95 MARTINDALE CENTER FOR THE STUDY OF PRIVATE ENTERPRISE herence and potential national penalties (Accelerate…, 2024; Jensen & Meinardi, 2025). Croatia’s energy transition planning is further complicated by its pursuit of small modular reactors (SMRs) as a future low-carbon source. In February 2025, the government established a working group to draft nuclear energy legislation and evaluate SMR construction, with reactors estimated to be operational no earlier than 2035, five years beyond the EU 2030 targets (Jensen & Meinardi, 2025). This lag renders SMRs analytically irrelevant to 2030 compliance, yet they occupy significant political attention in Croatia’s energy policy discourse (Gulan & Kelava, 2025; Ministry of Economy…, 2025). The risk of overinvestment in LNG is path dependency, whereby Croatia loses its future energy hub status because developing renewables is unfeasible. The 99-year concession granted to LNG Hrvatska exemplifies this lock-in. Extending to 2117, 67 years beyond the EU 2050 carbon neutrality deadline (Re:Common, 2019), creates multiple path dependency mechanisms: sunk cost pressures to maximize utilization; revenue addiction from export profits; infrastructure complementarity committing neighboring countries; and political economy interests of LNG Hrvatska, HEP, and Plinacro. If Croatia develops LNG path dependency for itself and its neighbors, it may also preclude current allies from green development milestones, which EU member applications now require. How Croatia can proceed Economically, Croatian energy exportation is very profitable, and the goal of becoming a regional hub will likely be achieved (Karasalihović Sedlar et al., 2023). Yet Croatia risks losing that status as other nations without sunk costs can pivot more easily to renewables. Croatia needs to accelerate policy alignment and start thinking about the future. In the scenario where Croatia procrastinates but still complies with EU 2050 guidelines, losing energy hub status in the long run may cost more than investing in renewables now. Stranded assets and the ammonia pathway LNG terminals with projected lifetimes into the 2040s risk becoming stranded assets as the EU pursues carbon neutrality by 2050; LNG terminal operations developing in Germany are already designing terminals to accommodate future renewable fuels (Riemer et al., 2022). A prospective solution for Croatia is converting the Krk terminal to climate-neutral energy carriers like liquid ammonia, generally considered more technically and economically feasible than hydrogen conversion. The storage tank, the most expensive component, can be reused with modifications, and the existing thermal design is sufficient, making the economic impact considerably smaller than hydrogen conversion (Riemer et al., 2022). Ammonia is carbon-free and already mass produced for fertilizers with over 80 import ports worldwide. Despite lower volumetric energy density than LNG, ammonia has higher energy density than liquid hydrogen. Ammonia is already produced industrially at scales comparable to LNG infrastructure, and existing ammonia shipping fleets, port standards, and safety codes reduce deployment risk (Reimer et al., 2022). Critically, unlike most European FSRUs, which are chartered, Croatia’s outright ownership of its FSRU eliminates the long-term uncertainty that comes with charter arrangements; owned vessels can be expanded or renovated as needed rather than returned at the end of a contract, providing competitive flexibility for long-term conversion and a comparative advantage in maintaining energy hub status, recently demonstrated in the 2025 capacity expansion. Ammonia burns extremely hot and is suitable only for high-energy industrial applications; its yield is significantly smaller than that of LNG. Nevertheless, Croatia’s domestic dependence on LNG has not increased significantly in the past decade. If coal and oil are phased out simultaneously with development of various renewable sources, ammonia can contribute to the national energy portfolio and mitigate stranded asset risk in the event of an EU green-energy ultimatum. If Croatia continues trends in electricity generation, reduces gas usage, and replaces coal, and if industrial processes are substituted with ammonia or hydrogen, then gas composition in the current portfolio could optimistically decrease by 30%–40%, increasing export revenues. Ammonia is also commonly used as a hydrogen carrier because it is more stable. Hydrogen is a strong but less studied option. Even if ammonia is not the carrier, terminal renovations are similar to those for ammonia. Several energy policy documents have been published for European adoption of both ammonia and hydrogen because of this similarity, notably the hydrogen spine concept, where Croatia and the Visegrád Group (Czechia, Slovakia, Poland, and Hungary) become leading energy exporters due to their geographic centrality. The North Adriatic Hydrogen Valley project with Slovenia and Italy, featuring 17 pilot projects targeting production of more than 5000 tonnes of renewable hydrogen annually (Gulan & Kelava, 2025), has al-
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