Is Romania getting cold feet on EU Green Deal?

The European Green Deal has been perceived as an obligation imposed by the EU on Romania, with the prime minister arguing that in Brussels the Green Deal is "a true religion".

But these sentiments are at odds with the fact that Romania was not among the dissenters opposing the 2050 climate-neutrality targets, nor did it object to the ratification of the Paris Agreement.

While Romanian statesmen repeatedly agree with the need for climate action, when the time comes to implement concrete measures, their vision is limited to the winds of public opinion – so they present the high targets as something imposed by the EU.

Policy makers are also betting on natural gas and nuclear energy as suitable fuel for the country's energy transition.

Relying on gas as a transitional fuel is wrong for many reasons, including its low return on investment and negative environmental impact.

In addition, the most recent version of the country's national energy and climate plan (NECP) includes 1.98 GW of installed coal capacity until 2030 (approx. 7.9 percent of the total energy mix).

This goes against the path adopted by a majority of EU member states to phase-out coal from their energy systems.

While other countries with much higher coal capacities have planned a phase-out by 2030, 2028, or even 2023, only Romania and six other EU countries do not yet have a plan in this regard.

Gas is not the solution

Developing more gas capacity is uneconomical for Romania, as external financial resources will be very soon limited.

With the EU's strategic goal to become carbon neutral by 2050, Romania would have to plan a second transition in 20 years, from natural gas to renewables: an extra, unnecessary step.

Starting in 2022, the European Investment Bank will no longer finance projects based on fossil fuels, including natural gas, while the regulatory proposals for the future European Regional Development Fund (ERDF) and the Cohesion Fund are set to exclude fossil fuels from receiving any financing.

Even though CO2 emissions are lower than those of coal, the threat of methane emission from gas capacities, a greenhouse gas with 23 times higher impact than carbon dioxide, must be accounted for.

In so doing, together with the high cost of production and initial investment for gas power plants, Romania should spend its money on energy-efficiency measures and in modernising the energy system for a better integration of renewable energy sources, a much cheaper and efficient transformation.

Policy makers need to plan coherently with climate-neutrality targets and translate EU regulations into effective policies. Until now, no clear action and legislation has been approved for decarbonisation.

Romania has numerous financing opportunities to benefit from, as long as the country commits energy and climate targets.

A recent report by Sandbag and CEE Bankwatch Network shows the huge potential and opportunities for a successful energy transition in Romania.

According to the last estimates in the NECP, the country needs €22.6bn in investments for the transformation of the energy system.

While this amount might seem unreachable, the next EU budget provisions at least 25 percent of the spending envelope for climate actions. In short, Romania could mobilise:

• Under Cohesion Policy at least €5.5bn, of which €3.1bn are allocated to the energy sector

• €757m under the Just Transition Fund, as Romania is third-highest recipient for the fund

• €10.11bn under the Just Transition Mechanism

• €18bn from EU–ETS, if Romania will begin auctioning revenues and repurpose them for energy transition

Other instruments such as the Connecting Europe Facility, InvestEU or LIFE+ programme could also be used to support Romania's clean energy transition.

Romania should use these sources to implement more effective projects and measures that will help the country achieve its climate and energy targets set for 2030 and 2050.

Until now, under the current financing period (2014-2020) Romania has an EU funds absorption rate of only 31 percent, and Cohesion Policy was not used to its full potential: only 7.8 percent of investments went into actual clean energy projects instead of the planned 20 percent.

Given that Romania already has a diverse energy mix with almost 50 percent renewables, the largest onshore wind farm in Europe and the technical potential of 86 GW from renewable energy - solar and wind, Romania's policy makers should see the Green Deal as an enabler of economic development, not as a setback.