue Economy Research Institute as early as 2015, which led to the adoption of a Blue Economy Strategic Policy
framework and Roadmap (2018–2030) in 2018, hereafter referred to as the blue economy roadmap. Seychelles has
achieved international visibility, thanks to a successful debt swap for conservation and climate change adaptation
in 2015 and the issuing of the first blue bond for transitioning to sustainable fisheries in 2018, both of which contrib-
uted to the implementation of Seychelles blue economy roadmap.
Source: Benzaken, D., M. Voyer, A. Pouponneau, and Q. Hanich. 2022. “Good Governance for Sustainable Blue Economy in Small
Islands: Lessons Learned from the Seychelles Experience.” Front.Polit.Sci. December 1, 2022. Sec. Comparative Governance
Volume 4 – 2022 | https://doi.org/10.3389/fpos.2022.1040318.
While there are multiple important facets of ‘blue tronger enabling environment for responsi-
■ S
governance’, the central one that matters for ble private sector investments throughout the
swift transition is how effective the governance value chain by reducing risks and providing in-
arrangements are for enabling integration among centives for innovation. Moreover, an effective
blue economy sectors. This also includes how policy governance framework will enhance the contri-
decisions are being made and how responsible insti- bution of fisheries, aquaculture, and mariculture
tutions and organizations coordinate and partner to to the macro-economy, which will help improve
respond to sustainability challenges in the maritime the visibility of the blue sectors and consequent-
space. A holistic governance approach which builds ly resource allocation.
on a solid knowledge base, inclusive decision-mak-
ing, and cross-sectoral collaboration could bring an robust pipeline of investable opportunities to
■ A
array of benefits including the following: grow the blue economy in a way that benefits
the maritime industry and blue sectors, while
ffective implementation of the Marine Strat-
■ E protecting natural resources. An effective gov-
egy Framework Directive, the Water Frame- ernance framework will promote investments in
work Directive, the Single-use Plastics Direc- sustainable management of aquatic resources
tive, and the Directive on Maritime Spatial and environment and ensuring biodiversity and
Planning. This in turn, will help protect the ecosystem resilience. This, in turn, would contrib-
coastal areas and the health of many beachgo- ute to enhance coastal local communities’ resil-
ers, safeguard the natural environment, while ience, both economically and against climate
promoting more sustainable business models change and sea level rise.
and consumption.
mpower local communities and encourage
■ E
etter use of science, big data analytics, ar-
■ B broad-based citizen participation. Analysis and
tificial intelligence, machine learning, and re- results of fisheries rebuilding efforts around the
mote technologies to inform decision-making world have demonstrated that when local com-
and increase efficiency. At least in the foresee- munities and fishers have a voice in setting pol-
able future, regulation of marine activities is ex- icy and management guidelines, these rules are
pected to focus on the integration and synergies much more likely to be followed and create a
of existing and emerging marine industries. lasting change.
ffective programming and use of existing and
■ E The Government of Croatia has successfully imple-
future funding avenues for integrated territorial mented a fishing ban in the Jabuka-Pomo pit,142
development, sectoral and cross-border coop- which became an international good practice of
eration (for example, EU Regional Development regional collaboration on fleet management and
and Cohesion Policy programs 2021–2027, includ- restrictions of fishing efforts within the GFCM and
ing the European Maritime and Fisheries Fund). EU policies frameworks (Box 5).
__________________________
Government of the Republic of Croatia – Italy, Croatia agree to three-year fishing ban near Jabuka Pit.
142
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Charting Croatia‘s Blue Economy Pathways
Chapter 4
Box 7. Croatia Case: Jabuka Pomo Pit Fisheries Management
Croatia and Italy have reached an agreement on a three-year ban fishing in the vicinity of Jabuka island from
September 1, 2017 to August 31, 2020. The agreement was reached based on negotiations between Croatian and
Italian administrations, backed by scientists, the fishing sector and NGOs in both countries, the ministry said in a
press release. The Ministry of Agriculture’s establishment of an area of protection in the Jabuka pit is of exceptional
significance for the Union’s fisheries in compliance with the General Fisheries Commission for the Mediterranean
Scientific Advisory Committee last week in Ljubljana.
Only a small number of vessels were
allowed to operate in that area which
need special authorization. The pit is
a breeding ground for most of the de-
mersal species including the two im-
portant species for Croatian fishers,
hake and Norway lobster. It is one of the
main spawning and nursery areas in
the Adriatic. Declaring the area an FRA
was a protracted affair that took years
of negotiation and only succeeded in
2017. In fact, twice before, in 2015 and
2016, Croatia had tried to close the area
bilaterally with Italy, but these efforts
only lasted a year. in the end, it was the
work of NGOs, scientists from universi-
ties and institutions around the world,
the GFCM, and the EU that enabled the creation of the FRA. Pursuant to the restrictions the channel areas be-
tween the islands were completely closed to bottom trawling for six months in the year and are only accessible
to vessels with small engines of up to 184 kW and for only two days in the week. The Velebit channel, a strip of
water separating the mainland from the islands of Pag, Rab, and Goli Otok, was also completely closed to bot-
tom trawling. Several restrictions were thus already in place. Furthermore, the Croatian coast is more than 5,000
km long and according to EU regulations bottom trawling is forbidden in areas within 1.5 nautical miles of the
coast (and within 3 nautical miles where the depth is less than 50 m). This significantly enlarges the restricted
area in the Croatian part of the Adriatic. Fishermen in the Dalmatia-Spilt region have witnessed substantial
restoration of fish stocks in a single year.
Source: Government of Croatia; Eurofish International Organization; Restricting Fisheries in the Jabuka Pit has had Multiple
Positive Impacts – Eurofish
The MESD of the Republic of Croatia, in partic- nean Action Plan (MAP), participation in the work
ular, the Directorate of Water Management and and implementation of MEDPOL (Program for the
Sea Protection, and the Regional Service for the Prevention of Pollution and Environmental Moni-
Protection of the Sea and Coast in Rijeka are toring in the Mediterranean Sea), implementation
the institutions with a mandate to protect the of the ecosystem approach to the management of
coastal and marine environment. Monitoring of human activities (ECAP) in the Mediterranean, in
the marine environment is conducted by the Insti- the activities and work of REMPEC (Regional Action
tute for Oceanography and Fisheries together with Centre for the Prevention of Sudden Pollution in the
the Center for Marine Research (CMR), Rovinj. The Mediterranean, Malta), and PAP/RAC (The Regional
Croatian Hydrological and Meteorological Service Action Centre of the Program of Priority Activities,
regularly monitors the sea temperature and other Split) and in the work Mediterranean Commission
climatological trends in the Adriatic Sea. The MESD for Sustainable Development (MCSD).The MESD
participates in the implementation of the Bar- regularly prepares and submits annual reports on
celona Convention and accompanying protocols the implementation of the Barcelona Convention
through participation in the work of the Mediterra- and accompanying protocols.
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92 Charting Croatia‘s Blue Economy Pathways
Chapter 4
The Marine Environment and Coastal Zone Man- vice. The Croatian Energy Regulatory Agency (HERA)
agement Strategy is coordinated by the MESD. regulates the energy market in Croatia. The Ener-
The National Committee, representing inter-min- gy Institute Hrvoje Požar (EIHP) is the government
isterial coordinative body was established in 2012 research institution in the field of energy, scientific
for the development and implementation of the and market research, and advisory support to pub-
Marine Strategy, and its members were appoint- lic authorities. The EIHP institute provides services
ed by the Croatian Government, which is also the related to renewable energy sources. The Agency of
coordinator of cooperation with other competent hydrocarbons acts as a contact point for renewable
authorities. Coordination is carried out through the energy sources at sea. Other institutions acting on
Commission for Coordination, whose work includes production and distribution of oil and gas are INA
ministers and the Expert National Committee com- and JANAF. The core business of INA, d.d. is explora-
posed of scientists and experts from competent tion and exploitation of oil and gas.
bodies responsible for the implementation of the
The Ministry of Physical Planning, Construction
obligations from the Marine Strategy (Decision on
and State Assets (MPPCSA) is the competent state
the appointment of the National Expert Committee
body for spatial and physical planning and is re-
for the execution of the tasks regulated by the Reg-
sponsible for reporting the state of implementa-
ulation on the preparation and implementation of
tion of the MSP Directive. MPPCSA is the compe-
documents of the Strategy for the Management of
tent authority for MSP implementation in Croatia
the Marine Environment and Coastal Area and the
and is also responsible for spatial plans at the state
preparation and implementation of the Strategy, level. Following the amendments made to PPA in
OG no. 31/17, 42/18). The UNEP office PAP/RAC in 2018 (OG 114/2018), the former Croatian Institute for
Split supports the coastal zone management and Spatial Development continues its work within the
integrates different stakeholders concerned with MPPCSA.
the marine environment.
According to the Marine Fisheries Act, the Minis-
The responsibility for management of marine try for Agriculture, and its Fisheries Directorate
non-living resources is vested with the MESD, spe- is the key implementing body in charge of the
cifically, the Energy Directorate. On one hand, the operations in fisheries and aquaculture. Other
MESD oversees nature and environmental protec- institutional stakeholders and administrative units
tion and on the other the exploration and exploita- in charge of inspection, LAUs and counties, Cro-
tion of hydrocarbons and other mineral resources in atian Chamber of Economy, Croatian Chamber of
the marine area. Furthermore, the Agency for Hydro- Crafts and Arts, scientific and professional organi-
carbons, under jurisdiction of this Ministry, provides zations, and especially the fisheries cooperatives143
operational support for activities related to explora- and producer organizations. The fishery coopera-
tion and exploitation of hydrocarbons, and gas and tives were established with the aim to contribute to
CO2 permanent storage in geological structures, environmentally sustainable use and protection of
and for activities related to the development and marine biological resources and ecosystems, to im-
application of sustainable technologies of renew- prove the competitiveness of producers in fisheries
able energy sources. Hrvatski operator prijenosnog and market transparency by providing consumers
sustava d.d. (HOPS) is an independent transmission with accurate and precise information and product
operator, and the only operator of the electric pow- traceability; to assure market stability by production
er transmission system in the Republic of Croatia planning and supplying consumers with healthy
and the owner of the entire Croatian transmission and quality food; improve skills, working conditions
network (voltage levels 400 kV, 220 kV, and 110 kV), and safety at work, foster innovations toward blue
and holds a license to carry out the energy activity economy growth and support national and interna-
of electricity transmission as a regulated public ser- tional cooperation.
__________________________
The Rulebook on Fishery Cooperatives (OG 48/2010) and Rulebook on Recognition of Fishery Cooperatives (OG 115/2022).
143
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Charting Croatia‘s Blue Economy Pathways
Chapter 4
© Benan Berhan
Specific measures have been taken to support atia: 4 in Istria County, 2 in Primorje-Gorski kotar; 1 in
the sustainable and long-term development of Lika-Senj, 3 in Zadar, 1 in Šibenik-Knin, 2 in Split-Dal-
fishing communities in Croatia. This includes sup- matia, and 1 in Dubrovnik-Neretva County.146
port to their social cohesion, engaging them in stra-
The Ministry of the Sea, Transport, and Infra-
tegic planning, improving their decision-making
structure is responsible for transport policies
role, and ensuring a balance between conflicting
(including maritime), for monitoring of their
interests in many coastal areas and islands. Accord-
implementation, including for protecting the
ing to the court register,144 there are 18 active fishery
marine environment (including islands, coastal
cooperatives—4 operate in the Istria County, 2 in the regions, ports, and inland waterways), and tele-
Primorje-Gorski Kotar County, 4 in Zadar County, 4 communication infrastructure. Port Authority is
in Šibenik-Knin, and 4 in the Split-Dalmatia Coun- a non-profit legal entity established by the state
ty. Fisheries local action groups (FLAGs) are active to manage, construct, and operate a port open to
within Croatian Leader network.145 FLAGs is a part- public traffic that is of special, international, and
nership between stakeholders in fisheries and oth- economic interest to the Republic of Croatia. Na-
er stakeholders in local public and private sectors, tional port authorities are responsible for the eco-
to promote sustainable development of fishery and nomic development of port and terminal facilities
aquaculture. Their primary task is to elaborate and within the areas assigned to them. The Croatian
implement local development strategy in fishery Registry of Shipping (CRS) is a non-profit organi-
and aquaculture. There are 14 FLAGs in Adriatic Cro- zation under the Croatian law, which, according to
__________________________
ttps://sudreg.pravosudje.hr/registar/f?p=150:2:0::NO:RP.
144 h
https://www.lmh.hr/; Leader network is the European Network for Rural Development,currently integrated into the European CAP Network
145
(https://eu-cap-network.ec.europa.eu/about-european-cap-network_en).
ttps://lmh.hr/karta_flag.html.
146 h
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94 Charting Croatia‘s Blue Economy Pathways
Chapter 4
the Law on the Croatian Register of Shipping (OG holders to reconcile the competing interest for
No. 1996/81, 2013/76 and 2020/62) and the Charter maritime resources. The extended list of stake-
of the Register, is an independent, public welfare holders includes other institutions such as LAUs
foundation, among others, performing classifi- and counties, LAGs and FLAGs, NGOs, research
cation and statutory certification of inland and community and academic institutions, tourism as-
sea-going ships on behalf of the Flag State Admin- sociations, and coastal and island communities.
istrations, statutory certification and conformity
In the transition to blue economy, Croatia can
assessment of recreational crafts, certification of
further the public sector effort to tap in more
materials and products, conformity assessment
opportunities for effective partnerships with the
of marine equipment, conformity assessment of
private sector. Leveraging private sector invest-
pressure vessels, certification/registration of qual-
ments will augment the potential for substantial
ity management systems. Private sector organi-
economic growth and enhanced social well-being
zations such as shipping companies (Atlantska
in the Adriatic counties. Blue growth is recognized
plovidba, Tankerska plovidba, Rapska plovidba,
by the Adriatic Croatia Industrial Transition Plan
and Jadrolinija) and shipowners, shipyards, and
(MRDEUF 2022) as one of the priority sectors for
shipbuilding companies play and important role
targeted investments. It is related to the strategic
in the maritime transport sector while encounter-
priority areas: Smart and green transport, Digital
ing economic difficulties in recent years. Their role
products and platforms, and Sustainable and cir-
in the future development of the blue economy
cular food. The plan links industrial transition to re-
needs to be factored in. The Coastal Liner Service gional, innovation and industrial policies, focusing
Agency established pursuant to the Liner Ship- on value added niches by introducing the following
ping and Seasonal Costal Maritime Transport Act elements: unified approach at the NUTS2 level, pri-
(OG no. 33/06, 38/09, 87/09, 18/11, 80/13, 56/16) pro- oritization based on entrepreneurial discovery pro-
vides general framework for regulation of public cess, and new strategic regional partnerships based
passenger service in Republic of Croatia. on regional added value chains.
In accordance with the Law on the Organization
and Scope of State Administration Bodies (OG No. Innovation, Research, and Development
85/20), the Ministry of Tourism and Sports is re- Croatian universities are involved in scientific re-
sponsible for tasks related to strategy and tourism search on the marine environment. One of them
policy development for the sector, including tour- that stands out is the Department of Marine Stud-
ism developments and investments. Croatia has a ies of the University of Split with a strong focus on
system of Tourist Boards which are organizations blue economy research. While the universities and
that operate on the principle of destination man- research institutions already collaborate with the
agement and are established to promote and de- NGOs on the topic of marine environment, such as
velop tourism in the Republic of Croatia and the World Wildlife Fund (WWF) Adria, Association Biom,
economic interests of legal and natural persons Association for Nature, Environment and Sustain-
providing hospitality and tourism services or en- able Development Sunce, Blue World Institute from
gaging in other activities directly related to tourism Rovinj, and many others, creating a wider network
and destination management. Croatia has 1,379 for knowledge exchange with the global ocean re-
travel agencies which act as intermediaries to pro- search community and could open the gates for in-
vide organization of multi-day trips and offer pack- novation in the Croatian blue economy space.
age tours and day trips for domestic and foreign
tourists and visitors in Croatia. The global innovation trends provide new oppor-
tunities for the regions in transition such as Adri-
A shift from a single-sector approach to address atic Croatia. Croatia has already formulated the ar-
overfishing, pollution, and unplanned coastal de- eas for actions promoting innovation147 aligned with
velopment needs the engagement of all stake- the EU framework for blue growth in Adriatic Croatia.
__________________________
Republic of Croatia, Ministry of Regional Development and EU Funds (MRDEUF) 2022a, 71 and 2022b.
147
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95
Charting Croatia‘s Blue Economy Pathways
Chapter 4
© Benan Berhan
There are also good examples of research projects climate changes in Mediterranean small farms –
implemented by Croatian universities, for example, SEA FENNEL4MED).
by the University of Split, which aim to highlight the
opportunities for emerging blue economy sectors. The Regional Innovation Scoreboard (2023)148
These include research on marine aquaculture (for appraised Croatia as the Emerging Innovator
example, An innovative, ecological approach to in the Adriatic region. Croatia’s innovation in-
growing mussels on ropes made of recycled ma- dex stands at 69.9 percent of the EU average in
terials with eDNA barcoding and pasteurization 2023. The relative strengths include the following:
of edible shells), on environmental monitoring (for overall digital literacy of total population is above
example, Water management solutions for re- the EU average; performance business process
ducing microbial environment impact in coast- innovations increased 10.7 percentage points in
al areas), and on the Mediterranean coastal ag- 2023 compared to 2022. Nonetheless, overcoming
riculture (for example, Innovative sustainable the low level of business sector investment in R&D
organic sea fennel (Crithmum maritimum L.)- (only 10 percent of the EU average) could advance
based cropping systems to boost agrobiodiver- Croatia’s science development. Emerging sectors
sity, profitability, circularity, and resilience to are significantly affected by global trends such as
__________________________
The European Innovation Scoreboard provides a comparative assessment of the Research and Innovation performance of EU member states,
148
other European countries, and regional neighbors. It helps countries assess the relative strengths and weaknesses of their national innovation sys-
tems and identify challenges that they need to address. The European Innovation Scoreboard 2023 was released on July 6, 2023.Croatia, Slovakia,
Poland, Latvia, Bulgaria, and Romania are emerging innovators; European innovation scoreboard (europa.eu).
contents
96 Charting Croatia‘s Blue Economy Pathways
Chapter 4
to low career prospects and limited resources for
research. Many young researchers, after obtain-
ing doctoral degrees (PhD), leave the country. The
R&D legal provisions need to be revisited to foster
science and innovation and stimulate collabo-
ration with economic sectors including the blue
economy sectors.
Greater effort will be needed to connect sci-
ence with the public sector and businesses to
spur innovation including in the emerging blue
economy sectors. The policy and decision-mak-
ing capacity of relevant ministries and institutions
could be strengthened by scientific input from
the R&D community. Croatia still invests relative-
ly small amounts of R&D funds per capita in basic
research, applied research, and experimental de-
velopment. Croatia’s spendings on R&D149 for 2021
is 1.27 percent—much lower that EU average 2.27
percent and the OECD average of 2.71 percent.
Croatia also spends a lot less on higher educa-
tion R&D and on businesses compared to EU and
© Benan Berhan OECD peers.150 Only 1 percent of R&D in higher ed-
ucation institutions is financed by companies, and
the cooperation between SMEs and universities is
low (4 percent of SMEs in Croatia cooperate with
the consequences of the COVID-19 pandemics,
universities, in contrast to 10 percent in the EU28).
changes in global economic power, technological
Although Croatia is trying to move away from pre-
changes (artificial intelligence, nanotechnologies,
dominantly basic research, investments in applied
biotechnologies, and other key enabling technolo-
research and intellectual property registration are
gies [KETs]), population aging and negative demo-
still low. A potential source for increasing the na-
graphic trends, climate change and sustainable
tional resources for R&D is from the EU Horizon
use of resources, security issues, urbanization, and
Europe Framework Program.151 The program’s pol-
future jobs.
icy supporting instruments extend beyond tradi-
Croatia’s research capacity is mainly in the uni- tional R&D topics to actively foster green and digi-
versities and institutes. Many research depart- tal transitions. The program has a budget of €94.4
ments in commercial firms have disappeared billion over seven years (2021–2027),152 of which at
over the last few decades. The R&D community least 35 percent will be devoted to climate-related
often lacks strategic foresight in key areas of de- actions, support for the transition of maritime in-
velopment. R&D suffers from a ‘brain drain’ due dustries to climate neutrality.
__________________________
(https://databank.worldbank.org/source/world-development-indicators#.
149
https://ec.europa.eu/eurostat/statistics-explained/images/9/94/Gross_domestic_expenditure_on_R_and_D_by_sector%2C_2021_%28%25%2C_rela-
150
tive_to_GDP%2C_ordered_by_the_expenditure_in_the_business_enterprise_sector%29_04-10-2022.png.
https://ec.europa.eu/info/horizon-europe_en.
151
152 Cluster 6 of the Strategic Plan specifically targets the sustainable Blue Economy: “Research and innovation will support the transition to a climate
neutral, sustainable and productive Blue Economy, including thriving aquaculture, fisheries and emerging sectors such as marine biotechnology.
Innovative nature-based solutions will unlock the potential of the sustainable bioeconomy and replace fossil-based, carbon-intensive and harmful
materials with innovative, climate-neutral, bio-based, non-toxic materials and chemicals. Innovative solutions, a non-toxic and more circular use of
resources and the mainstreaming of circular systems will contribute to achieving zero polluted land, soil, water and air, seas and oceans, including
by taking a multi-stressor approach.”
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97
Charting Croatia‘s Blue Economy Pathways
Chapter 4
Table 11. R&D Stakeholders in Existing BE Sectors153
Blue growth Coastal tourism Shipbuilding and repair Fisheries and aquaculture
industries
Locations Islands and mainland Dubrovnik (Sustjepan), Brač, Kali, Rijeka, Rovinj, Ston,
coast Vela Luka, Korčula, Split, Šibenik, Zadar
Trogir, Zadar, Rijeka,
Bakar, Kraljevica, Pula
Specialized ■
Center for support- ■
AluTech – Business In- ■
Aquaculture Research Center
business and ing smart and sus- novation Center, Šibenik (CIRA) of the University of
research in- tainable cities of the (advanced materials) Dubrovnik
frastructure University of Rijeka ■
Metris – Materials Re- ■
Center for marine research
■
Center for Urban search Center, Pula Institute “Ruđer Bošković”
Transition, Architec- (shipbuilding, smart Rovinj
ture and Urbanism industry) ■
Mariculture Development
of the University of ■
CEKOM Brodogradnja Center ŠKŽ – under construc-
Rijeka – Delta Lab d.o.o., Split (shipbuild- tion (aquaculture)
■
Institute for Agricul- ing) ■
Blue-green center of Zadar
ture and Tourism ■
CEKOM for advanced County – under preparation
Poreč mobility, Split (ship- (agriculture, fishing)
■
Department of Bio- building) ■
Croatian center for autoch-
technology, Universi- ■
Maritime Electronics thonous fish and crusta-
ty of Rijeka Center, Split (shipbuild- cean species of karst waters,
■
Tourist incubator in ing) Otočac (fishery)
Opatija (tourism) ■
Institute of Oceanography
and Fisheries, Split (fisheries)
Seafood ■ Center for innovation and entrepreneurship Rijeka
processing; ■
Technology Park Split (information and communication technology [ICT], smart
building and industries)
equipping
■
Dubrovnik Sea and Coastal Institute
seafood
■
Step Ri – Technology Park Rijeka (ICT, smart industries)
processing
facility ■
Torpedo production park – PORIN (additive technologies)
■
Business and Innovation Center iNAVIS, Šibenik (blue economy)
■
CPZI – Center for Popularization of Science and Innovation of the Istrian County,
Pula
__________________________
lan for industrial transition of Adriatic Croatia, page 29; https://strukturnifondovi.hr/wp-content/plugins/pdfjs-viewer-shortcode/pdfjs/web/view-
153 P
er.php?file=https://strukturnifondovi.hr/wp-content/uploads/2022/02/Plan-za-industrijsku-tranziciju-Jadranske-Hrvatske_lektorirano_clean.pd-
f&attachment_id=&dButton=true&pButton=true&oButton=false&sButton=true).
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98 Charting Croatia‘s Blue Economy Pathways
Chapter 4
Blue growth Coastal tourism Shipbuilding and repair Fisheries and aquaculture
industries
Relevant high ■
Faculty of Electrical Engineering, Mechanical Engineering and Shipbuilding, Split
education (shipbuilding, smart industry)
institutions ■
Faculty of Civil Engineering, Architecture and Geodesy, Split (green construction)
■
Faculty of Management in Tourism and Hospitality, Opatija (tourism)
■
Faculty of Natural Sciences in Pula
■
Faculty of Civil Engineering, Rijeka (green construction)
■
Maritime Faculty, Rijeka (shipbuilding)
■
RIT Croatia, Dubrovnik (tourism)
■
Study of energy efficiency and renewable sources of the University of Zagreb, Šibenik
(green technologies)
■
Jurja Dobrila University in Pula
■
LIBERTAS University in Dubrovnik
■
University of Dubrovnik (UNIDU)
■
University of Rijeka (Department of Biotechnology)
■
University of Split (Ecology and Sea Protection and Marine Fisheries studies)
■
University of Zadar (Department of Ecology, Agronomy and Aquaculture, Center for
Karst and Coastal Research, Center for Interdisciplinary Sea and Maritime Research –
CIMMAR, Zadar)
■
Center for Food Technology and Biotechnology within the Faculty of Food and
Biotechnology of the University of Zagreb, Zadar
■
Istrian Polytechnic Pula
■
Technical Faculty, Rijeka (smart industry)
Professional ■
Educational and research center Torpedo of the Maritime Faculty in Rijeka
education ■
Regional centers of competence in tourism: Split, Pula, Opatija and Dubrovnik
and lifelong
■
Regional centers of competence in mechanical engineering: Vocational School of
learning
Vice Vlatković Zadar and Industrial Crafts School Šibenik
■
Regional center of competence in electronics and computing: Vocational Technical
School Split
Domestic economic activities that depend on food and make a positive impact on tourism sec-
maritime resources can benefit from greater col- tor revenues multiplied through food value added
laboration between scientific institutions and chains, if the food is delivered locally.154 The Adriatic
businesses. Digital technologies play an import- Croatia Industrial Transition Plan155 has identified
ant role in connecting fisheries and tourism and three priority blue economy sectors and actions for
monitoring and optimization of production. Digital advancing innovation (Table 12).
technologies could facilitate the supply of fresh fish
__________________________
epublic of Croatia, MRDEUF 2022a, 63.
154 R
Republic of Croatia, MRDEUF 2022a, 29–34.
155
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99
Charting Croatia‘s Blue Economy Pathways
Chapter 4
Table 12. Blue Economy Priority Areas for Innovation
Vessels of the future Luxury coastal tourism Smart fishery and aquaculture
■
Additional investment in ■
Support to small and medium ■
Support investments in R&D
green and autonomous ships, entrepreneurs for integration and commercialization of inno-
smart solutions for ship repair, in the regional value chains vations
and smart solutions for repair ■
Innovative solutions for sup- ■
Support growth and develop-
of vessels ply, management, improved ment of innovative startups
■
Port of the future visibility, sustainable develop- and SME entrepreneurs in
■
Strengthen partnerships for ment in synergy with other priority niches (for example, by
new product development activities, improved competi- de minimis subsidies for inno-
■
Use de minimis subsidies,156 tiveness vative solutions)
technology transfer, and dig- ■
Innovative solutions for more ■
Enable smart skills develop-
ital transition to integrate efficient communication and ment for industrial transition.
SMEs and promote entrepre- meeting the needs of tourists, ■
Subsidy schemes for large
neurship within regional value application and development and SME entrepreneurs and
added chains of local suppliers branding innovation clusters, centers of
skills. excellence, startups to support
■
Innovative solutions for tourist smart skills development for
destination management new product niche develop-
■
SmarTech solution for accom- ment and skills needed for
modation, gastronomy, nau- markets, safety standards, de-
tical tourism, digital nomads; sign and use of new materials;
green solutions in coastal flexible production tailored to
tourism specific customer needs
Regional Partnerships: EUSAIR – some long lines and traps). The marine area of at
least 2,700 km², recognized as an essential nursery
A Common Maritime Agenda for
and spawning ground for several marine species,
Blue Economy is located outside the territorial waters of Italy and
Enhanced regional cooperation in the Adriatic Croatia.157
Sea can ensure that the sea is safe, secure, clean, Croatia is part of the Union for the Mediterra-
and sustainably managed. The transboundary co- nean (UfM), a regional partnership supporting
operation between Croatia and other Adriatic coun- numerous initiatives for the development of the
tries (Italy, Slovenia, Bosnia and Herzegovina, and blue economy. Croatia is also a partner of the Blue
Montenegro) has been formalized through a series Med Initiative from 2014, aiming to foster regional
of treaties and legal acts. A recent effort on trans- integration and knowledge base on Blue Growth in
boundary cooperation, supported by significant the Mediterranean. BlueMed aims to promote joint
contributions from Croatian and Italian scientists, actions at the Mediterranean level on relevant re-
brought the 41st session of the General Fisheries search and innovation priorities. The initiative has
Commission for the Mediterranean (GFCM) in Oc- identified key challenges including MSP and ICZM.
tober 2017 to the adoption of the EU proposal for The Strategic Research and Innovation Agenda
the establishment of a Fisheries Restricted Area in (SRIA), updated in 2017, considers MSP and ICZM
the Jabuka/Pomo pit, effectively banning demersal among the key sectoral enablers in the Mediterra-
fishing (that is, bottom-set nets, bottom trawls, and nean region.
__________________________
State aid mechanism designed for small amounts of funding.
156
157 European MSP Platform. MSP Country Information Profile Croatia – February 2022, www.msp-platform.eu.
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100 Charting Croatia‘s Blue Economy Pathways
Chapter 4
Blue economy is a pillar of the European Strate- ing nations158 toward a common framework for
gy for the Adriatic-Ionian Region (EUSAIR). The blue growth. EUSAIR is committed to action to-
EUSAIR aims to foster social, economic, and ter- ward a common, integrative approach in the Adri-
ritorial cohesion and to reduce the disparities in atic-Ionian basin, organized around four pillars—
the Adriatic-Ionian macro-region through cooper- blue growth, regional connectivity, environmental
ation. It promotes research, innovation and busi- sustainability, and sustainable tourism—and sev-
ness opportunities in blue economy sectors, the en thematic focus areas.159 In 2020, the European
adaptation to sustainable seafood production and Commission proposed a new ‘sustainable blue
consumption, and the improvement of the sea ba- economy’ approach, with the hope that industries
sins’ governance. EUSAIR comprises both EU and
and sectors related to the oceans, seas, and coasts
non-EU countries of the Adriatic and Ionian re-
across the EU would better align to achieve the
gions. In both cases, MSP is considered a relevant
objectives set forth in the European Green Deal
tool/process for the sustainable management of
(EGD) as a pathway toward greener and inclusive
marine space.
recovery from the pandemic and beyond. The le-
Croatia took over the presidency of the EUSAIR gal recognition of Croatia’s EEZ was an important
in June 2023 to steer the nine coastal neighbor- step in this regard.
© Benan Berhan
__________________________
158 EUSAIR members include Greece, Italy, Slovenia, Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, Serbia, and Croatia.
Thematic focus areas include blue technologies, fisheries and aquaculture, maritime and marine governance and services, maritime transport
159
and intermodal connections to the hinterland, energy networks, the marine environment (including transnational terrestrial habitats and biodi-
versity), and diversified tourism offers with sustainable and responsible tourism management.
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101
Charting Croatia‘s Blue Economy Pathways
Chapter 4
Table 13. EUSAR Strategic Pillars, Challenges, and Opportunities
Pillar 1 Pillar 2 Pillar 3 Pillar 4
Blue growth Connecting t Environmental quality Sustainable
he region tourism
Objective ■
To promote research, To strengthen mar- ■
■ To ensure a good ■ Diversification of
innovation, and itime safety and environmental and the macro-region’s
business opportunities security and devel- ecological status of tourism products
in blue economy op a competitive the marine and coastal and services along
sectors, by facilitating regional intermodal environment by 2020 with tackling
the brain circulation port system. in line with the relevant seasonality of
between research and ■
To develop reliable EU acquis and the inland, coastal, and
business communities transport networks ecosystem approach maritime tourism
and increasing their and intermodal of the Barcelona demand.
networking and connections with Convention. ■Improving the
clustering capacity. the hinterland, ■To contribute to the goal quality and inno-
■
To adapt to sustainable both for freight and of the EU Biodiversity vation of tourism
seafood production and passengers. Strategy to halt the offer and enhanc-
consumption, by devel- ■ To achieve a well-in- loss of biodiversity and ing the sustainable
oping common stan- terconnected and the degradation of and responsible
dards and approaches well-functioning ecosystem services in tourism capacities
for strengthening these internal energy the EU by 2020, and of the tourism
two sectors and provid- market supporting restore them in so far as actors across the
ing a level playing field the three energy feasible, by addressing macro-region.
in the macro-region. policy objectives of threats to marine and
■
To improve sea the EU—competi- terrestrial biodiversity.
basin governance, tiveness, security of ■
To improve waste man-
by enhancing supply and sustain- agement by reducing
administrative and ability. waste flows to the sea
institutional capacities and, to reduce nutrient
in the area of maritime flows and other pollut-
governance and ants to the rivers and
services the sea.
Topics Topic 1 – Blue technolo- Topic 1 – Maritime Topic 1 – The marine envi- Topic 1 – Diversified
gies transport ronment tourism offer
Topic 2 – Fisheries and Topic 2 – Intermodal Topic 2 – Transnational (products and
aquaculture connections to the terrestrial habitats and services)
Topic 3 – Maritime and hinterland biodiversity Topic 2 – Sustainable
marine governance and Topic 3 – Energy and responsible
services networks tourism manage-
ment (innovation
and quality)
Coordi- Greece and Montenegro Italy, Serbia, and Slovenia and Bosnia and Croatia and Albania
nators North Macedonia Herzegovina
Source: EUSAIR Adriatic-Ionian Pillars, https://www.adriatic-ionian.eu/pillars/
Croatia is also a partner of the BlueMed Initia- research and innovation priorities. The initiative has
tive, set up in 2014 to foster the integration of identified key challenges including MSP and ICZM.
knowledge and efforts to develop Blue Growth SRIA, updated in 2017, considers MSP and ICZM
in the Mediterranean. BlueMed aims to promote among the key enablers in the Mediterranean re-
joint actions at the Mediterranean level on relevant gion.
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102 Charting Croatia‘s Blue Economy Pathways
Chapter 5
Chapter 5.
Financing Croatia’s
Blue Economy
Transition
© Benan contents
Berhan
103
Charting Croatia‘s Blue Economy Pathways
Chapter 5
Key takeaways
■ Financing will be a crucial enabler for the transition to a blue economy from both public and private sectors.
■ Croatia posted the highest ratio of GDP to total general government expenditure on environment (1.5 per-
cent of GDP) among the EU27 countries. Considering the value of economic cost of environmental degra-
dation at 2.3 percent of GDP—resulting in ecosystem loss, water and air pollution and untreated waste. Cro-
atia needs to adopt a more targeted spending approach to increase the resources for waste management
and wastewater treatment to tackle this challenge in Adriatic Croatia.
■ Croatia’s environmental investment, including in the Adriatic area, are lower than the EU average. While
Croatia performs better than some of its peers in the EU, the government spending on environment is con-
tingent on the current state of the economy, including GDP per capita.
■ The ‘green’ fiscal reform will go a long way in enabling Croatia’s green-blue transition and removing of the
obstacles for implementing costly environmental protection policies. The fiscal decentralization reforms
need to address the factors inhibiting introduction of new taxes in the coastal counties. National action for
introduction of carbon taxes to mitigate climate change could spur sustainable initiatives and blue econo-
my innovation.
■ The role of the public sector in protecting the environment has to go far beyond the limited budget resourc-
es. Using public funds to leverage private investments could lead to effective implementation of environ-
mental policies and emphasizing spending preferences.
■ Medium-term blue economy financing needs stand at an estimated €7.5 billion investment to meet financ-
ing needs in water supply, sanitation, and the seafood value chain. To meet EU Directive obligations, about
€7.0 billion investment is required in water and sanitation infrastructure, with €2.6 billion yet to be publicly
funded. The EU, along with local Croatian entities, plans to fund €3.4 billion, necessitating €2.6 billion from
the private sector. The seafood value chain seeks €0.5 billion in investments, with €0.27 billion expected
from the private sector to enhance various facets including small-scale fisheries and aquaculture.
Preserving the coastal and marine natural assets All three tiers of the government—the central
is critical for the sustainable growth of the blue government, counties, and the local government
economy in Croatia. Current growth prospects of level (towns, cities, and municipalities), have spe-
the key marine-based sectors might be limited by cific responsibilities for environmental protec-
the rate of environmental degradation, which is a tion and need resources. The Law on Local and Re-
growing concern that needs action and financial gional Self-Government (OG NN 33/01, 60/01, 129/05,
109/07, 125/08, 36/09, 36/09, 150/11, 144/12, 19/13, 137/15,
resources. The vulnerabilities related to climate
123/17, 98/19, 144/20) sets the legal framework for
change also call for additional financial resources
the division of competences between the govern-
to address climate threats with economic conse-
ment levels, while the Law on Local and Region-
quences for tourism and agriculture. Starting with
al Self-Government Financing (OG 127/17, 138/20,
‘no regret’ institutional measures160 to address the
151/22, 114/23) provides the legal framework of the
shortcomings affecting the water resources from local government finance system. The basic source
untreated wastewater and flaws of the solid waste for the financing of local and regional government
management systems161 could tackle the current is shared taxes between the central government
institutional constraints and management failures and the lower levels of government. Grants from
and ensure long-term resilience and better protec- the central government have increased and are also
tion of Croatia’s natural capital and marine areas. available to the local governments. Yet, the fiscal
__________________________
160 The World Bank Group Country Partnership Framework for the Republic of Croatia for the period FY19–FY 24.
he eutrophication of Croatia’s surface water resources is already leading to economic damages, with the damage to ecosystems’ health estimat-
161 T
ed at €80 million per year.
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104 Charting Croatia‘s Blue Economy Pathways
Chapter 5
autonomy of local self-government units in Croatia The revenues from environmental taxes repre-
is relatively limited in determining the tax base and sent 3.1 percent of GDP (2021)163 (Figure 28). The
rates of tax revenue, but not non-tax revenue. There energy tax revenue accounts for almost 80 percent
is also limited autonomy in defining the purpose of of Croatia’s environmental tax revenue. Motor fuel
local-level expenditure. It is not uncommon to wit- taxes were originally introduced for fiscal rather
ness disparities between the statutorily delegated than environmental reasons, and account for the
functions and the quality, quantity, and/or financial bulk of this revenue. In the first half of 2022, the
viability of the delivered public services. government significantly reduced the excise duties
Environmental taxes in Croatia account for a sig- on motor vehicles, by more than 15 percent on av-
nificant share of the total tax revenues and are erage, although these changes were meant to be
among the highest in the EU.162 These are taxes temporary and will be reversed. The revenue-ori-
on energy products (including CO2 taxes), transport ented environmental tax structure needs to be
(excluding fuel, which is covered by energy taxes), complemented by necessary regulatory incentive
pollution, and natural resource fees. Although the for pollution reduction for Croatia to achieve the en-
overall environmental taxes, including taxes on en- vironmental protection goals. Green fiscal reforms
ergy use, are considered high, Croatia does not im- will play a critical role in enabling the green-blue
pose significant levies on pollution and CO2 emis- transition, with carbon pricing through taxes, as the
sions. key policy to mitigate climate change.
Figure 28. Environmental Taxes by Sources
in % of GDP
HR LV BG SI PL EE SK HU LT CZ RO EU-27
Energy Transport (excluding transport fuel) Pollution/Resources
Source: European Commission, DG Taxation and Customs Union, based on Eurostat data.
__________________________
bid, p. 79.
162 I
World Bank. Croatia Public Finance Review 2023.
163
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105
Charting Croatia‘s Blue Economy Pathways
Chapter 5
In 2021, Croatia posted the highest ratio of GDP could adopt a more targeted spending approach
to total general government expenditure on en- to distinctly increase the resources for waste man-
vironment (1.5 percent of GDP) among the EU27 agement and wastewater treatment to tackle the
countries164 This is slightly higher that the Neth- challenge. For instance, in 2021 Greece has spent
erlands (1.4 percent of GDP), Belgium and Malta on ‘waste management’ the highest share of GDP
(1.3 percent of GDP each), and Greece (1.2 percent among all EU27 countries (0.8 percent of GDP) (Fig-
of GDP). Croatia spent 0.7 percent of GDP on ’en- ure 29). The Netherlands spent 0.6 percent of GDP
vironmental protection n.e.c.’ 165, and 0.3 percent on ‘waste management’ and 0.4 percent of GDP on
on ’waste management’ (Figure 30). The latter is ‘wastewater management. Malta spent 0.6 percent
rather low considering the value of economic cost of GDP on ‘waste management’ only. These num-
of environmental degradation—resulting in eco- bers are closer to the 0.8 percent of GDP average
system loss, water, waste, and air pollution. Croatia across the EU member countries (Figure 29).
Figure 29. Environmental Investments Per Capita in EU
Environmental Investments Per Capita in 2019 (in euro)
450
400
350
300
250
200
150
100
50
0
Malta
Slovenia
Portugal
Bulgaria
Greece
Spain
Latvia
Lithuania
Romania
Croatia
Estonia
Austria
Finland
Italy
Cyprus
EU
Ireland
Czechia
Germany
France
Slovakia
Denmark
Belgium
Poland
Sweden
Source: Eurostat (gov_10a_exp). Data extracted in February 2023.
Croatia’s environmental investment, including ing costly environmental protection policies. There
in the Adriatic area, are lower than the EU aver- is an ongoing discussion on fiscal decentralization
age. While Croatia performs better than some of its and on the opportunities to introduce new taxes
peers, the government spending on environment is and charges pursuing effective allocation of exist-
contingent on the current state of the economy, in- ing resources, such as property taxation, including
cluding GDP per capita. Environmental investment taxes on non-exploited arable land, taxes on unused
decisions are guided by the EU principles on afford- business premises and apartments. These, howev-
ability, a limiting factor, when prioritizing environ- er, may not be implementable unless real property
mental protection. Another limiting factor is the rights are defined. The role of the public sector in
current demographic trend and decreasing popu- protecting the environment needs to go far beyond
lation in the coastal areas. The possibility of intro- the limited budget resources. Using public funds to
ducing new taxes in the coastal areas is even more leverage private investments could lead to effective
modest due to a declining taxation base of coastal implementation of environmental policies and em-
counties, another crucial obstacle for implement- phasizing spending preferences.
__________________________
otal general government expenditure on environmental protection, 2021 (% of GDP) – Source: Eurostat (gov_10a_exp).Data extracted in February
164 T
2023.
Expenditure not elsewhere classified (n.e.c.) relating to environmental protection.
165
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106 Charting Croatia‘s Blue Economy Pathways
Chapter 5
Figure 30. Structure of Total General Government Expenditure on Environment by Functional
Classification (2021)
Total general government expenditure on ‚environmental protection‘, 2021 (% of GDP)
1.6 Total general government expenditure on ‘environmental protection’, 2021 (% of GDP)
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0
EU*
euro area 19*
euro area 20*
Belgium
Bulgaria
Czechia
Denmark
Germany*
Estonia
Ireland
Greece
Spain*
France*
Croatia
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal*
Romania
Slovenia
Slovakia
Finland
Sweden
Iceland
Norway
Switzerland
Waste management rotection of biodiversity and landscape
P
Waste water management R&D Environmental protection
* provisional Pollution abatement nvironmental protection n.e.c.
E
Source: Eurostat. EU10 represents unweighted averages of 10 EU member states from the Central and Eastern Europe
Since 2019, public investments in Croatia have upcoming EU financing period to leverage stra-
increased and the level has been maintained to tegic private investment to create economic
support better absorption of the European Struc- opportunities. Croatia’s mid-term development
tural and Investment Funds. Public investments agenda aims to implement ambitious and sophis-
which are more growth-friendly compared to most ticated reforms to boost growth, build economic
other spending categories—as they raise the level resilience, and maximize the benefits of Eurozone
of country’s physical capital—have been stable at membership. These critical reform areas also need
around €2.6 billion annually, but the share in GDP investments in human capital and natural resource
remained below the average for EU peers.166 How- management to preserve and leverage Croatia’s
ever, public investment in percentage of GDP has natural assets and sustain the growth of key eco-
remained below the average of the peers in the CEE nomic sectors. The success of these reforms will ul-
region.167 Countries such as Estonia, the Czech Re- timately depend on Croatia’s accelerated transition
public, and Slovenia, all at a higher level of develop- to blue economy.
ment and with less abundant access to grant fund-
Marine and maritime-related investments can get
ing from the EU budget, invest more than Croatia.
support through a variety of EU funding instru-
When it comes to the composition of investment,
ments. This includes the ‘Horizon Europe’ program
like other EU countries, Croatia invests heavily in
and its mission on healthy oceans, seas, coastal and
the transport infrastructure as well as in school and
inland waters, and the new LIFE program. Helping
medical facilities and equipment, while investment
the economy to navigate through the ‘green and
in environmental protection remain subdued and
blue’ and ‘digital’ transitions, additional EU-pow-
less targeted.
ered investment avenues for specific themes can
With the right set of policy action, Croatia can be found under the EU BlueInvest platform168 and
both increase the returns on public investment— the future InvestEU program (under infrastructure
by effectively using EU funds in the current and and research windows). The Connecting Europe
__________________________
166 World Bank. Croatia Public Expenditure Review 2023.
167 bid, p. 80.
lueInvest aims to boost innovation and investment in sustainable technologies for the blue economy, by supporting readiness and access to
168 B
finance for early-stage businesses, SMEs, and scale-ups. https://webgate.ec.europa.eu/maritimeforum/en/frontpage/1451.
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107
Charting Croatia‘s Blue Economy Pathways
Chapter 5
Facility II (for example, related to upgrading port fore, more and innovative financial approaches will
infrastructure, lowering the carbon footprint and be necessary to accelerate the transition to a blue
compliance with air quality legislation), the new economy and transcend beyond the convention-
Innovation Fund (for demonstration of innovative al sources of financing. Nowadays, financial mar-
low-carbon technologies related to renewable en- kets around the world witness growing interest
ergy and shipping) and various programs launched of investors in sustainable financing. To tap into
by the European Investment Bank (for example, these new opportunities Croatia’s national polices
Green Shipping Guarantee Program and Green need to contour a framework for sustainable blue
Shipping Program Loan) provides funds for eligible
investments where everyone involved could ben-
investment projects.
efit. This could change the investment landscape
The blue economy transition is often constrained of Croatia by increasing the financial capability of
by the lack of adequate public resources, fiscal blue economy stakeholders and help curtail the
measures, and limited private investors. There- negative impacts on the marine environment.
Box 8. Blue Finance at a Glance
What is blue finance?169
While sustainable finance is defined by applying Environmental, Social and Governance (ESG) prin-
ciples in financial services decision-making, blue finance is generated where the use of proceeds or
sustainability-linked loans or bonds direct finance is specifically toward projects and programs that
have positive impacts for the ocean economy.
Banks, insurers, and investors all have a part to play in providing finance for a sustainable ocean econo-
■
my. The Sustainable Blue Economy Finance Principles170 were launched in 2018 to provide guidance
on how this can be done in a way that aligns with SDG 14, Life Below Water. The principles cover 14
characteristics that signatories endorse, which include protecting the marine ecosystem, being trans-
parent with information, and using a science-led approach. The principles also provide guidance on
how to finance a sustainable ocean economy.
■ The UN Blue Bond Initiative has developed practical guidance to issuing a blue bond171 that meets
the UN Global Compact and Sustainable Ocean Principles, building on the principles and framework
developed by the International Capital Markets Association (ICMA) for the issuance of green, social,
and sustainability-linked bonds. Green, social, and sustainability-linked loans can also be applied to
financing the blue economy.
■ The EU Taxonomy for Sustainable Activities172 directs finance toward activities aligned with meet-
ing the EU’s climate and energy targets. The taxonomy recognizes the role of the ocean economy and
encourages investment flows into ocean-related activities. In 2022, the Platform for Sustainable Fi-
nance Technical Working Group issued guidance which included specific reference to blue economy
activities, including sea and coastal transport, hotels and camping grounds, fishing and processing of
fish; nature-based solutions for the protection of coastal waters, including the conservation of coastal
wetlands, mangrove forests, and seagrass beds as a natural barrier for coastal defense; and coastal reef
conservation and restoration.
__________________________
169 B ased on summary by Darian McBain “What is Blue Finance?” – Grantham Research Institute on climate change and the environment (lse.ac.uk).
170 T he Principles – United Nations Environment – Finance Initiative (unepfi.org).
ractical-Guidance-to-Issue-a-Blue-Bond.pdf (ungc-communications-assets.s3.amazonaws.com).
171 P
172 E U taxonomy for sustainable activities (europa.eu).
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108 Charting Croatia‘s Blue Economy Pathways
Chapter 5
Demand for Private Blue Finance The blue economy-related investment demand can
be broken down into three categories, depending
Financing the investments for Croatia’s blue on the specificity of the targeted use of proceeds
economy development will require a combina- with regard to water resource. The last category of
tion of targeted financing with defined use of projects meets for example the EU Sustainability
proceeds in addition to general purpose financ- Taxonomy’s “sustainable use and the protection of
ing. water resources” objective173:
Projects that generally support economic development, but do not specifically target
Category 1
sustainability or water-related objectives..
Projects that meet sustainable financing objectives as defined for example in the EU
Category 2 Sustainability Taxonomy, which defines objectives and a list of concrete activities that
qualify as sustainable.
Projects that specifically target the improvement of the quality and availability of water
Category 3
as a resource, as defined for example in SDGs 6 and 14.
To prioritize blue economy financing, it makes ffshore renewable energy production
■ O
sense to differentiate the projects and resulting
investment needs for each category, as they imply Estimated investment needs into blue fi-
nance-eligible projects are estimated at €7.5
different financing instruments (discussed below)
billion, of which €3.0 billion needs to be pri-
from broadly available general purpose invest-
vate sector funded. The main areas of special-
ment financing and general sustainable financing
ized blue finance investment demand are water
from Croatia, which is discussed elsewhere.
supply and sanitation, and seafood value chain
The International Finance Corporation (IFC) has investments. This does not consider investments,
published Blue Finance Principles to address for example in tourism, which advance the blue
sustainable financing targeted at SDGs 6 and economy overall but do not specifically address
14. IFC Blue Finance Principles174 are building on SDGs 6 and 14.
the Green Bond Principles and focus on financing
Croatia needs approximately €7.0 billion in-
projects that directly contribute to SDGs 6 and 14
vestments into the water supply and sanita-
and improve availability and quality of water re-
tion infrastructure to meet its obligation under
sources. These covers activities in the areas of
the EU Water Directives, of which €2.6 billion
ater supply and sanitation (‘WSS’)
■ W are not yet funded by public financing. WSS
projects directly aim at SDG 6 through reducing
isheries, aquaculture, and seafood value chain
■ F
‘non-revenue’ water losses in the supply system
cean-friendly and water-friendly products,
■ O and improving the connection of users to the san-
chemicals, and plastic-related sectors itation system. The total investment for Croatia
■ S
ustainable shipping and port logistics comprises €3.4 billion for water supply and €3.6
billion for sanitation. While the Implementation
arine ecosystem restauration
■ M
Plan for Water Utility Directives calls for an imple-
ustainable tourism services
■ S mentation of ALL projects by 2028, we estimate
__________________________
ttps://finance.ec.europa.eu/sustainable-finance/tools-and-standards/eu-taxonomy-sustainable-activities_en
173 h
https://www.ifc.org/en/insights-reports/2022/guidelines-for-blue-finance
174
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109
Charting Croatia‘s Blue Economy Pathways
Chapter 5
that after delays 85 percent, that is, €6.0 billion of Project risk mitigation will be key. The 156 do-
the investments will be implemented until 2030, mestic utilities companies which will be at the
while the remaining 15 percent can be deferred heart of the implementation of the WSS projects
until after 2030. For these investments, €3.4 bil- are generally underfunded and lack required ca-
lion in funding are planned by the EU as well as pacity. To successfully implement the plans, and
co-financing by Croatian Water, the MESD, utility manage the projects, careful planning, prepara-
companies, and regional/local governments. This tion, and oversight will be essential.
implies a demand for private sector funding of the
Croatia’s seafood value chain requires invest-
balance, €2.6 billion.
ments of €0.5 billion, of which €0.27 billion is
Renewal of infrastructure and expansion of required from the private sector. Croatia’s sea-
connections are core tasks. Currently the WSS food value chain can be enhanced through (a)
setup is characterized by an aging infrastructure investments into small-scale fisheries (including
(pipes, treatment plants). Nationally, the level of electrification of boats), cold chains, intermediate
public sewage service coverage was 57 percent processing facilities, traceability systems (VMS –
(2018). Only 5 percent (244,000 people equivalent) vehicle monitoring system and REM – remote elec-
of municipal wastewater discharged is sufficiently tronic monitoring), land-based seafood processing
treated. To comply with the UWWTD, 4.9 million facilities and (b) aquaculture. The total investment
PE of wastewater load must be appropriately treat- potential for this sector is estimated at €0.5 billion,
ed. Additionally, improvements in the treatment of of which €0.23 billion is expected to be funded by
technological wastewater are required. The 2028 public sources, leaving €0.27 billion in need of pri-
objectives of the Implementation Plan for Water vate sector funding.
Utility Directives are (a) a reduction of non-revenue
Table 14 shows the details of the blue finance
water to 20 percent, (b) an increase of connection
eligible private sector investment demand for
rates to 95 percent for water supply/80 percent for
Croatia. These, however, do not include public
sewage (98 percent in agglomerations), (c) treat-
sector funding, for WSS and seafood value chain
ment of 100 percent of wastewater in agglomera-
investments, as there is no specific blue finance
tions, and (d) good water status for 100 percent of
category for public funding.
the surface water bodies.
Irrigation projects represent a specific chal-
lenge. Croatia has favorable conditions for diverse
farming, but it covers less than a half of its needs
and it is self-sufficient only in the production of
wheat, corn, poultry, eggs, and wine. This is par-
tially due to droughts, which occur as an extreme
hydrological phenomenon in Croatia every third to
fifth year and depending on the intensity and du-
ration reduce the yields of crops. As only 2 percent
(30,000 ha out of 1,500,000 ha) of agricultural land
is irrigated in Croatia through irrigation systems
or abstracted from wells. In the EU27, on average
18 percent of arable land is irrigated. Croatian Wa-
ters NAPNAV 175 action plan will enable irrigation on
additional 25,000 ha of arable land in 2024–2030.
All the new irrigated areas will require appropriate
water-efficient equipment (included in the total © Benan Berhan
investment above).
__________________________
175 NAPNAV – National Project of Irrigation and Land and Water Management in the Republic of Croatia.
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110 Charting Croatia‘s Blue Economy Pathways
Chapter 5
Table 14. Blue Finance Eligible Private Sector Investments
Project description IFC Private Investment Market
Taxonomy potential readiness
activity [€, millions]
Public water infrastructure projects focusing on A.1, A.2, A.4 1,730 Ready
water supply
Public water infrastructure projects focusing on B.1, B.2, B.3 1,240 Ready
wastewater/sanitation
Water-efficient irrigation for agriculture; investment A.4 221 Ready
in water-efficient irrigation equipment
Seafood processing; building and equipping F.5, F.6 100 Ready
seafood processing facility
Aquaculture F.1, F.2 100 Ready
Small scale fisheries and small pelagic fisheries; F.4, F.5 75 Ready
green transition of boats (electrification),
equipment, cold chain, medium processing and
product development, labeling and branding,
traceability systems, vehicle monitoring system and
remote electronic monitoring
Wastewater treatment for food and beverage B.1 31 Ready
industry
Pesca tourism; green transition of boats H.1 20 Ready
(electrification) and equipment, reconstructing
boats for reception of tourists, building and
equipping catering facilities
Sewage sludge utilization; Treatment and utilization B.3 11 Ready in
of sewage sludge 3+ years
Improvement of environmental efficiency of tourist A.4 10 Ready
facilities
PET bottle recycling facilities D.3, D.4 10 Ready
Wildlife sanctuaries; eDNA systems, aquariums, G.1 9 Ready in
observation and recovery center 3+ years
Re-use of treated wastewater for agriculture, B.3 4 Ready in
horticulture investments into recycled water 5+ years
distribution network and water efficient equipment
for irrigation using wastewater
Recycling yards at nautical and fishing ports; E.6 1 mln Ready
construction and equipping of a recycling yard,
equipping a facility (drop-off point) for receiving
sanitary wastewater from boats
Source: IFC / Exergia opportunity mapping for Croatia.
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111
Charting Croatia‘s Blue Economy Pathways
Chapter 5
Supply of Sustainable Financing use blue finance initially in response to investor re-
quest or foreign owner implementing stricter ESG
The Croatian funding market made some prog- requirements to a subsidiary legal entity in Croatia.
ress regarding general sustainable financing. In Self-starting promotion is not present and regula-
October 2022, Raiffeisen Bank Croatia issued the tory requirements (for example, through Securities
first sustainable bond, developed in alignment with and Exchange Commission or Financial Services
International Capital Markets Association frame-
Supervision Agency) in addition to national cli-
work, and which attracted €200 million through
mate-related objectives have not directed climate
fundraising. IFC was the anchor investor with €130
change mitigation alignment.
million. In July 2022, Meritus Ulaganja, a leading
business process outsourcing provider, issued the It remains at the banks’ discretion to assess
first sustainability-linked bond by fundraising €40 whether imposing blue finance use limitations
million. In July 2023, Zagrebacki Holding issued the and reporting requirements is in their interest.
first municipal utility sustainability-linked bond in Sub-client perception often leads to primarily so-
central and southern Europe. IFC was an anchor in- liciting own exclusive financial advantages of blue
vestor by subscribing €72.5 million in €305 million capital in comparison to universal financing. Both
issuance.
supply and demand hurdles represent a financial
Financial intermediaries in Croatia currently do cost without clear visibility of recovery. To achieve
not offer blue finance loans. No company has is- broader recognition, case studies and advisory ser-
sued a blue finance bond. No specific blue econ- vices may be critical to bridge the gap in identify-
omy financing instruments are available for inves- ing climate risks and opportunities at governance,
tors and users. The private sector is encouraged to strategy, and investment levels.
© Benan Berhan
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112 Charting Croatia‘s Blue Economy Pathways
Chapter 6
Chapter 6.
Toward the Blue
Economy Pathway
© Benan contents
Berhan
113
Charting Croatia‘s Blue Economy Pathways
Chapter 6
Taking the blue economy path determined by responsibility as well as effectively coordinated ar-
integration and sustainability will open new de- rangements in policy and decision-making among
velopment frontiers for Croatia. Blue economy of- sectors and in addressing institutions’ capacity lag.
fers a viable, indeed the only viable, maritime devel-
Croatia needs a National Blue Economy Vision
opment path forward by providing an opportunity
and a Strategy, accompanied by a Roadmap to ac-
to combine environmental stewardship with eco-
celerate the sustainable transition of blue econ-
nomic growth by tapping into maritime-based in-
omy sectors. This will bridge the gaps that many
dustries that are projected to significantly outpace
strategic documents lack, such as the estimation of
global economic growth. By strategically investing
investment and potential funding sources and op-
in and planning for a blue economy, Croatia can
erational costs. On one hand, the BE strategy would
leverage its geographical advantages to achieve
facilitate a holistic approach and consolidation of
improved socioeconomic outcomes and sustain-
the governance structures under a strong nation-
able development. The sooner Croatia identifies the
al leadership; on the other hand, the roadmap will
national and regional opportunities for sustainable
growth in the existing and emerging blue econo- identify common priorities and actions to be imple-
my sectors, aligned with the shifting market trends, mented in the coming years in an integrated, con-
Croatia can take full advantage of these opportuni- sistent, and comprehensive manner with a multi-
ties to chart a sustainable economic development sectoral approach and via continuous engagement
in Adriatic Croatia. of all stakeholders. Annex 4 provides an outline of
the governance framework that could inform the
Currently, Croatia’s maritime economy is un- preparation of the roadmap.
sustainable and is already stretched (for exam-
ple, over-tourism causing pressure on natural The review of sustainability threats in the exist-
resources). Climate change will only compound ing blue economy sectors raises concerns about
these pressures. Most of these impacts will be con- the increasing pressures and degradation of
centrated on the coast. In-depth analysis and map- coastal and marine ecosystems. These can ham-
ping of blue economy resources, impacts, risks, and per Croatia’s future development opportunities.
status change as a result of the economic activities Like in many other countries, marine uses, related
could contribute to Croatia’s ongoing effort toward activities, and resources are traditionally managed
reducing the uncertainties for industry, govern- on a sectoral basis involving independent entities
ment, and local communities. It may help fill the pertaining to different jurisdictions. The efforts to
gap in relation to a lack of understanding of the full mitigate these risks will need to contend with the
impacts of continuing business-as-usual activities. fragmented policy and legislative environment,
A few possible takeaways which Croatia could use which may not be sufficiently fit-for-purpose.
to address the challenges and strengthen the tran- While there are good examples of using blue econ-
sition of blue economy sectors follow below. omy tools such as MSP in several locations in Adri-
atic Croatia, there is limited knowledge of how ma-
rine uses, activities, and resources are managed by
multiple marine sectors and jurisdictions and as-
Policy Development, Planning, and sociated governance challenges. A wider adoption
Institutional Framework of good practices and tools used to identify sector
priorities and contextualize their interlinkages will
Croatia has taken steps to strengthen the sec-
allow more efficient policy integration of strate-
toral policies through transposition of EU legis-
gic, regulatory, and institutional frameworks and
lation. This includes, among others, policies and
goals.
legislation on environmental protection and water
quality, transport and connectivity; waste manage- Despite the progress in expanding spatial plans
ment; energy efficiency; fisheries and adoption of of Adriatic countries, their sustainability and
sectoral strategies and plans. Nonetheless, for the MSP discourses have largely remained apart.
transition to blue governance, Croatia needs align- The existing spatial planning regulations can serve
ment of issues relating to institutional power and as a framework for integrated spatial governance
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114 Charting Croatia‘s Blue Economy Pathways
Chapter 6
of the coastal area, islands, and maritime space. Protection of Marine and Coastal
However, specific aspects of the MSP and ecosys-
Resources
tem approach need to be considered to address
current challenges. Reducing the conflicting policy The insights from the institutional review sug-
objectives of maritime sectors could help address gest that Croatia needs to increase the capacity
a broader and systemic public sector issue. In line and agency collaboration for protection of ma-
with EU objectives for just transition the social ob- rine ecosystems. Integration of blue governance
jectives of marine spatial plans could emphasize structures and clear departmental responsibilities
equitable access to resources and multidimension- in the transition to sustainable blue economy will
al sustainability aligned with national development incentivize change-behavior formats promoting
goals. This includes a commitment to explore and individual, corporate, and societal responsibility for
incentivize cross-sectoral and co-located activities, protection of blue natural capital. This includes the
including those pertaining to future sea-based re- government agencies with mandates to enforce
newable energy and aquaculture. various regulations for environmental protection
and for delivering municipal services such as waste
Insufficient intersectoral coordination can ham- management and wastewater treatment. Address-
per the path toward sustainable blue economy. ing marine litter pollution and waste management
In addition, a central coordinating institution gov- gaps in the coastal and marine areas could prevent
erning the blue economy agenda could facilitate degradation of valuable landscapes and sustain the
a resolution of potential conflicts between the re- quality of bathing waters in compliance with WFD
sponsibilities at national, regional, and/or local au- and MSFD implementation to achieve GES.
thorities (for example, in the case of management
of maritime domain). Another practical approach The missing link to sustainable use of coastal
will be to formalize the leading role of a ministry to and marine ecosystems could be addressed by
act as a coordination body. As the sustainable blue the stronger involvement of Croatia’s scientific
economy strives to strike a balance between the and research community. Scientific information
environmental protection and economic activities, and interpretation of sectors’ user conflicts, pres-
the MESD could be an obvious choice to take the sure factors, shortfalls, and exclusions could stimu-
lead in setting the new approach toward a sustain- late synergetic solutions to reconcile and mitigate
able blue economy. Two new framework laws have governance obstacles. The establishment of blue
been passed in the Parliament that are considered economy structures including a blue economy de-
crucial for setting the path for a sustainable blue partment and a research institute could provide
economy. These are the Law on Maritime Domain the basic ‘implementation architecture’ necessary
and Seaports (adopted and entered into force on to support the government’s blue economy agen-
July 23, 2023) and the Law on Sustainable Tourism da in a holistic manner. Precisely, the sustainable
(pending adoption), both providing the new insti- blue economy recognizes and taps into diverse
tutional setup for management of the coastal ar- knowledge systems to increase evidence-based
eas by giving more power to local self-government decision-making and fully understand the adverse
units. Thus, it is necessary to establish an effective impacts and trade-offs of persistent user conflicts.
system of cooperation and coordination at the
management and professional-administrative lev-
els, both nationally and regionally. Coordination in Inclusion and Stakeholder
the development of regulatory, strategic, and plan- Participation in Transitioning
ning documents relevant to the management and
to Blue Economy
protection of maritime and coastal areas at the na-
tional and county levels needs to be strengthened. Transition to blue economy is not just for and
This may include capacity building and public ad- about government actions, it also involves busi-
ministration training, improvement of data man- ness sector, civil society, academia, communi-
agement, and monitoring of environmental condi- ties, and individuals. Redefining the roles of all
tions in the coastal area. communities in the coastal area and islands to ad-
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Charting Croatia‘s Blue Economy Pathways
Chapter 6
© Benan Berhan
dress their concerns must be brought at the fore- removing barriers to diversification, effective coor-
front to address the increasing demands for land dination across the three tiers of government, a for-
resources and growing urbanization, marine pollu- mal collaborative mechanism in place across mar-
tion, and current and future climate change risks. itime sector agencies, including those responsible
Developing a comprehensive profile of stakeholder for allocation of public resources and for improving
interests and contacts at the earliest will be essen- the investment environment.
tial to identify a wider pool of stakeholders. On one
Croatia needs to accelerate the local uptake of
hand, these are the stakeholders to be considered
blue economy opportunities. The lack of clear ave-
in the MSP process. On the other hand, ensuring
nues for stakeholder participation and for commu-
appropriate representation from different sectors
nicating the concept of blue economy and sustain-
and involving them early in management decisions
ability across the government and blue economy
will advise businesses on the economic and finan-
stakeholders was identified as a challenge. This
cial planning opportunities and local benefits.
would require a change in the local mindsets as
The blue economy provides an enabling environ- well as skills and capacity to boost the uptake of
ment for integration of economic plans which blue economy opportunities.
considers the respective strengths of each sector,
pressures on resources, and demographic issues.
The blue economy governance has the potential
to enable effective integration of economic, social,
Mobilizing Blue Finance
and environmental dimensions of sustainability Croatia has built partnerships with internation-
in cross-sectoral policy and planning coherence. al organizations that can be employed to secure
The challenges which were identified range from access to finance for blue economy transition,
high dependency of the maritime economy on a expertise and local capacity, policy advice, and
small number of economic activities (coastal and R&D collaborations. Starting with the adoption
maritime tourism), to a lack of sufficient resourc- of a comprehensive Blue Economy Strategy and
es to sustain the industry development (fish food a Roadmap for implementation anchored on the
processing). These challenges could be addressed national strategic development goals could attract
by commitment to a strategic resource oversight, the attention of strategic investors.
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116 Charting Croatia‘s Blue Economy Pathways
Chapter 6
Prioritizing financing for sustainable blue econo- ue of natural capital and the quality of life of the local
my in the coastal and island communities under people. To address the up-front questions posed in
a national BE strategy and ‘green’ the ‘blue’ in- this Report, a set of complex socioeconomic chal-
vestments in key sectors could promote business lenges and ecological issues were reviewed, visu-
development and innovation, generate benefits to alized, and discussed as a platform to present the
coastal and island communities, and safeguard the business-as-usual course and two development
natural capital. A priority pipeline of such projects pathways indicating different levels of ambition and
could be integrated in the Blue Economy Roadmap time horizons in support of Croatia’s transition to a
and complemented by an investment plan to take sustainable maritime economy (Table 15):
maximum benefits of the EU funds.
usiness-as-usual (BAU) course is a continu-
■ B
Increased public investments in R&D and in- um of current trajectories based on economic
novation could help leverage private capital growth and sector conflicts for space and marine
and mobilize external resources in support of resources. It could potentially deepen the chal-
growth of small and medium businesses in the lenges and augment the negative impacts. The
blue economy. Prioritizing public support for in- main environmental threats include pollution,
novative activities such as sustainable food and inadequate management of waste, marine litter
biomass production offshore as well as renewable and plastic pollution, overfishing, and growing
energy in a way that preserves ecosystems could construction. Future growth prospects under
strengthen the sustainability profile of Croatia’s BAU could be at an increasing risk due to frag-
maritime economy. mented economic planning and development
and unregulated resource exploitation.
Local and regional authorities in the coastal
counties could play a greater role in the defini- oward Environmental Sustainability path
■ T
tion of investment priorities and use of Integrat- is an interim track with a horizon of about five
ed Territorial Investment and community-led years that reflects a higher degree of sustain-
local development tools.176 Their involvement will ability achievements while complying with EU
offer multiple avenues for targeted and integrat- environmental protection objectives including
ed solutions of territorial challenges especially in certain aspects of WFD and MSFD. This is a path
non-urban areas of the Adriatic coast related to the that would allow for addressing the cumulative
blue economy. The definition and implementation effects on marine resources from overuse, pol-
of ‘joined-up’ growth strategies among the NUTS2 lution, and a lack of adequate enforcement of
coastal counties177 and beyond could help improve regulations. However, concentrating solely on
the economic planning and implementation ca- environmental protection could be socioeco-
pacity of respective administrations and address nomically challenging (for example, social af-
their development needs and potential. In addition, fordability of new investment, impacts on local
such a bottom-up approach will facilitate access to economy, innovations, competitiveness) without
sustainable financing of coastal counties and of EU- leveraging concessional financing and targeted
SAIR countries for sharing of the economic benefits support to low-income consumers. Nonethe-
from transitioning to blue economy. less, the environmentally sustainable path could
serve as a stepping-stone for transitioning to
blue economy.
Pathways of Croatia’s Maritime
he Blue Economy path has a longer-term
■ T
Economy
implementation horizon; demonstrates a shift
Croatia’s has a vibrant coastal economy which toward a holistic, integrated approach that re-
is still far from being sustainable. Continuing the places the previous individual sectoral focus;
past development trends could undermine the val- has the governance policies in place for resolv-
__________________________
erritorial agenda 2030 promotes place-based approaches and integrated territorial development in Europe, and cohesion policy is the EU’s main
176 T
policy tool to achieve this. https://urban.jrc.ec.europa.eu/urbanstrategies/.
he current NUTS 2021 classification of territorial units for statistics in EU is valid from January 1, 2021 and lists 92 regions at NUTS1, 242 regions at
177 T
NUTS2, and 1,166 regions at NUTS3 level; https://ec.europa.eu/eurostat/documents/345175/629341/NUTS2021.xlsx.
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117
Charting Croatia‘s Blue Economy Pathways
Chapter 6
ing resource conflicts and tapping in new devel- tor governance to cultivate a greater sense of
opment opportunities. It is the one that makes responsibility and accountability on the develop-
it easier to remove critical barriers such as lack ment outcomes and use of common maritime
of infrastructure, climate change impacts, and resources. It is the framework for incentivizing
unsustainable tourist density to enable other and leveraging more financial resources for sus-
maritime sectors to grow. It employs blue sec- tainable blue economy sectors.
Table 15. Croatia’s Maritime Economy: Development Pathways
Path Description Major change or trends
1. Business- Current development patterns Built-up areas in the coastal counties expand
as-usual represent the baseline conditions: and the number of uninhabited housing units
national policies are harmonized drastically increase
with EU acquis marred by lagging n 2030, 1,562 km of coastline could be ur-
■ I
implementation and lack of banized (24.8% of entire coastline)
capacity and resources, fragmented n 2012–2030, the share of the coastline that
■ I
institutional responsibilities, and could be urbanized would exceed all previ-
coordination; ineffective pollution ous periods together
control and water quality regulation n 2031, there would be around two dwell-
■ I
ings per household; or 50% of dwellings
Silo-sector policies due to lack of
would be empty
effective coordination on sector
development goals and lack of an Environmental quality in urban areas worsens
integration mechanism and ecosystem losses increase
astewater from nautical tourism boats will
■ W
MSP exists in a fragmented manner
increase as toilets are flushed with seawater,
There is poor monitoring or evidence increasing the pressure from higher effluent
of solid waste related to tourism volumes.
Air pollution from large cruise ships rojected emissions of PM2.5 particles from
■ P
in the Adriatic Croatia is not properly cruise ships in the Split city port alone in
monitored 2022–2030 will amount to 515,81 tons caus-
ing a total of about 100 years of life lost
Adaptation to climate change partially
(YLL), or environmental costs equivalent of
implemented in coastal areas
€3,294,978 (Kanaet, 2022).
During peak season, tourist intensity rate in-
creases. By 2035, the number of tourists and
residents would be equal in peak seasons in
Adriatic Croatia (if the present demographic
trends continue, the ratio will even worsen)
■ If the number of commercial beds is fixed at
the level of 2022 numbers, occupancy rate
will reach 99% in 2051.
Competition over marine and coastal resourc-
es increase
■ L and-take for new housing will cause an
annual loss of agricultural production (wine
and olive oil only) of at least €2 million
■ N autical tourism will rise and so will the
occupancy of land and sea (occupancy rate
is already over 70%)
contents
118 Charting Croatia‘s Blue Economy Pathways
Chapter 6
2. Toward En- Harmonization with EU environmen- Built-up areas continue expansion outside
vironmental tal acquis for protection of resources protected areas
Sustainability completed Enforcement of environmental regulations
(Develop- Developing and adopting an integrat- improved but pressures and impacts remain
ment based ed blue economy policy and ensuring an issue
on corrective harmonization with EU blue economy Less marine pollution, including from untreat-
policy drivers directives ed wastewater and from nautical and cruise
for address- National BE Strategy and a roadmap tourism
ing interrelat- adopted Positive development trend in provision of en-
ed economic
MSP improved and covered the whole vironmental services in major tourist locations
and envi-
coastal area Coastal defense infrastructure built to protect
ronmental
Environmental monitoring improved from climate hazards
issues)
Positive trends in achieving GES on Adverse demographic trends continue
major descriptors. Questionable affordability of new investments
Increased conservation efforts in MPA for local population (rise in living costs versus
Major urban agglomerations with income rate)
plans for wastewater treatment plants Additional operational and maintenance costs
Beach water quality along the entire for the coastal economy
coast meeting ‘blue flag standards’
and EU bathing water quality norms
Adaptation measures to climate
change picking up
3. The Blue A strategy for BE and roadmap imple- Urbanization expansion subdued.
Economy mented and regularly updated Built-up area relative to BAU decreased/sus-
Path MSP for the entire coastline complet- tained.
(Transition ed and adopted Resource competition subdued.
toward a Ecosystem management approach New blue economy sector projects under im-
sustainable adopted plementation
blue econ-
Effective coordination and integration Environmental pressures controlled and
omy where
of blue economic sector goals checked.
environmen-
Interinstitutional mechanisms for co- Wastewater treatment and waste manage-
tal protection
ordination of BE sectors effective ment improved and according to new EU
and econom-
ic activities go BE policies informed by R&D directives.
hand in hand) Enabling the development of innova- Wider use of new energy renewable sources as
tive applications and services in new well as transmission and distribution
and emerging areas EU funding opportunities realized and under
Social and equity issues in the marine implementation.
economy addressed to the extent Stakeholders’ inclusion attained.
possible.
Raised quality of living in urbanized coastal
Traffic connectivity along Adriatic Cro- space and adjacent rural areas
atia, based on carbon-free solutions
Increased coastal economy resilience.
A framework for BE financing adopted
Green fiscal reforms and budget cli-
mate tagging effective
contents
119
Charting Croatia‘s Blue Economy Pathways
Chapter 6
In the years to come, the blue economy in Adri- Aiming for sustainable models that have multiplier
atic Croatia will be shaped by the state of coast- effects on the local economy could shift the tour-
al and marine resources, human activities, and ism sector on a sustainable path. However, tourism
governance framework. The impacts from climate need not remain a dominant economic activity.
change, pollution and urbanization would linger Under almost all climate scenarios for Europe, it is
and play a role. Extensive urbanization, and land- projected that climate change will cause, some-
take, will lead not only to a loss of ecosystem services times, a dramatic drop of tourism arrivals in south-
and value but may also hamper economic growth ern European countries (more than 7 percent in
and quality of life. Current demographic figures Greece and more than 8 percent in Cyprus). Con-
are alarming. The population, especially of working trary to that, Croatian coastal tourism could exhib-
age, is decreasing and emigrating; the elderly pop- it a modest rise until 2100 (between 0.05 percent
ulation is growing. At the same time, the number of and 1.08 percent). Whichever of these scenarios will
foreign workers (generally with low education level) materialize for Croatia, the decision-makers need
is increasing. Technological progress, innovations, to undertake necessary measures to address cur-
new technology and products are slowly picking up rent challenges, which were discussed. The climate
due to a lack of readiness or willingness to embrace change impacts could prolong the tourist season
change and to adopt new cultures. and shift tourism from sea-sun-and-sand to other
attractions because of high temperatures and po-
Integrated governance of maritime sectors can
tential health hazards. While the structure of the
connect different scales of actions, mitigate
future blue economy of Croatia is hard to predict in
conflicts, and open opportunities in the estab-
lished blue economy sectors. Croatia can take full the absence of an official stance on the issue, devel-
advantage of those to maximize the net benefits oping a strategic vision and a roadmap could chart
for coastal communities by focusing on industries new avenues for Adriatic Croatia. In the meantime,
that depend upon and can coexist with and benefit while markets continue to rule, and investment di-
from healthier marine ecosystems of the Adriatic rections continue to be shaped by EU policies, the
Sea. Establishing long-term, sustainable fisheries imperative of embracing sustainability goals for the
and aquaculture will be beneficial to both the en- coastal and marine economy of Croatia will prevail.
vironment, local economy, and country traditions. The World Bank Group aims to help Croatia to
Aquaculture, or marine fish/shell farming, could
mainstream the blue economy approach and
increasingly play a greater role in food security,
shift from single investments in individual
sustainability, product quality, and local sourcing
maritime sectors to more systematic, integrat-
in the tourism value chains. Ongoing construction
ed, holistic management of seascape resourc-
of vacation properties and real estate boom con-
es. By identifying constraints, opportunities, and
sumes plenty of resources and may not offer viable
trade-offs between sectors at every phase of poli-
economic propositions in future. Losing pristine
cy planning, investment-project design, and im-
coastal resources and overurbanization could cause
plementation, further WBG engagement could
recreation values to be lost and affect the incomes
spur public resources for sustainable private sector
of local communities from tourism. While in the
growth (de-risking growth) and incentivize private
short-term marine and coastal recreation activities
investment, all underpinned by key cross-cutting
remain focused on beach going and recreation-
sustainability considerations. Such a proposition
al boating and fishing, other niches linking beach
is opportune as it may span between advisory as-
tourism to hinterland tourism offerings can contrib-
sistance for the development of BE strategy and
ute to local economic growth with relatively little
action plan, accompanied by analytical work as-
environmental impact.
sessing risks and opportunities for BE, support for
Undoubtedly, tourism will remain an important building partnerships and enhancing stakehold-
economic activity in Adriatic Croatia. Croatia is er collaboration, as well as providing innovative or
already picking up models for sustainable tour- traditional financing for BE sectors’ development,
ism that could open more growth opportunities. building on sectorial synergies and interactions.
contents
120 Bulgaria: Toward Blue Economy Development
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123
Charting Croatia‘s Blue Economy Pathways
Annexes
Annex 1: Notes on Terms
and Definitions Used in The Report
The below definitions of the terms used in the Croatia Blue Economy report are not representative, or in-
dicative of, official definitions provided by, or endorsed by, the World Bank. The definitions serve the sole
purpose of informing the reader of the report, and do not reflect definitions or any other work conducted
by the World Bank beyond this report.
Term Definition Source
Maritime Maritime economy encompasses the sum of all eco- Report Team
Economy nomic activities based on maritime assets, goods, and
services. The term does not separate between sectors
or geography, nor does it consider climate, environ-
mental, or socioeconomic sustainability, with oil and
gas falling under this definition.
Coastal Coastal economy addresses the same activities as Report Team
Economy maritime economy, however, it is specifically oriented
around maritime activities occurring in and around
coastal areas. This term does not consider any dimen-
sion of the sustainability of activities but aims to cap-
ture the geography of the maritime activities.
Blue Economy Blue economy incorporates sustainability consider- Report Team
ations into the concept of maritime economy, includ-
ing only the maritime-based economic activities that
align with the Paris Climate Accord and combine en-
vironmental stewardship with socioeconomically sus-
tainable growth, without regard for where the activities
occur. In contrast to maritime economy, this term usu-
ally excludes oil and gas.
Adriatic Adriatic Croatia is one of the four NUTS2 (Nomencla- Report Team
Croatia ture of Territorial Units for Statistics) non-administra-
tive regions of Croatia since 2021. The region forms the
coastal part of the country.
Natural Capital Natural capital is another term for the stock of renew- UN: https://seea.un.org/con-
able and nonrenewable resources (for example, plants, tent/natural-capital-and-eco-
animals, air, water, soils, minerals) that combine to yield system-services-faq
a flow of benefits to people.
Maritime A subsection of the term ‘Natural Capital’, describing Report Team
Assets/Capital the natural capital stemming from seas, oceans, and
water, including ecosystems, species, freshwater, land,
minerals, as well as natural processes and functions re-
lating to maritime assets.
contents
124 Charting Croatia‘s Blue Economy Pathways
Annexes
Good In 2008, the EU adopted the MSFD to maintain clean, EC: https://environment.
Environmental healthy, productive, and resilient marine ecosystems ec.europa.eu/topics/ma-
Status (GES) while securing a more sustainable use of marine re- rine-environment_en#:~:-
sources. The directive requires member states to devel- text=The%20Directive%20
op national marine strategies to achieve, or maintain defines%20Good%20Envi-
where it exists, ‘good environmental status’. Such sta- ronmental,clean%2C%20
tus should have been achieved by 2020. The marine healthy%20and%20produc-
strategies comprise regular assessments of the marine tive%E2%80%9D.
environment, setting objectives and targets, establish-
ing monitoring programs, and putting in place mea-
sures to improve the state of marine waters.
The measures should also include spatial protection
measures, such as a coherent and representative net-
work of marine protected areas. All these actions must
be done in close coordination with neighboring coun-
tries at the regional sea level. Annex III of the Directive,
detailing lists of characteristics, pressures, and impacts
that member states need to consider in their marine
strategies, was revised in 2017.
Ecosystem The ecosystem approach is a strategy for the integrated CBD: https://cbd.
Approach management of land, water, and living resources that int/kb/record/deci-
promotes conservation and sustainable use in an eq- sion/7748?Event=COP-07
uitable way. The ecosystem approach is based on the
application of appropriate scientific methodologies
focused on levels of biological organization, which en-
compass the essential structure, processes, functions
and interactions among organisms and their environ-
ment. It recognizes that humans, with their cultural di-
versity, are an integral component of many ecosystems.
Public Good Public goods are those that are available to all (‘nonex- IMF: https://www.imf.org/
cludable’) and that can be enjoyed over and over again en/Publications/fandd/is-
by anyone without diminishing the benefits they deliv- sues/2021/12/Global-Public-
er to others (‘nonrival’). The scope of public goods can Goods-Chin-basics
be local, national, or global.
Marine Marine resources are the living and nonliving elements Report Team
resources that can be found in the seas and oceans and have
an intrinsic economic value that may be exploited for
human beings. SGD 14 ‘Life below water’ is about con-
serving and sustainably using oceans, seas, and marine
resources.
Marine Spatial UNESCO-IOC defines MSP as “a public process of an- Used by the World Bank:
Planning alyzing and allocating the spatial and temporal distri- https://documents.world-
(MSP) bution of human activities in marine areas to achieve bank.org/en/publication/doc-
ecological, economic, and social objectives that have uments-reports/document-
been specified through a political process” (Ehler and detail/099813206062230702/
Douvere 2009). idu0afe34d-
600494f04ee009e8c0edf-
0292c1a96
contents
125
Charting Croatia‘s Blue Economy Pathways
Annexes
Nature-Based NBS are actions to protect, sustainably manage, or re- World Bank: https://www.
Solutions store natural ecosystems, that address societal chal- worldbank.org/en/news/
(NBS) lenges such as climate change, human health, food feature/2022/05/19/what-you-
and water security, and disaster risk reduction effec- need-to-know-about-nature-
tively and adaptively, simultaneously providing human based-solutions-to-climate-
well-being and biodiversity benefits. change
Integrated ICZM is a dynamic, multidisciplinary, and iterative pro- European Environmental
Coastal Zone cess to promote sustainable management of coast- Agency
Management al zones. It covers the full cycle of information collec- https://www.eea.europa.eu/
(ICZM) tion, planning (in its broadest sense), decision-making, help/glossary/eea-glossary/
management, and monitoring of implementation. integrated-coastal-zone-
ICZM uses the informed participation and cooperation management
of all stakeholders to assess the societal goals in a given
coastal area, and to take actions toward meeting these
objectives. ICZM seeks, over the long term, to balance
environmental, economic, social, cultural, and recre-
ational objectives, all within the limits set by natural
dynamics. 'Integrated' in ICZM refers to the integration
of objectives and also to the integration of the many
instruments needed to meet these objectives. It means
integration of all relevant policy areas, sectors, and lev-
els of administration. It means integration of the terres-
trial and marine components of the target territory, in
both time and space.
Inclusive Inclusive growth is about raising the pace of growth IMF: https://www.eli-
Growth and enlarging the size of the economy, while leveling brary.imf.org/display/
the playing field for investment and increasing produc- book/9781616353797/ch008.
tive employment opportunities. It focuses on ex ante xml#:~:text=diversifica-
analysis of sources of and constraints to sustained high tion%20and%20competi-
growth, and not only of one group, that is, the poor. tion.-,IG%20is%20about%20
raising%20the%20pace%20
of%20growth%20and%20
enlarging,%3B%20that%20
is%2C%20the%20poor.
Blue Energy Blue energy, also known as ocean energy, refers to a Report Team
diverse range of renewable energy technologies that
harness the power of the oceans, seas, or any other
maritime assets. This form of energy capitalizes on var-
ious aspects of the marine environment. For instance,
wave energy exploits the physical properties of ocean
waves, while tidal stream energy harnesses the kinetic
energy of water flowing through channels.
Blue Economy BEDF is a set of analytical tools and technical assis- World Bank/EU:
Development tance to help countries define a roadmap to a diversi- https://thedocs.world-
Framework fied and sustainable maritime economy, while building bank.org/en/doc/e5c1bd-
(BEDF) resilience to climate change. The core components of b0384e732de3cef6f-
the BEDF are (i) data, analysis, and dissemination; (ii) d2eac41e5-0320072021/
policy, institutional, and fiscal reforms; and (iii) foster- original/BH023-BlueEcono-
ing investment. my-FINAL-ENGLISH.pdf
contents
126 Charting Croatia‘s Blue Economy Pathways
Annexes
Blue ‘Blue governance’ is defined as the formal and informal Report Team (from report,
Governance processes of collective decision-making, planning, de- Para 184)
liberating, and capacity building by government and
civil society and market actors connected to marine
and coastal environment.
Blue Growth Relates to the governance of marine resources as a ho- EUR-Lex – 52012DC0494 – EN
listic management of complex marine and socio-eco- (europa.eu);
logical systems. Blue growth is an extension of the
http://www.oecd.org/
land-based policy strategy referred to as green growth,
greengrowth/
which the EU introduced in 2010. Blue growth relies
on the integrated management of multiple economic
sectors to optimally utilize maritime natural resources.
Blue Finance While sustainable finance is defined by applying En- Report Team (from Box 7).
vironmental, Social and Governance (ESG) principles
in financial services decision-making, blue finance is
generated where the use of proceeds or sustainabili-
ty-linked loans or bonds direct finance specifically to-
ward projects and programs that have positive impacts
for the ocean economy.
Environmental Environmental externalities refer to the economic con- UN, based on OECD:
Externalities cept of uncompensated environmental effects of pro- https://archive.unescwa.org/
duction and consumption that affect consumer utility sd-glossary/environmental-
and enterprise cost outside the market mechanism. As externalities
a consequence of negative externalities, private costs
of production tend to be lower than its ‘social’ cost. It is
the aim of the ‘polluter/user-pays’ principle to prompt
households and enterprises to internalize externalities
in their plans and budgets.
EU Taxonomy A cornerstone of the EU sustainable financing frame- Pursuant to: EU taxonomy for
work presenting an action plan on financing sus- sustainable activities (europa.
tainable growth and a classification system which eu)
establishes a list of economic activities that can be
considered environmentally sustainable. The Taxono-
my Regulation entered into force on July 12, 2020. It es-
tablishes the basis for the EU taxonomy by setting out
four overarching conditions that an economic activity
has to meet to qualify as environmentally sustainable.
contents
127
Charting Croatia‘s Blue Economy Pathways
Annexes
Annex 2: Notes on the Approach
and Data Used in the Analysis
The aim of the Report was to provide an overview of Croatia, but have their headquarters registered else-
the present state and possible future pathways to- where in Croatia; their figures are not in the num-
ward the development of blue economy in Croatia. bers presented, hence a part of the economic activi-
Taking into account the already defined BE sectors ties in Adriatic Croatia are missing (for example, INA,
as well as data and resource availability, the analysis oil and gas company, is registered in Zagreb and its
was conducted in two main phases and at two levels. results and economic results are included in Zagreb
County statistical accounts, regardless of where the
First, an overview of the economic trends in Adriatic
company operations actually take place).
Croatia was provided, using official open data from
different sources (both national and international), The background analysis aims to present the trends
aiming to set up the context of the future develop- in maritime sectors applying the longest possible
ment of BE sectors. time series. However, depending on the available
sources, the charts in the figures may differ in the
Second, the established BE sectors were analyzed,
starting years.
relying on available national data (sectoral statistics
and documentation) on the one hand, and the focus The second level of analysis covers the BE sectors.
group discussions (FGDs) on the other hand. FGDs The sectors were already predefined by EU and oth-
were held for each of the established BE sectors, er national documents. One could argue whether
aiming to find out more details on sectoral challeng- some other sectors, fast growing and/or contribut-
es and opportunities, as well as their experiences re- ing significantly to the coastal/national economy,
garding BE prospects, including the BE Governance using/influencing marine resources, should be con-
Framework in Croatia. FGD was also held with the sidered as BE sectors as well.
representatives of all relevant institutions to discuss Data used when analyzing these sectors were re-
the results and possible steps on the pathways to BE. trieved from national statistics (where possible) as
The data analysis is undertaken at two levels – an well as national strategic (sectoral) documents.
aggregate overview of the coastal economy and However, for reviewing the trends and contributions
blue economy sectors. of specific BE sectors, and especially in relation to EU
The first level refers to the coastal economy, more countries, data from the BE reports were used. These
precisely to the economy of Adriatic Croatia. Trends data are calculated according to specific methodol-
in volumes, shares in GVA and GDP by counties and ogy applied to all EU countries178. Thus, these data
economic sectors are presented for 2000–2020. are not comparable to data retrieved from the na-
These data are gathered from the National Bureau tional strategic documents/statistical sources.
of Statistics. There are also observations regarding the data
It is important to note that data are available only for used in the EU BE Report. First, some data incon-
the first level of NACE aggregation, so they do not sistencies stem from using different sources, for in-
represent the level of aggregation necessary for the stance on the employment numbers. Second, there
analysis of the individual BE sectors (for example, are data that refer to the aggregated activities and
one of the group of sectors according to the first level not solely related to the coastal areas (for example,
of the NACE aggregation encompasses agriculture, including inland water transport).
fishery and aquaculture, and forestry, but there was Therefore, numbers and figures used in the current
no data available for fishery and aquaculture per se). analysis encompass more activities than those in
As it refers to the economic data, for instance, data the EU Report on Blue Economy. Yet, the team is
on GDP/GVA, this is based on data related to the grateful for the opportunity to access data from the
companies registered in Adriatic Croatia. Neverthe- EU Blue report, specifically the dataset on Croatia’s
less, there are companies that operate in Adriatic blue economy.
__________________________
EU Blue Economy Report 2022, Annex 3.
178 I
contents
128 Charting Croatia‘s Blue Economy Pathways
Annexes
Annex 3: Economic Profiles
of Adriatic Counties of Croatia
The following paragraphs provide a quick glance of turing, ship construction, production of petroleum,
the economic profiles of the counties on the Adriatic petrochemical, pharmaceutical and other products,
coast of Croatia: wood processing industry, tourism and services sec-
tor, R&D, and new technologies, in cooperation with
Istria is the most developed county on the Adriatic
the academic community. Recently, tourism, trade,
coast, second only to the City of Zagreb. It boasts
and transport are taking over.
a diversified economy. Even though Istria has the
most developed tourist sector and it accounts for Lika-Senj County boasts rich natural environment,
one-third of the total national tourism income, tour- forests, and water reserves. The county has great
ism is only third in the economic structure of Istria, hydropower potential and rich agricultural land, sig-
following the processing industry, trade, and the ser- nificant potential for aquaculture development and
vices sectors. The industry is based on manufactur- tourism since 58 percent of the national parks in
ing of building material (lime, cement, bricks, stone), the Republic of Croatia are in the Lika-Senj County.
tobacco products, electrical machines and devices, The main economic activities in Lika-Senj County in-
automotive components, and glass, as well as on the clude wood industry, food processing, logistics, and
processing of metal, plastics, wood, and so on. The renewables power generation. Public administration
IT industry is surging, led by the world-famous com- and defense, education, health and social protection
pany Infobip and smaller companies with a prom- activities have the highest share of GVA in the coun-
ising future. Investments in the agriculture sector ty with wholesale and retail trade, transportation,
have been growing, supporting top-quality agricul- storage, accommodation, and food services follow-
ture produce. Istria boasts wine and food brands. ing suit. Tourism is on rise, both in the continental
The Istrian olive oils, wines, and organic products are and coastal parts. The GVA share of agriculture, fish-
renowned for their best quality. As an established ery, and forestry is 13 percent, which is a relatively im-
tourist destination Istria’s wholesale and retail trade, portant contribution. The position of the quarrying
transportation, storage, accommodation, and food and mining sectors is similar, and to a lesser extent
services have dominated the economic structure of manufacturing. Construction has recorded a mod-
Istria, followed by manufacturing, mining, and quar- est rise.
rying, indicating that the real sector (production) has
Zadar County has a scenic coastline with numer-
been prioritized. Public administration and defense,
ous islets, clear sea, and beautiful and diverse
education, human health, and social work activities
flora and fauna. The Paklenica National Park, three
are keeping a stable share, while real estate services
Parks of Nature (Telašćica, Velebit, and Vrana Lake)
and construction sectors are on the rise. Agriculture,
and protected natural sites with rich cultural and
fishery and forestry retain the slower share of the
historical heritage, support tourism, as the main-
country’s economy.
stay of the economy of Zadar County. The county
Primorje-Gorski kotar County is at the junction of has significant potential for nautical tourism. Tour-
central Europe and the Adriatic-Mediterranean ism, food-processing industry, fishing, mariculture,
routes. The county has the second highest GDP and and seafaring are key economic activities making
GVA in Adriatic Croatia and along with Istria leads in important contribution to exports and the develop-
GDP per capita indicator. The City of Rijeka, the coun- ment of Zadar County. More than 50 percent of the
ty’s administrative center, is the largest port in Croa- total fish catch on the Croatian side of the Adriatic
tia and an important port in Europe and the Med- is caught and landed in Zadar County. Three out of
iterranean. The Primorje-Gorski kotar County and a total of the four tuna farms registered in the Re-
the City of Rijeka boast ancient culture, rich history, public of Croatia are in this county. In addition to
and modern economy, fueled by industrial manufac- blue fish, Zadar County is also a leader in the culti-
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129
Charting Croatia‘s Blue Economy Pathways
Annexes
vation of white fish, especially sea bream and sea of GVA; professional, scientific, technical, administra-
bass. Fish processing has a centuries-old tradition in tive and support services around 5–6 percent, while
Zadar County. The fertile land of Ravni Kotari, Zadar ICT sectors, agriculture, fishery and forestry had the
County supports agriculture with special emphasis lowest share.
on ecological production. Quality wines and olive
The Split-Dalmatia County is the most populous
oils, fruits and vegetables, and dairy products are
and the largest county in the Adriatic coast of Cro-
produced in the county. Zadar County is a national
atia. The city of Split is the administrative center of
leader in terms of investments in renewable energy
the county which is strategically situated at the in-
resources, especially wind and solar energy. In 2019,
tersection of road, rail, and sea routes of national and
66 percent of the GVA was from wholesale and retail
international importance. The shipbuilding indus-
trade, transportation, storage, accommodation and
try is traditionally one of the most significant local
food services, public administration and defense, ed-
industries, with two of the large shipyards situated
ucation, human and social protection, professional,
in the cities of Split and Trogir. Rich sea resources
scientific, technical, administrative and support ser-
stimulated the development of fishery and fish food
vices, and also the real estate sector.
processing such as olive oil, jams, spreads, honey, tra-
Šibenik-Knin County is in the central part of the ditional cakes, and liquors. The Split-Dalmatia Coun-
Adriatic coast. Šibenik is the main urban center of ty is renowned as a prime tourist destination and a
the county. Tourism is extremely important for the center for industrial development, business zones,
economy of Šibenik-Knin County, supported by 2 production of car parts, metal, and electric compo-
national parks: Krka and Kornati, 3 nature parks, 6 nents. The county’s GVA structure is dominated by
significant landscapes, 2 nature monuments, and the service sectors, especially tourism. In 2019, 58.5
61 ecological areas under the Natura 2000 network. percent of the county’s GVA comprised service sec-
There are 7 protected cultural assets (5 intangible tors and trade, transport and storage, public admin-
and 2 tangible cultural assets) on the UNESCO’s list istration and defense, education, health, social and
of World Heritage Sites in the county. In addition, real estate service. The manufacturing sector grew
there are more than 3,000 berths in the 12 marinas. and contributed 8 percent; professional, scientific,
The tourist offer is still focused on the coastal belt, technical, administrative and logistics services con-
but the county has potential to diversify investments tributed 8 percent and construction 7 percent. The
into other tourist products by expanding the val- Split-Dalmatia County is an important ICT hub, with
ue chains in other segments including in the rural
multiple ICT investments and companies (more
tourism. Other important sectors of the economy
than 300 business entities). The county posted a
of Šibenik- Knin are trade, construction, and met-
steady growth of tourist visitors. The motorway con-
allurgy, which make a significant contribution to
necting Split with the continental part of Croatia and
the economy. The county is home to the leading
capital Zagreb and the south of the country (the city
aluminum industry, shipbuilding and building ma-
of Dubrovnik) and the development of air traffic, in-
terials industries. The main wine-growing areas are
cluding numerous low-cost flights, resulted in the
Pirovac-Skradin-Šibenik, Knin, Drniš-Promina, and
increase of foreign visitors. This growth was fueled
Primošten. More opportunities for development of
by construction and renovation of many hotels and
traditional agricultural products are outlined in the
other accommodation facilities, both on the coast-
‘Irrigation Plan’ Study focusing on traditional agri-
line and the islands in the Split archipelago. Notably,
cultural production (fruits, vegetables). Šibenik-Knin
these are the islands of Brač, Šolta, Hvar, and Čiovo.
County is recognizable for its production of prosciut-
to, cheese, and shellfish. Nonetheless, the economy Dubrovnik-Neretva County is the southernmost
of Šibenik-Knin is primarily service oriented with 60 county of Adriatic Croatia, covering a narrow and
percent of GVA (2019) generated by wholesale and inhomogeneous coastal strip separated from the
retail trade, transportation, storage, accommoda- hinterland by a steep mountain. Dubrovnik is the
tion, food service activities, public administration main administrative center of the county. The coun-
and defense, education, health and social activities, ty has two distinct zones – a relatively narrow lon-
and real estate services. Construction and manufac- gitudinal coastal area with a cape extending to the
turing were on the rise, each contributing 9 percent open sea and nearby islands, and the Neretva Valley
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130 Charting Croatia‘s Blue Economy Pathways
Annexes
– an agricultural area with an adjacent coastal strip. The tradition of wine making in the county has his-
The magnificent landscapes of Dubrovnik-Neretva torical and touristic value. In terms of GDP and GVA
are rich in biodiversity and thus a unique biodiver- per capita, the Dubrovnik-Neretva County is among
sity spot in the Mediterranean. Tourism is the most the above-average developed counties. Wholesale
important driver of the county’s economy. Agricul- and retail trade, transport, storage, accommoda-
ture and fishing also have significant potential. The tion and food services account for 41 percent of the
fertile agricultural lands located in the Neretva valley, county’s GVA. Public administration and defense,
‘Konavosko polje’, the Pelješac peninsula, and the is- education, health, and social services follow with 15
land of Korčula are nationally important, especially percent, construction comes next with 12 percent,
for the production of citrus fruits. Fishing is devel- and the real estate services with 10 percent. All oth-
oped in the Mali ston Bay, the Neretva Channel, and er sectors together contributed with 22 percent. The
the area of the islands of Mljet and Korčula. The pen- county’s economy is highly dependent on tourism
insula of Pelješac and island Korčula, contribute a and related services which makes the value chains
significant share of the viticulture and olive growing. vulnerable to market volatility.
contents
131
Charting Croatia‘s Blue Economy Pathways
Annexes
Annex 4: Outline of the Blue
Economy Governance Framework
Based on the findings of the institutional and poli- and enrich the content. The roadmap defines the
cy analyses, an outline of the blue economy gover- objectives to be attained in each governance pillar
nance framework for the BE roadmap is proposed. to foster blue economy development. In addition,
The outline is not exhaustive and can be further the priorities are ranked as high and medium within
elaborated during the development of the BE road- each pillar. The tables also include suggested institu-
map and action plan. Institutional coordination and tions responsible for leading the way toward attain-
feedback from public consultation could validate ment of specific objectives.
Table 4.1. Governance framework – objectives and priorities
Pillar Priority Objective Lead institution Supporting institutions
Governance High Establish the blue econ- MESD Other relevant ministries,
framework omy management struc- counties, cities and mu-
ture at all levels, Prime nicipalities, other rele-
Minister Office on top vant stakeholders
High Create and implement MESD
campaigns for raising
awareness of the blue
economy
High Strengthen the capacities MESD Ministry of Finance
of the institutions and
stakeholders involved
Medium Increase the active and MESD
responsible participation
of the public in the elab-
oration and implemen-
tation of blue economy
strategy
Medium Strengthen and capaci- State MESD
tate control mechanisms inspectorate Ministry of Finance
contents
132 Charting Croatia‘s Blue Economy Pathways
Annexes
Table 4.2. Strategies and policies – objectives and priorities
Pillar Priority Objective Lead institution Supporting institutions
Strategies High Elaborate blue economy MESD Other relevant ministries,
and Policies strategy with clear vision counties, and agglom-
and action plan (includ- erations, other relevant
ing indicators) linking stakeholders
it to the development
priorities of the National
Development Strategy
(NDS) till 2030
High Improve physical plan- Ministry of Counties, cities, and
ning process, implement Construction, municipalities, other
MSP and ICZM tools Spatial relevant stakeholders
Planning and
State Property
High Map the competences MESD Ministry of Labour and
needed to work in blue Pension System, Family
economy sectors and and Social Policy
supporting institutions Ministry of Science and
Education
Medium Harmonize development MESD Other relevant ministries,
strategies/plans (resource, counties and agglom-
sectoral and territorial) erations, other relevant
with the blue economy stakeholders
strategy
Medium Additionally support and MESD Ministry of Science and
facilitate the develop- Education
ment and application of
innovations in the blue
economy
Medium Improve existing educa- Ministry of
tional programs, develop Science and
a scheme of education for Education
new competences within
the lifelong education
system
contents
133
Charting Croatia‘s Blue Economy Pathways
Annexes
Table 4.3. Financial framework – objectives and priorities
Pillar Priority Objective Lead institution Supporting institutions
Financial High Improve investment cli- MESD Ministry of Finance
Framework mate for blue economy
Medium Identify priority projects MESD Ministry of Regional
(project pipeline) for fi- Development and Euro-
nancing development of pean Union Funds
blue economy Other relevant institu-
tions
Medium Clearly determine the MESD
sources and support the
preparation of priority
projects for the use of
existing public sources
Medium Develop new financing Ministry of MESD
mechanisms and ac- Finance
countability principles
within the Republic of
Croatia (for example, blue
bonds)
Medium Enable counties, cities, Ministry of Ministry of Justice and
and municipalities to sup- Finance Administration
port specific blue econ-
omy activities in their
administrative units
Medium Set the foundations for Ministry of MESD
introducing environmen- Finance
tal services valuation into
the national accounting
system
contents
134 Charting Croatia‘s Blue Economy Pathways
Annexes
Table 4.4. Protection of the natural capital value – objectives and priorities
Pillar Priority Objective Lead institution Supporting institutions
Protection High Establish a comprehen- MESD CBS
of the sive monitoring and data Other relevant institu-
Natural management system tions
Capital (data collection and man-
value agement) for the blue
(Marine economy sectors with
and coastal reporting protocols on
ecosystem standard procedure for
services) receiving, managing and
using related data
Medium Improve data bases in MESD Other institutions in
terms of accuracy, being charge for relevant data
open source, and us- bases
er-friendly
Medium Cooperate with R&D sec- MESD Ministry of Science and
tor as to set fundamentals Education
for natural capital valua-
tion and ocean account-
ing within blue economy
monitoring and reporting
Medium Develop and systemati- MESD Ministry of Science and
cally apply various educa- Education
tion/information tools to
increase awareness of the
importance of the envi-
ronment and ecosystem
services at all levels and of
all stakeholders
contents
135
Charting Croatia‘s Blue Economy Pathways
Annexes
Annex 5. List of National Policies
Harmonized with EU
EU legal act National transposition Priority action
1. MSPD 2014/89/EU patial Planning Act (Zakon o prostornom uređenju), OG no.
■ S High
153/13, 65/17, 114/18, 39/19, 98/19
ct amending the Spatial Planning Act (Zakon o izmjenama
■ A
i dopunama Zakona o prostornom uređenju), OG no. 65/17
has ensured transposition of the Marine Spatial Planning
Directive (MSPD)
2. MSFD 2008/56/EU egulation establishing a framework for action by the
■ R Medium
Republic of Croatia for the protection of the marine
environment (Uredba o uspostavi okvira za djelovanje
Republike Hrvatske u zaštiti morskog okoliša), OG no.
136/2011
nvironmental Protection Act (Zakon o zaštiti okoliša), OG
■ E
no. 80/2013, 153/2015, 78/2015, 12/2018, 118/2018
egulation on the provision of information to the general
■ R
public and stakeholders and their participation in
environmental matters (Uredba o informiranju i sudjelovanju
javnosti i zainteresirane javnosti u pitanjima zaštite okoliša),
OG no.64/2008
egulation on the development and implementation
■ R
of documents of the Marine Environment and Coastal
Zone Management Strategy (Uredba o izradi i provedbi
dokumenata Strategije upravljanja morskim okolišem i
obalnim područjem), OG no. 112/2014, 112/2018
3. Bathing Water egulation on sea bathing water quality (Uredba o kakvoći
■ R Low
Quality Directive mora za kupanje), OG no. 73/2008
2006/7/EC nvironmental Protection Act (Zakon o zaštiti okoliša), OG no.
■ E
80/2013, 153/2015, 78/2015, 12/2018, 118/2018
egulation on bathing water quality (Uredba o kakvoći vode
■ R
za kupanje), OG no. 51/2010, 51/2014
ater Act (Zakon o vodama), OG no. 66/2019
■ W
4. Habitats Directive ature Protection Act (Zakon o zaštiti prirode), OG no.
■ N Medium
92/43/EEC 80/13,15/18, 14/19,127/19
egulation on the ecological network and the competences
■ R
of public institutions for the management of ecological
network areas (Uredba o ekološkoj mreži i nadležnostima
javnih ustanova za upravljanje područjima ekološke mreže),
OG no. 80/19, 119/23
rdinance on conservation goals and conservation measures
■ O
of targeted bird species in ecological network sites (Pravilnik
o ciljevima očuvanja i mjerama očuvanja ciljnih vrsta ptica u
područjima ekološke mreže), OG no. 25/20, 38/20
contents
136 Charting Croatia‘s Blue Economy Pathways
Annexes
rdinance on the list of habitat types and habitat map
■ O
(Pravilnik o popisu stanišnih tipova i karti staništa), OG no.
27/21, 101/22
rdinance on conservation goals and conservation measures
■ O
for target species and habitat types in the areas of the
ecological network (Pravilnik o ciljevima očuvanja i mjerama
očuvanja ciljnih vrsta i stanišnih tipova u područjima
ekološke mreže), OG no. 111/22
rdinance on strictly protected species (Pravilnik o strogo
■ O
zaštićenim vrstama), OG no.144/13, 73/16
aw amending the Water Law (Zakon o izmjenama i
■ L
dopunama Zakona o vodama), OG no. 84/21
unting Law (Zakon o lovstvu), OG no. 99/18
■ H
rdinance on the hunting season (Pravilnik o lovostaju), OG
■ O
no. 94/19
ct on the prevention and management of the
A
introduction, spread, and management of alien and
invasive alien species (Zakon o sprječavanju unošenja
i širenja stranih te invazivnih stranih vrsta i upravljanju
njima), OG no. 15/18, 14/19
rdinance on the forest regulation (Pravilnik o uređivanju
■ O
šuma), OG no. 79/15
ecision on harvesting indigenous wild species whose and
■ D
sustainable use is allowed (Odluka o zavičajnim divljim
vrstama čije je uzimanje iz prirode i održivo korištenje
dopušteno), OG no. 17/15, 68/16
-----------------------------------------------
Funding program for the Natura 2000 (Program financiranja
ekološke mreže Natura 2000), OG no. 54/2022
Strategy and action plan for nature protection of the Republic
of Croatia for the period 2017–2025 (Strategija i akcijski plan
zaštite prirode Republike Hrvatske za razdoblje od 2017. do
2025. Godine), OG no. 72/17
5. Birds Directive ature Protection Act (Zakon o zaštiti prirode), OG no.
■ N Medium
2009/147/EC 80/13,15/18, 14/19,127/19
egulation on the ecological network and the competences
■ R
of public institutions for the management of ecological
network areas (Uredba o ekološkoj mreži i nadležnostima
javnih ustanova za upravljanje područjima ekološke mreže),
OG no. 80/19
■ rdinance on conservation goals and conservation measures
O
of targeted bird species in ecological network sites (Pravilnik
o ciljevima očuvanja i mjerama očuvanja ciljnih vrsta ptica u
područjima ekološke mreže), OG no. 25/20, 38/20
■ rdinance on strictly protected species (Pravilnik o strogo
O
zaštićenim vrstama), OG no.144/13, 73/16
■ unting Law (Zakon o lovstvu), OG no. 99/18
H
■ rdinance on the hunting season (Pravilnik o lovostaju), OG
O
no. 94/19
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137
Charting Croatia‘s Blue Economy Pathways
Annexes
ct on the prevention and management of the introduction,
■ A
spread and management of alien and invasive alien species
(Zakon o sprječavanju unošenja i širenja stranih te invazivnih
stranih vrsta i upravljanju njima), OG no. 15/18
rdinance on the forest regulation (Pravilnik o uređivanju
■ O
šuma), OG no. 79/15
rdinance on the certificate of origin of game and parts
■ O
thereof and on the method of marking game (Pravilnik o
certifikatu o podrijetlu divljači i njihovih dijelova te načinu
obilježavanja divljači), OG no. 15/19
ecision on indigenous wild species whose taking from
■ D
nature and sustainable use is allowed (Odluka o zavičajnim
divljim vrstama čije je uzimanje iz prirode i održivo korištenje
dopušteno), OG no. 17/15, 68/16
6. Water Framework ater Act (Zakon o vodama), OG no. 66/19, 84/21
■ W Medium
Directive 2000/60/ egulation on water quality standards (Uredba o standardu
■ R
EC kakvoće voda), OG no. 96/19, 20/23
■ rdinance on the conditions for determining zones of
O
sanitary protection of water sources (Pravilnik o uvjetima za
utvrđivanje zona sanitarne zaštite izvorišta), OG no. 66/11,
47/13
■ ct amending the Water Management Financing Act (Zakon
A
o izmjenama i dopunama Zakona o financiranju vodnog
gospodarstva), OG no. 66/19
■ rdinance on the content of the River Basin Management
O
Plan (Pravilnik o sadržaju plana upravljanja vodnim
područjem), OG no. 74/13, 53/16, 64/18
■ aw on exploration and exploitation of hydrocarbons (Zakon
L
o istraživanju i eksploataciji ugljikovodika), OG no. 52/18
■ ct amending the Maritime Code (Zakon o izmjenama i
A
dopunama Pomorskog zakonika), OG no. 17/19
■ rdinance on wastewater emission limit values (Pravilnik
O
o graničnim vrijednostima emisija otpadnih voda), OG no.
26/20
7. ater Act (Zakon o vodama), OG no. 66/19, 84/21
UWWTD 91/271/EEC ■ W High
egulation on water quality standards (Uredba o standardu
■ R
kakvoće voda), OG no. 96/19, 20/23
rdinance on wastewater emission limit values (Pravilnik
■ O
o graničnim vrijednostima emisija otpadnih voda), OG no.
26/20
ecision on determining sensitive areas (Odluka o
■ D
određivanju osjetljivih područja), OG no. 79/22
8 Waste Framework aste Management Act (Zakon o gospodarenju otpadom),
■ W High
Directive 2008/98/ OG no. 84/21
EC nvironmental Protection Act (Zakon o zaštiti okoliša), OG no.
■ E
80/13, 153/13, 78/15,12/18, 118/18
dministrative Procedure Act (zakon o općem upravnom
■ A
postupku), OG no. 47/09, 110/21
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138 Charting Croatia‘s Blue Economy Pathways
Annexes
riminal Act (Kazneni zakon), OG no. 125/11, 144/12, 56/15, 61/15,
■ C
101/17, 118/18, 126/19, 84/21, 114/22
rdinance on waste management (Pravilnik o gospodarenju
■ O
otpadom), OG no. 106/22
rdinance on by-products and end-of waste status (Pravilnik
■ O
o nusproizvodima i ukidanju statusa otpada), OG no. 117/14
rdinance on thermal treatment of waste (Pravilnik o
■ O
termičkoj obradi otpada), OG no. 75/16
9. SUP (EU) 2012/904 aste Management Act (Zakon o gospodarenju otpadom),
■ W High
OG no. 84/21
10. Port Reception rdinance on the conditions and method of maintaining
■ O High
Facilities Directive order in ports and other parts of Croatia’s internal marine
(EU) 2019/883 waters and territorial sea (Pravilnik o uvjetima i načinu
održavanja reda u lukama i na ostalim dijelovima
unutarnjih morskih voda i teritorijalnog mora Republike
Hrvatske), OG no. 72/21
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139
Charting Croatia‘s Blue Economy Pathways
Annexes
Annex 6. State of the Environment
and Pressures in the Adriatic
Marine Environment – Measuring
Selected GES
The monitoring program of Croatia covers 11 descrip- Only the state of Glavata želva (Caretta caretta) and
tors (D) in accordance with the requirements of the Dobri dupin (Tursiops trunscatus) were reported as
MSFD. ‘Good environmental status’ (GES) is defined ‘favorable’ while the status of Nobel periska (Pin-
through 11 qualitative descriptors, with a set of specif- na nobilits), Prstac (Lithophaga lithophaga), and
ic criteria and methodological standards. The MSFD red coral (Corallium rubrum) were determined as
in conjunction with the WFD provides a framework ‘unfavorable’. The status of 13 other marine species
for the management of marine pollution and is the were reported as ‘unknown’. Half the marine habitat
first EU legal instrument to explicitly address marine types were assessed as ‘unfavorable’ while the oth-
litter. er four were reported as unknown which indicates
that there is an urgent need for improvement in the
monitoring of marine habitats. The status of Posido-
Biodiversity and habitats (D1)
nia habitats, estuaries, reefs, and flooded or partially
The overall adequacy of GES for Descriptor 1 was flooded sea caves is unsatisfactory. The status of the
assessed as ‘good’ by EC (2022) (MoESD 2022) other four types of marine habitats were reported as
although the state of most marine species is re- ‘unknown’ due to insufficient data for assessment of
ferred to as ‘unknown’ due to insufficient data. their conservation status (MoESD 2022).
Pressures on marine species
Marine species Pressures
Common bottlenose dolphin (Tursiops truncatus) rofessional and recreational fishing and shell
■ P
fishing (affects diversity/prey)
isturbances by geotechnical research
■ D
Loggerhead sea turtle (Caretta caretta) eotechnical research
■ G
Loggerhead sea turtle (Caretta caretta) arine transport
■ M
eotechnical research
■ G
ccidental catch (moderate)
■ A
Red coral llegal collection
■ I
arine pollution
■ m
limate change
■ c
The noble pen shell (pinna nobilis) idely affected by a disease spread which start-
■ W
ed in Spain in 2019
Slipper lobster (Scyllarides latus), hatpin urchin oorly monitored
■ P
(Centrostephanus longispinus), and algae ishing (expected impact)
■ F
Lithothamnium corallioides and Phymatholithon abitat degradation (expected impact)
■ H
calcareum
Source: Adjusted from MoESD (2022).
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140 Charting Croatia‘s Blue Economy Pathways
Annexes
Pressures on marine habitats
Habitat type All types Coastal habitats Posidonia
Pressures Use of certain fishing tools, Construction, beach filling, Anchoring
Pollution from mariculture municipal waste,
Land-based pollution various tourist and recreational
Marine pollution activities
Marine waste
Nutrient intake
Alien species
Climate change
Source: Adjusted from MoESD (2022).
Non-indigenous species (D2)
Eutrophication (D5)
Four new non-indigenous species were identi-
fied in addition to the eighteen previously iden- Eutrophication is linked to anthropogenic pol-
tified.179 The new non-indigenous species were re- lution from municipal wastewater and agricul-
ported in areas with extremely dense settlements, tural runoffs. The analysis of ecological status of
and with probably a significant impact on native Croatia’s transitional, coastal, and marine waters
species.180 Introduction of foreign species is an is- according to the trophic TRIX index182 indicates a
sue of a cross-border nature. The national preven- satisfactory state. However, the status at Šibenik bay,
tion measures need coordination among all the Bakar bay (Rijeka), and Vranjic (Split) were unsatis-
countries of the Adriatic subregion. (MoESD 2022) factory and there is a need for systematic monitoring
and stricter implementation of the Convention on of such locations (MoESD 2022, 190) and measures to
Management of Ships’ Ballast Water181 (Internation- reduce inflow of organic P and N.
al Maritime Organization 2004).
Sea floor integrity (D6)
Population of commercial fish species is
For proper assessment of GES descriptor D6 needs
healthy (D3)
additional monitoring and coordination among var-
According to the GFCM199 assessment in 2019, ious institutions (Republic of Croatia 2019, 123). The
commercial fish stocks are overfished (MoESD stressors affecting the status of marine seabed are
2022). However, fish resources in the Croatian terri- presented below:
torial waters are in a better condition compared to
the rest of the Adriatic Sea (Republic of Croatia 2019).
Also, it seems that the protection of Jabuka pit had a
positive impact on increasing of demersal fish stock.
__________________________
179 I OR (http://baltazar.izor.hr/azopub/bindex).
180 I OR (http://baltazar.izor.hr/azopub/bindex).
ttps://www.imo.org/en/About/Conventions/Pages/International-Convention-for-the-Control-and-Management-of-Ships%27-Ballast-Wa -
181 h
ter-and-Sediments-%28BWM%29.aspx.
182 T he trophic index (TRIX) is a eutrophication index proposed by Vollenweider et al. (1998) to assess the trophic state of marine waters, characterized
by high nutrient levels and phytoplankton biomass. First used along the Emilia-Romagna coastal region (northwestern Adriatic Sea), later the
index has been applied in many European seas (Adriatic, Tyrrhenian, Baltic, Black Sea, and North Sea).
contents
141
Charting Croatia‘s Blue Economy Pathways
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Pressures on marine seabed
Marine seabed Coastal waters Open sea
Pressures Construction of coastal infrastructure and Fishing with bottom trawls and
sand extraction dredges
Aquaculture Permanent anchoring of different
River inflows objects, Extraction and disposal
Pollution sources (for example, wastewater). of the materials, Installation of
Dredging and beach filling offshore exploitation objects.
Hydrological changes (D7) can occur during Marine noise (D11)
infrastructural projects and due to climate change The main source of anthropogenic low- and me-
impacts. dium-frequency noise is shipping. There is large
seasonal variability of anthropogenic underwater
Concentrations of contaminants (D8) noise due to seasonal increase of vessels during
the tourist season (MoESD 2022, 174). Although
GES was assessed in 23 out of 26 water bodies in
systematic noise monitoring started in 2017, yet it
2017, which is in 88 percent water bodies (Repub-
was not possible to determine the environmental
lic of Croatia 2019). Increased values of Tributyltin
status of the Adriatic Sea for this descriptor.
(TBT) were found at Bakarski zaljev, Luka Pula, and
Luka Split which are linked to the intensive mari-
time transport. Namely, the use of TBT in antifouling
paints is prohibited by the law. Such finding indi-
cates the need for stricter enforcement and regular
inspection services (Republic of Croatia 2019, 174).
Marine waste (D10)
Croatia’s monitoring systems cover waste
washed up on the coast, large floating waste on
the surface and bottom of the sea, microplastics
and marine waste swallowed by marine organ-
isms. However, due to insufficient financial resourc-
es during 2017 and 2018, sampling and subsequent
analyzes were performed on smaller scale than the
regulatory provisions. Also, the system of threshold
values has not been sufficiently developed at the
EU level.
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142 Charting Croatia‘s Blue Economy Pathways
Annexes
Annex 7: SWOT Analysis
of Established Maritime Sectors
The driving forces for the established maritime institutional incapacity for tourism product de-
sector have been identified using the four di- velopment and innovations in service provision.
mensions of SWOT analysis. Several issues that Threats are posed by external environmental issues,
may hamper the development potential of mari- climate vulnerability, and lack of infrastructure. The
time sectors if not properly addressed were deter- results of the SWOT analysis could assist in sector
mined and considered as disadvantageous. The planning, coordination, monitoring, and promotion
weaknesses of the internal environment concern of new activities.
I. Swot Analysis of the Croatian Coastal Tourism
Strengths Weaknesses
resence of favorable climate, human capital, at-
■ P ■
High concentration of tourism in Adriatic Croatia
tractive natural environment and protected land leading to imbalance with other regions
and sea ■
Seasonality of tourism and consequent pressures on
■
Proximity to EU (source) markets the built infrastructures and natural environment
■
Rich and diversified natural and cultural (tangible ■
Insufficient human resources (number and quality)
and intangible) tourist resources for tourism activities
■
Attractiveness of coastal area based on rich histo- ■
Lack of wastewater treatment infrastructure
ry and heritage (UNESCO heritage sites) and local ■
Lack of accommodation for high-value tourists
tradition of tourism ■
Unfavorable business and investment environment
■
High level of safety which meets tourists’ security for quick adaptation of the sector to technological
concerns advancement in tourism
■
Stakeholders’ awareness of responsible and sus- ■
Highly centralized and insufficient communication
tainable business between central, regional, and local authorities
■
Sufficient private stakeholders’ receptiveness to ■
Insufficient cooperation between public, private, and
accelerate technological change and meet tour- civil society stakeholders
ist demand. ■
Insufficient networking of tourism entities with other
economic activities (for example, connecting tourism
and agriculture and other economic activities) con-
sequently leading to underdeveloped value chains
■
Underused potential of rural areas for special forms
of tourism
■
Low awareness of responsible and sustainable busi-
ness practices
■
Unsustainable growth of nautical tourism
■
Environmental and social pressures due to cruise
tourism.
Opportunities Threats
U funding opportunities available through the
■ E ack of comprehensive consideration of nautical/
■ L
National Plan for Recovery and Resilience (NPRR) cruise tourism in the Croatian Sustainable Tourism
and Marine and Fisheries Fund Development Strategy
■
Favorable investment environment due to the ■
High level of complexity and volatility of global mar-
introduction of euro and accession to Schengen kets
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143
Charting Croatia‘s Blue Economy Pathways
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■
Public-private partnership in the implementation revailing perception of Croatia as a summer tourist
■ P
of tourism projects and product development destination
■
Growing tourist interest in sustainable and eco- ■
ncreasing global competition in the development of
tourism destinations tourist products and special forms of tourism in com-
■
Recognition of the viability of local products and peting countries
handicrafts ■
Negative trend of guest loyalty
■
Stronger integration in international/regional ■
Rapid changes in trends in the global tourism mar-
networks and associations ket, tourism value chains underdeveloped.
■
New developments solutions for increasing the ■
nterrelationship between tourism and climate
sustainability of tourism business within the BE change together with the negative impacts of tour-
framework. ism on the environment and nature
■
Land-use development leading to increasing pres-
sures on real estate market and depopulation of
main tourism destinations (‘ghost areas’)
■
Further expansion of tourism activities in the coastal
zone can increase the infrastructure needs and af-
fect natural resource (for example, water availability).
Ii. Swot Analysis of the Fisheries
Strengths Weaknesses
ommunity traditions in fishing and dependency of
■ C ■
High cTotal) fishing capacity (of all countries ex-
small local communities for their lifestyle ploiting stocks in Adriatic) exceeds demersal fish
■
Large number of commercial species (multispecies stocks
and multi-gear fishery) ■
Main pelagic varieties (sardine and anchovy) are
■
Alignment with relevant EU policies overfished
■
Management plans (catches, fleet, species) in place ■
Imbalances in main fleet segments
■
Jabuka-Pomo pit FRA experience as a good practice ■
Low economic sustainability (insufficient equip-
■
Data collection and monitoring systems established ment, safety on sea, working conditions, food
■
VMS and ERS systems implemented in fleet seg- quality, energy efficiency)
ments under the management plans ■
SSCF – insufficient revenues versus large social
■
Existing FLAGs, fishery cooperatives, producers’ or- dependence of fishery
ganizations ■
Insufficient infrastructure (fishing ports, ware-
■
Cooperation among stakeholders houses, landing and management sites, and so
■
Active participation in EU and other relevant interna- on) and weak market provisions
tional organizations ■
Shortcomings in data collection
■
SSCF can fish 12 months a year ■
Insufficient and low capacity for control.
■
SSCF catches of high value, shortest way to market
with prices affordable for fishermen and local com-
munity.
Opportunities Threats
■ Adjustment of fishing capacity and efforts based acko Impacts of climate change affecting ma-
■ L
on cooperation of all stakeholders and holistic, bot- rine ecosystem including introduction of foreign
tom-up approach species
■
Implementation of new technological solutions for ■
Decrease in marine services due to pollution
decrease of operational costs from economic activities and urbanization
■
Development and application of new techniques ■
Demographic trends and low interest for fishery
and tools for exploitation of foreign species as well as jobs among young population
decreasing by-catches and discards ■
Loss in traditions and traditional skills
■
New market niches and income generation in syner- ■
Transborder pollution
gy with tourism ■
Global trends and rise in operational costs.
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144 Charting Croatia‘s Blue Economy Pathways
Annexes
se of IT solutions for improvement of data collec-
■ U U fisheries management measures could ham-
■ E
tion, monitoring and control per economic and social sustainability of small
■
Availability of EU funds and other external sources fisheries.
■
Development of farmed seafood, including the pro-
duction of seafood with a low carbon footprint and
algae cultivation.
Iii. Swot Analysis of the Fish Processing
Strengths Weaknesses
■ ong tradition in fish processing
L ■ ow number of value-added products.
L
■
Availability of raw materials for processing industry ■
Poor implementation of innovations
■
Established domestic market for fresh fish and shells ■
Lack of cooling and warehousing facilities
■
Established sales markets in the EU ■
Lack of infrastructure necessary for efficient mar-
■
Established tuna market in Japan ket operations (auction and distribution centers)
■
Increase in consumption trends of demersal farmed ■
Insufficient number of producers organizations
species ■
Lack of branding, marketing, and promotion
■
Established standards in operations related to pro- strategies
cessing and marketing of fish and seafood products. ■
Relatively low domestic consumption per capita.
Opportunities Threats
odernization of fish processing industry, including
■ M ncrease of operational costs (raw materials and
■ I
energy efficient solutions energy in particular)
■
Development of cold chains and processing of mari- ■
Prices at global market (cheap imports; compet-
culture products itors lower’ market prices due to lower produc-
■
Diversification and new products (for example, po- tion costs)
tential for sales of fresh shells through domestic ■
Poor purchasing power at domestic market
market chains; prepared products and meals based ■
High prices of fish and seafood products on do-
on shellfish with longer shelf life; new niches for su- mestic market compared to other food products.
preme quality of farmed tuna; potential for increased ■
Market volatility and distortions leading to con-
sales of demersal farmed fish on domestic market straints in sales (for example, pandemic out-
and tourist consumption) break, war in Ukraine).
■
Use of new marketing techniques (direct, online
sales)
■
Potential for sales increase via tourism and hospital-
ity industry.
IV. Swot Analysis of the Ports and Port Activities
Strengths Weaknesses
eographical position and geomorphologic charac-
■ G ■
Insufficient capacities of ports of county and lo-
teristics of the coast cal importance
■
Existing legislative framework for running of the ■
Inconsistency of guidelines and criteria for deter-
ports open to public traffic and ports for special pur- mining the justification, priorities, and approval
poses of infrastructure and other development proj-
■
Present liner transport in ports open for public trans- ects in the maritime sector
port ■
Legal and technical challenges for digitalization
■
Demand and supply of port services locally are ex- (especially in smaller ports) of port services
pected to increase. ■
Location of port terminals in the central part of
the cities, which creates issues from environ-
mental and urban planning perspective
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nsufficient seaports for servicing passengers
■ I
and fishing activities.
Opportunities Threats
pportunity for securing funding for port infrastruc-
■ O ossible failure to take advantage of new digital
■ P
ture developments under NPRR 2021–2026, and oth- technologies for the efficient operation of sea-
er EU programs, for example, the EU Connecting Eu- ports as their implementation can reduce costs,
rope Facility program simplify business processes, and improve trans-
■
Implementing innovative solutions for the develop- parency
ment of smart ports ■
Discrepancies in the development of road and
■
Development and application of technologies that maritime infrastructure, as well as development
contribute to reducing environmental and infra- of comprehensive connections to TEN-T net-
structure impacts. works in all ports of country interest.
V. Swot Analysis of the Aquacuture
Strengths Weaknesses
Demersal species Demersal species
■
Large firms lead in innovations, production and pro- ■
High import dependence (food for farming as
cessing technologies, as well as strategic marketing well as import of milt)
■
Young people interested to enter the industry ■
Insufficient specialization of production technol-
■
Good geographical position (in terms of marine envi- ogies (lack of gene selection and use of Recircu-
ronment and proximity of the EU market) lating Aquaculture Systems)
■
State of marine environment is still rather good ■
Small producers suffer high operational costs
■
Introduction of new species (meagre) in farming. and cannot afford huge investments.
Tuna farming ■
Small producers do not use modern technolo-
■
Excellent rating at global market gies.
■
High-quality products ■
Lack of cooperation with R&D sector, state agen-
■
Availability of highly skilled labor cies and other producers
■
Implementation of modern farming technologies ■
Weak participation in professional organizations
■
Availability of food from imports at all levels (from regional to international).
■
Good organization of producers Tuna farming
■
Good cooperation with R&D sector ■
High dependence on tuna quota
■
Active participation in in professional organizations ■
Entire business model depends solely on one
at all levels (from regional to international) market (Japan)
■
Good cooperation with local communities. ■
Drop in prices at sales market due to rise in quo-
Shell farming tas.
■
Croatia is one of the few last resorts of autochtho- Shell farming
nous European oyster that could achieve high prices ■
Prevailing small (family) producers
in the European market (adequate marketing pro- ■
Obsolete technologies used; low interest for in-
vided) novations
■
Existing demand at domestic market ■
No commercial spawning facilities
■
Good cooperation with local communities. ■
Lack of purification centers
■
Lack of processing facilities
■
Only fresh products sold; no diversification and/
or value added
■
Weak organization of producers
■
Lack of cooperation with R&D sector
■
Absence of participation in professional organiza-
tions at all levels (from regional to international).
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146 Charting Croatia‘s Blue Economy Pathways
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Opportunities Threats
Demersal species Demersal species
■
Potential for mariculture is still high since the ■
Warming up of the Adriatic Sea hampers pro-
catches of wild seabass and seabream are not that duction of some species (for example, seabass)
significant. ■
Occurrence of various diseases
■
Existing market niches, for example, eco products ■
Invasive species and inadequate emergency
in Croatia and abroad (seabass and seabream) services
■
Very good prospects for meagre farming and sales ■
Foreign producers penetrating the markets of
of meagre-based products (prepared dishes) high-quality demersal mariculture products as
■
Production and marketing of new species (for ex- well as eco products niches with more afford-
ample, common dentex, greater amberjack) able prices.
■
Growth of fish processing industry, upward trends ■
Market volatility
in consumption of fish fillets, ready-to-cook-fish as ■
Accidents and fish losses because of the weath-
well as other value-added products er conditions (storms, and so on).
■
Market potential in tourism has not yet been fully Tuna farming
use ■
Sudden appearance of diseases
■
Growing demand at domestic market ■
Accidents, damages, and fish losses because of
■
Small producers can set up producer organizations. the weather conditions (storms, and so on)
Tuna farming ■
If quotas were introduced on domestic food
■
Potential new markets (market niches) in Croatia (sardine), the costs would rise, with possible in-
and abroad for the supreme-quality products (well- sufficient availability from imports.
off clients, hotels, and restaurants) Shell farming
■
New markets for new products. ■
Sea temperature raise due to climate changes
Shell farming ■
Risk of closure due to pollution (wastewaters,
■
Possibilities to raise production and product quality agriculture, industry)
■
Use of best available technologies ■
Projects in coastal area in conflict with shell
■
Creation of new value-added products for sales at farming
domestic and foreign markets (including prepared ■
Occurrence of foreign species (e.g. Pacific oys-
meals and dishes with longer shelf life) ter) especially in Istria
■
Sales of fresh products from shells could be in- ■
Insufficient and inadequate technologies for
creased through retail network combating predators
■
New market niches for products with eco-labels ■
Insufficient cross-border cooperation related to
and high value added the control of both production of new species
■
Production of new species based on new spawning and occurrence of invasive species.
technologies (for example, Escallops).
VI. Swot Analysis of Shipbuilding and Ship Repair
Strengths Weaknesses
vailable shipyard/ship repair infrastructure
■ A ecline of country shipbuilding in the last 20
■ D
■
Developed education curricula (that is, specialized years
university-level education programs) ■
High costs of production and of restructuring for
■
Existing companies that have vast experience in the optimizing the supply chain
design, construction, and repair of merchant ships, ■
Technological challenges in existing shipbuild-
warships, multipurpose and specialized vessels, sail- ing infrastructure.
ing ships, and so on.
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Charting Croatia‘s Blue Economy Pathways
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Opportunities Threats
uilding production and human resources capaci-
■ B all of international demand for vessels
■ F
ties in designing innovative solutions for production ■
Governmental financial support provided to save
of clean propulsion and/or autonomous vessels and preserve the national shipyards in many in-
■
Growing experience and competitiveness in the ternational competitors (such as South Korea,
manufacture of vessels’ parts of other Croatian sec- Japan, and China), contrary to the EU Competi-
tors tion Law.
■
Forming of regional value chains between shipbuild-
ing and other industries.
contents