2024

The renovation of the building stock is one of the key target sectors for energy and CO2 reduction at the EU level. Despite policy efforts, the wide range of regulatory measures, financial instruments, and initiatives that have resulted in notable technical improvements to the building stock, the energy consumption, in both public and residential sectors, has not yet experienced the dramatic reduction necessary to achieve set targets. One of the cornerstone policies aimed at reducing the energy consumption of the building stock, the Energy Performance of Buildings Directive (EPBD), introduced the requirement for Member States to establish certification (energy performance certificates) and energy labeling schemes for existing buildings to indicate their energy performance, as well as a common framework for the calculation of buildings' energy performance. In Romania, the Long Term Renovation Strategy is the main document aiming to transform the national building stock to meet energy efficiency standards by outlining specific actions and targets for both public and residential buildings. It introduces the cost-optimal renovation packages to ensure economical viability of energy efficiency renovation measures, for all types of public buildings, educational, healthcare, administrative, commercial buildings, all of which would be able to achieve deep renovation standards. The performance of the building stock in Romania has been steadily, albeit slowly, improving, and some progress has been made in achieving renovation targets. However, there are significant challenges for the Romanian renovation sector to achieve the energy savings potential. Although the Romanian policy landscape and legal frameworks have established specific standards and measures for energy performance in the renovation sector, achieving these standards has encountered various barriers, related to national energy performance calculation methodologies, knowledge gaps about the national building stock, monitoring and evaluation practices, and certification processes, poor management and use of buildings post renovation. To overcome these barriers and accelerate the rate and quality of the energy efficiency renovations, it is essential to improve the national building stock knowledge base, establish robust monitoring and evaluation frameworks to ensure that energy performance targets are met and that the actual energy savings align with predicted outcomes, enhance the administrative capacity at both national and local levels. Finally, increasing awareness and knowledge about energy efficiency among building occupants will help mitigate issues related to occupant behavior that impact energy consumption. OUR-CEE (Overcoming Underperforming Renovations in Central and Eastern Europe) is part of the European Climate Initiative (EUKI) of the German Federal Ministry for Economic Affairs and Climate Action (BMWK). The opinions put forward in this study are the sole responsibility of the author(s) and do not necessarily reflect the views of the Federal Ministry for Economic Affairs and Climate Action (BMWK). Luciana Miu, EPG Head of Clean Economy Luciana Miu is the Head of Clean Economy at Energy Policy Group. She holds a Master’s degree in Sustainable Energy Systems from the University of Edinburgh and a PhD in Energy Efficiency of Residential Buildings from the Imperial College London. Before joining EPG, Luciana worked for the UK Parliament and for the British Government’s Department of Business, Energy and Industrial Strategy (BEIS), as well as a consultant for Climate-KIC and London City Hall. Contact: luciana.miu@enpg.ro

Pe fondul unor temperaturi caniculare extreme, sistemul energetic național a întâmpinat dificultăți în satisfacerea cererii de consum la orele de vârf în ultimele săptămâni. Contrar unor opinii vehiculate în spațiul public, această situație critică nu a fost cauzată de adoptarea unui calendar de eliminare a capacităților pe bază de cărbune. De fapt, centralele pe bază de combustibili fosili au produs semnificativ sub capacitățile instalate teoretic disponibile în sistem, necesarul fiind acoperit prin creșterea importurilor. Pentru evitarea unor situații similare în viitor, este necesară accelerarea investițiilor în rețelele de distribuție și transport, creșterea capacităților de producție de energie cât mai curată, și a sistemelor de stocare, precum și dezvoltarea suplimentară a capacităților de interconectare cu alte state. Alexandru Ciocan, EPG Researcher, Energy Systems Team Alexandru Ciocan este cercetător la Energy Policy Group și a lucrat intens timp de aproape 10 ani în domeniul tehnologiilor bazate pe hidrogen, surse de energie regenerabilă și baterii litiu-ion. Deține un doctorat în științe inginerești de la IMT Atlantique, precum și de la Universitatea Politehnica din București. Contact: alexandru.ciocan@enpg.ro

Romania's climate policy is strongly influenced by the European Union's objectives to reduce emissions and achieve climate neutrality. By adopting the National Long-Term Strategy (LTS), Romania has committed to achieve a net emission reduction of 99% in 2050 compared to 1990 levels. This study assesses the most recent draft version of the National Energy and Climate Plan (NECP) by addressing three key questions: 1) How adequate are the proposed measures to achieve the emission reduction targets? 2) How robust is the evidence base for the proposed measures? 3) To what extent have stakeholders been involved in the development of the plan The assessment is based on four groups of key performance indicators (KPIs):  data, modelling and science; stakeholder engagement; the five dimensions of the NECP; and equitable transition and socio-economic impact. Following the assessment, it can be concluded that the draft version is limited by a lack of holistic perspective, transparency and references to scientific literature. It does not incorporate enhanced climate objectives under the Effort Sharing Regulation (ESR) and the Land Use, Land Use Change and Forestry Regulation (LULUCF). The differentiation of emissions under the Emissions Trading Scheme (ETS) and ESR is missing, as well as detailed implementation plans. Sector specific measures, the use of renewable energy in industry and buildings and decarbonisation measures for the transport sector are also not sufficiently detailed. The draft does not fully comply with the requirements of the revised Energy Efficiency Directive (EED) or specify the Renewable Energy Directive (RED III) target on renewable fuels. It shows a lack of ambition in terms of long-term renovation strategies and overall emission reductions, with no explicit plans to reduce gas consumption or improve energy storage. In addition, the document does not contain concrete measures to support research and innovation in renewable energy technology and adaptation to climate change. There is no mention of addressing impacts on social groups, health, education or regional development. To increase the effectiveness and impact of the NECP, the following recommendations should be considered: (1) Increase the level of ambition of key targets such as solar and wind capacity development, grid-scale storage solutions, smart grid and CCS technologies; (2) Mandate the use of heat pumps in renovated buildings and extend renovation rates by 2% annually; (3) Upgrade airport infrastructure, create green shipping corridors, implement low emission zones, align industrial strategy with climate targets; (4) Creating the incentive framework for afforestation and reforestation, sustainable aviation fuels, allocating funds for research and development, promoting public-private partnership and developing a medium term investment strategy; (5) Clarifying institutional responsibilities and ensuring effective and transparent governance, involving stakeholders and empowering consumers; (6) Analyse the socio-economic impacts and extend just transition measures to all affected sectors by creating green jobs programs, supporting affected workers and addressing energy poverty; (7) Conduct a climate vulnerability analysis with performance indicators to monitor implementation progress. Ioana Vasiliu, EPG Senior Researcher Ioana works as a Senior Researcher within the Clean Economy Programme of EPG. She holds a bachelor degree in management for public administration and a post university diploma as expert for sustainable development both from the Economic Academy of Bucharest. Before joining EPG, Ioana worked for Romanian Ministry of Environment, Waters and Forests as european affairs advisor within Climate Strategies and Reporting Department. Over the last years, she has been involved in addressing climate change at national level, by developing policies and strategies for reducing greenhouse gas emissions and adapting to the effects and impacts of climate change. At international level she acted as rapporteur for climate change adaptation policies and NECP, is member of UNFCCC expert roster and coordinated Romania’s accession process to the OECD, in the field of climate change. Contact: ioana.vasiliu@enpg.ro

Independent scientific advisory bodies are consultative organisations composed of various experts with the role of advising governments on climate policy and monitoring progress towards reaching climate targets. Their overarching role includes identifying the shortcomings in climate policy and offering scientific advice to improve it. Climate policy would thus be enhanced by linking the latest scientific evidence to policymaking and filling the gap left by the lack of institutional capacity and in-house expertise of the government. Through this influx of expertise, Romania could also gain more ownership over its climate policies, by enabling domestic debate and initiative, rather than merely transposing EU legislation. Ana-Maria Niculicea, EPG Researcher, Clean Economy Team Ana-Maria Niculicea is a Researcher at Energy Policy Group focusing on aspects relating to climate governance and the social acceptance of the transition. She holds a MSc in Politics, Economics and Philosophy from University of Hamburg and a bachelor’s degree in Political Science from National University of Political Studies and Public Administration.  Contact: ana.niculicea@enpg.ro

The revised Energy Performance of Buildings Directive (EPBD) brings new provisions on accounting and managing whole-lifecycle carbon dioxide emissions in buildings. This approach, which implies addressing emissions along a building’s entire value chain (fromthe production of construction materials to demolition and post-demolition phases) can help increase coordination and grow low-carbon construction industries and had already been applied in several EU Member States before the revision of the EPBD. For countries yet institutionally unfamiliar with the concept of whole-life carbon (WLC), such as Romania, implementing the EPBD provisions on lifecycle emissions will imply a major regulatory overhaul. In Romania, the major barrier to implementation of a WLC approach to buildings is the diversity and siloed application of existing legislation. Responsibilities are fragmented between multiple competent authorities, with insufficient coordination, as well as a lack of appropriate updating of policies. Existing or new policies could serve as umbrella frameworks, increasing coherence between the regulations, standards and specifications governing the materials production, construction, refurbishment, and demolition phases of buildings. Specific points of entry could be national construction laws, public procurement frameworks, or the transpositions of EU directives on sustainable materials, such as the Ecodesign for Sustainable Products Regulation. To implement WLC and launch a low-emissions construction industry, Romania must overcome other barriers, including the high cost of producing low-carbon construction products, a lack of accessible funding and market creation instruments, low institutional capacity for implementation and cultural barriers including resistance to change driven by a lack of clarity in the benefits associated with green buildings. If these barriers are addressed, Romania’s construction sector, already an important employer and economic contributor, can create additional value by entering the green construction market, which is growing across the EU. Overcoming these barriers will also ensure compliance with the revised EPBD and aligning Romania’s construction legislation with the EU-wide transition to a low-carbon economy. Luciana Miu, EPG Head of Clean Economy Luciana Miu is the Head of Clean Economy at Energy Policy Group. She holds a Master’s degree in Sustainable Energy Systems from the University of Edinburgh and a PhD in Energy Efficiency of Residential Buildings from the Imperial College London. Before joining EPG, Luciana worked for the UK Parliament and for the British Government’s Department of Business, Energy and Industrial Strategy (BEIS), as well as a consultant for Climate-KIC and London City Hall. She is passionate about volunteer work, being one of the founding members of European Youth Energy Network and a professional speaker for conferences dedicated to the role of youth in energy transition. Contact: luciana.miu@enpg.ro

To reach climate neutrality by 2050, the European Union has set a 55% emission reduction target for 2030 and the European Commission has proposed a 90% reduction target for greenhouse gas emissions by 2040. Romania, through its multiple strategies and plans, has set out a vision for gradually decreasing its emissions. While these documents reflect significant strides forward for the energy transition, especially by committing to a coal phaseout calendar by 2032, they are fraught with inconsistencies and partly rely on sizeable investments in fossil capacities. Various projects on nuclear and hydro energy are also constantly announced with limited assessment of their suitability in an increasingly decarbonised power sector. In this report, we assess Romania’s energy transition pathway. The European Gas Market Model and the European Power Market Model developed by REKK were utilised to understand the impact of Romania’s plans on emissions and the energy market and to see how Romania could resize its fossil capacity investments and achieve a carbon-neutral power sector in 2040. The models simulate a fully functional and liberalised energy markets to show the impact of different measures on wholesale energy prices. Based on the modelling results several important conclusions can be drawn: Romania can reach a completely decarbonised electricity production mix in 2040 with no security of supply risks by aiming to have no more than 3.5 GW1 of total installed gas-fired capacities by 2030 and by focusing more on wind power and a higher deployment of storage technologies. In contrast, the investments outlined in Romania’s National Energy and Climate Plan (NECP) do not ensure a decarbonised energy sector by 2040. The Romanian power sector would emit 9.2 MtCO2 in 2030 (which can be halved in a lower-gas scenario) and 3.5 MtCO2 in 2040, at slightly higher wholesale electricity prices. Replacing natural gas with hydrogen in 2035 in the all-installed capacities (as outlined in Romania’s Long-Term decarbonisation Strategy) would mean that these assets would no longer be utilised. This is because replacing gas with hydrogen would significantly deteriorate the cost-competitiveness of these capacities, immediately reaching a utilisation rate lower than 0.1%, given the high fuel prices of 82 EUR/MWh in 2030, according to renewable hydrogen cost estimations presented in the draft National Hydrogen Strategy. There is therefore a significant risk that even ‘hydrogen-ready’ investments would continue to operate on fossil fuels for economic reasons, consequently not achieving their promised emissions reductions. A higher focus on wind energy (17.7 GW onshore and 7.3 GW offshore in 2040,compared to 13.1 GW altogether in official plans) can contribute to decarbonising the power sector by 2040. Romania appears to have a regional competitive advantage in wind production. The market value of wind remains higher than that of solar for all modelled years, while lower wind investments are expected in Hungary and Bulgaria. Even with higher renewable shares than presented in official documents, Romania’s power sector can deliver on security of supply requirements. The higher balancing reserve requirement can be accommodated through investments in storage (reaching 880 MW in 2030 and 3.4 GW in 2040) covered by existing hydro capacities, new storage installations and, until 2035, gas power plants. An annual installation of 800 MW rooftop PV and 120 MW in battery can further decrease balancing pressures and slightly decrease wholesale prices (by about 1.1 EUR/MWh in 2040). A high renewables scenario would also have a positive impact on the electricity trade balance. In either scenario, Romania becomes a net exporter of electricity from 2030. 17.5 GW of solar capacities as well as 17.7 GW onshore and 7.3 GW offshore wind is sufficient to achieve a decarbonised power sector by 2040. Existing hydro power facilities are key for balancing a renewables-dominated power sector. However, new investments in hydro capacities (including 300 MW in small hydro installations and a 1 GW pumped hydro capacity that would come online in 2032) would only have a limited effect on electricity prices and security of supply – assuming the mentioned battery storage investments are realised. Hard coal and lignite phaseout are manageable from a security of supply perspective, even with lower than planned investments in gas capacities. Based on market prices alone, the modelling results show that coal fired production will rarely be economical from 2025 (expected capacity factor of less than 1%). New nuclear energy capacities can contribute to achieving a decarbonised power sector, even if the planned investments suffer delays. The modelling results show that slight delays in the construction of new nuclear (two new conventional CANDU reactors and 460 MW of small modular reactors) do not pose security of supply risks, even in a lower-gas scenario of 3.5 GW installed gas capacities. Even with such delays, Romania would continue to be a net electricity exporter after 2030 based on the expansion of its renewable capacities, albeit the prices of electricity and CO2 would be slightly higher, because of the nuclear delay. Additionally, the refurbishment of Cernavodă’s Unit 1, scheduled for 2027–2029, which will take 700 MW out of the system, will not pose supply security risks, even in a lowergas scenario. This is because significant new renewable energy sources (RES) will begin operating, with solar energy nearly doubling from 4.3 GW to 8.2 GW and onshore wind increasing by more than 50% from 5 GW to 7.9 GW between 2025 and 2030. Natural gas capacities will increase by 500 MW, and battery storage will see an approximately fourfold growth in the same timeframe. Mihnea Cătuți, EPG Head of Research Mihnea is the Head of Research at EPG, coordinating the research strategy and activities within the organisation. His expertise includes EU climate and energy policy and the transition in South-East Europe.He is also an Associate in E3G’s Clean Economy Programme, contributing to the work on industrial decarbonisation. In the past, Mihnea was an associate researcher at the Centre for European Policy Studies (CEPS), where he led the work on the future of hydrogen in the EU. He was also an associate lecturer in Public Policy at the University of York. Mihnea has a Bachelor of Science degree from the University of Bristol and...

În siajul crizei energetice declanșate în 2022, caracterizată de un deficit de gaze naturale pe piețele europene și niveluri record ale prețurilor energiei, pompa de căldură iese în evidență ca fiind cea mai eficientă și mai puțin poluantă soluție pentru încălzirea și răcirea clădirilor. Prezentul studiu estimează perspectivele pompelor de căldură pentru locuințe individuale și clădiri în România până anul 2030, luând în calcul tehnologiile mature comercial în prezent printr-o modelare bazată pe multiple scenarii plauzibile de adopție a tehnologiei. Prima secțiune a studiului prezintă principiul termodinamic de funcționare al pompelor de căldură, principalele tipuri constructive și caracteristicile generale de utilizare. Supozițiile, scenariile și metodologia de lucru sunt descrise pe scurt în secțiunea 2. Secțiunea 3 redă rezultatele analizei din punct de vedere al numărului de pompe de căldură instalate, pe tipuri de clădiri și de tehnologie, precum și costurile estimate ale instalării și operării acestor sisteme. Rezultatele includ date comparative privind consumul dislocat de gaze naturale prin înlocuirea centralelor de apartament cu pompe de căldură, împreună cu emisiile evitate de gaze cu efect de seră (CO2 echivalent). Secțiunea 4 conține o serie de recomandări de politici publice prin care este facilitată adopția pompelor de căldură în România, inspirate de bune practici din alte state membre ale UE pentru depășirea barierei costurilor mari de investiție (CAPEX) și asigurarea unui raport al prețului final energie electrică/gaze naturale care să stimuleze utilizarea pompelor de căldură. Radu Dudău, EPG Co-Founder & President Radu Dudău is President and co-founder of EPG. He was, from 2007 to 2023, an Associate Professor at the Bucharest University. From 2006 to 2010 he was Deputy Director at the Romanian Diplomatic Institute (Ministry of Foreign Affairs). He graduated in Physics and Philosophy from the University of Iași. He holds a Dr. Phil. degree in Philosophy (magna cum laude) from Konstanz University (Germany) and a PhD in Political Science (International Relations) (summa cum laude) from the National School of Political and Administrative Studies (SNSPA, Bucharest). He was a Fulbright Fellow with the National Security Program at Harvard Kennedy School of Government (2011), a New Europe College Fellow at the Danish Institute of International Relations (Copenhagen, 2006) and an OSI/FCO-Chevening scholar at Oxford University (1999-2000). His work focuses on energy policy, energy technology, and energy markets. Contact: office@enpg.ro

Electricity grids play a critical role in the European Union’s efforts to reduce greenhouse gas emissions (GHG) and become climate neutral by 2050. They must accommodate an increasing demand of clean electricity in transports, buildings’ heating and cooling, industry, production of green hydrogen, and data centres. Projections indicate a surge in electricity consumption of no less than 60% between 2023 and 2030 at EU and UK level. According to the draft NECP, Romania’s electricity consumption is expected to grow by approximately 38% until 2030, from 46.5 TWh in 2021 to 64 TWh. The increase will be driven by the electrification of several economic sectors. The adoption of heat pumps, along with a steady rise in the number of electric vehicles (EVs) will visibly add to higher electricity consumption. The European Commission (EC) estimates needed investments of €584bn in the power grids to achieve the integration of vastly increased RES generation – 42.5% by 2030. The figure includes both the distribution and transmission networks, with about of €170bn required for digitalisation (EU Action Plan for Grids, 2023). As Romania charts its course toward a sustainable and decarbonised energy future, the importance of expanding and modernising the transmission and distribution grids cannot be overstated. Grid infrastructure forms the backbone of the energy transition, facilitating the integration of renewable energy sources (RES) and ensuring a reliable and efficient delivery of electricity to consumers, as well as their empowerment according to the new electricity market design. The investment needs for Romania’s electricity grids are substantial, with €6.8bn earmarked for transmission and an estimated €9.2 - 11.5bn required for distribution. Such investments are essential to accommodate the growing RES capacity and to meet the targets outlined in the draft NECP. Failure to adequately invest in the power grid risks bottlenecking the transition to clean energy and Romania’s ability to achieve its climate and energy objectives. Investing in the power grid development represents a critical opportunity for Romania to modernise its energy infrastructure, enhance grid resilience, and drive economic growth. Strategic investment in grid modernisation will improve energy efficiency, reduce transmission losses, and bolster reliability, ultimately benefitting consumers and businesses alike. To realise these benefits, the following recommendations should be considered: Stable and clear regulatory framework that supports investments Increased funding from EU mechanisms such as the Modernisation Fund (MF) Consistence between the national strategic documents Ensure adequate workforce for grid development Prepare for a back-up scenario in which not all investment needs are met by 2030. Alina Arsani, EPG Head of Energy Systems Alina Arsani is leading the Energy Systems Programme of EPG. She has experience in (macro) economic analysis and public affairs, being specialised in public policies assessment. She is a PhD candidate at the Bucharest University of Economic Studies, where she taught microeconomics and macroeconomics courses for undergraduate students. Before joining EPG, Alina worked for the Department for Foreign Investments and Trade within the Romanian Government, as well as a public affairs expert for one of the largest utility companies in Romania and as a manager for PwC Romania. Contact: alina.arsani@enpg.ro

Regulamentul privind industria net-zero (NZIA), adoptat la sfârșitul lunii mai, marchează o nouă abordare a politicii industriale în Uniunea Europeană. Noul regulament vine ca răspuns la o îngrijorare crescândă că industria Uniunii își va pierde competitivitatea într-o lume cu emisii reduse de dioxid de carbon (CO2). Fiind încă dependentă de industria grea, dar având și un mare potențial de a dezvolta noi industrii născute din nevoia de decarbonizare, România ar trebui să privească NZIA ca pe o șansă de a deveni un jucător în industria cu emisii reduse de dioxid de carbon, precum și de a depăși barierele instituționale care împiedică de prea mult timp această dezvoltare. Potențialul românesc acoperă un număr de industrii-cheie, cum ar fi energia regenerabilă, producția de hidrogen verde și captarea și stocarea carbonului (CCS), unde dispozițiile NZIA privind accelerarea proceselor de autorizare pot stimula semnificativ investițiile. Luciana Miu, EPG Head of Clean Economy Luciana Miu is the Head of Clean Economy at Energy Policy Group. She holds a Master’s degree in Sustainable Energy Systems from the University of Edinburgh and a PhD in Energy Efficiency of Residential Buildings from the Imperial College London. Before joining EPG, Luciana worked for the UK Parliament and for the British Government’s Department of Business, Energy and Industrial Strategy (BEIS), as well as a consultant for Climate-KIC and London City Hall. Contact: luciana.miu@enpg.ro

Lipsa dezbaterilor la nivel național despre viitorul și impactul politicilor climatice subminează abilitatea României de a participa în negocierile importante din următorii cinci ani.  Discursul politic din campania electorală a fost complet acaparat de luptele de tranșee duse la nivel local, cu schimburi interminabile de atacuri virulente între candidați. Subiectele țintite de politicieni în strategiile lor de comunicare au fost mai puțin despre soluțiile oferite comunităților în care trăim, cât mai degrabă pe atacuri ad hominem despre (ne)cinstea adversarilor. Între timp, cu excepția câtorva pâlpâiri timide, dezbaterile despre ideile propuse de candidații la europarlamentare au lipsit cu desăvârșire. Din păcate, acest lucru reflectă nu doar apetitul scăzut al politicienilor români de a participa la marile discuții despre viitorul UE, ci indică și absenteismul de facto al României din cele mai importante negocieri ale Uniunii pe durata următorului mandat al instituțiilor europene. Sub presiunea crizelor succesive din ultimii ani, capitalele europene se lansează în schimburi aprige despre dezvoltarea unei politici comune de apărare, creșterea competitivității industriei, modelarea pieței interne, stimularea inovării și revoluției digitale, uniunea piețelor europene de capital, dar și gestionarea escaladării tensiunilor comerciale la nivel global, în special între SUA și China. Unul dintre cele mai importante subiecte pentru Europa rămâne răspunsul la criza climatică. Deși obiectivele principale au fost deja stabilite prin Pactul Verde European și legislația adoptată în ultimii cinci ani, atenția se mută treptat către o perioadă de implementare, în care mai multe probleme politice rămân nerezolvate. Prima astfel de dezbatere este despre viitorul producției industriale în Europa. Pe de-o parte, industriile energo-intensive vor trebui să se încadreze într-un calendar ambițios de reducere a emisiilor de carbon ca urmare a reformei schemei UE de comercializare a certificatelor de emisii. Industrii precum cea siderurgică, a cimentului sau a produselor chimice vor trebui să suporte din 2034 din propriul buzunar costurile depline ale emisiilor lor de CO2. În același timp, lichiditatea piețelor din care producătorii industriali trebuie să își cumpere certificatele va fi din ce în ce mai limitată, deoarece din 2039 nu vor mai fi introduse în piață certificate noi. Ca răspuns la această provocare, țări ca Germania și Franța au început să aloce miliarde de euro sub forma ajutoarelor de stat pentru acoperirea parțială a investițiilor operatorilor economici autohtoni, măsuri facilitate de suspendarea temporară a regulilor de acordare a ajutoarelor de stat în UE.         Aproape 80% din ajutoarele de acest tip au fost acordate în două țări, care beneficiază de un spațiu fiscal generos comparativ cu restul statelor membre.  O situație similară se conturează și pentru atragerea producătorilor de tehnologii curate, cum ar fi panourile fotovoltaice, turbinele eoliene, electrolizoarele, bateriile sau tehnologiile de captare și stocare a dioxidului de carbon. Aceleași state acordă deja ajutoare și facilități fiscale și au în vedere chiar și garantarea unor prețuri preferențiale pentru energia electrică pentru aceleași companii industriale. Negocierile pentru un fond european suveran care să distribuie ajutoarele financiare în mod echitabil la nivelul UE au eșuat, iar platforma „Tehnologii strategice pentru Europa” nu face decât să permită redirecționarea unor fonduri deja existente.  În lipsa unui mecanism compensatoriu de transferuri fiscale între state, dezechilibrele create în piața internă sunt evidente. Câteva soluții pentru această adevărată bombă cu ceas au fost deja enunțate. De exemplu, Enrico Letta a propus în raportul său despre redresarea pieței unice europene crearea unui fond comun care să fie alimentat cu un procent din fiecare ajutor de stat acordat în UE și care să fie apoi redistribuit pentru a compensa potențialele dezechilibre create. Alte soluții includ negocierea de noi surse de finanțare a bugetului comun UE sau regândirea politicii de coeziune, care are deja mecanisme pentru promovarea convergenței economice între regiuni și ar putea susține relansarea industrială în zonele defavorizate. Vocile politicienilor români lipsesc din toate aceste negocieri. O a doua mare dezbatere se conturează în jurul impactului social al tranziției și erodării susținerii cetățenilor pentru implementarea politicilor climatice. Pe lângă stimularea transformării industriale, reforma schemei UE de comercializare a certificatelor de emisii mai introduce un sistem paralel bazat pe aceleași principii de piață pentru reducerea treptată a emisiilor din transportul rutier și încălzirea-răcirea clădirilor. Tranziția energetică se mută astfel, la propriu, în casele cetățenilor. Și aici, impactul va fi cel mai mare în Europa Centrală și de Est, unde tiparele existente de sărăcie și vulnerabilitate pot fi exacerbate de impactul regresiv al unui preț al emisiilor de carbon. Este deja evident că mecanismele europene de combatere a acestor efecte adverse sunt insuficiente. Fondul Social pentru Climă nu este doar subdimensionat, dar acesta nici nu ar trebui privit ca un mecanism cu adevărat compensatoriu pentru cei afectați de costurile emisiilor. Una dintre lecțiile recentei crize energetice este că semnalele de preț pot funcționa. Ca dovadă, românii își instalează în număr foarte mare panouri fotovoltaice ca răspuns la creșterea prețurilor energiei, reducându-și și amprenta de carbon. În plus, Fondul Social pentru Climă nu trebuie văzut ca un instrument de politică socială și nu poate contrabalansa fragilitatea Pilonului european al drepturilor sociale. Fără extinderea dimensiunii europene a sistemului de politică socială, UE nu poate formula răspunsuri adecvate la inechitățile socio-economice cauzate uneori chiar de propriile politici. Politica socială rămâne momentan o competență aproape exclusiv națională.  O strategie mai potrivită de reducere a impactului social al măsurilor climatice este abordarea cauzelor fundamentale ale sărăciei și vulnerabilității în țările europene. Și în acest caz, politica de coeziune a UE poate avea un rol mai important, inclusiv prin combinarea ei cu noua politică industrială, contribuind astfel la relansarea economică a regiunilor defavorizate economic. Cu excepția câtorva voci mai degrabă periferice, politicienii români sunt de negăsit și în aceste dezbateri. Puținele idei formulate de candidații români se concentrează pe propuneri superficiale de obținere de fonduri suplimentare, fără contribuții active la schimburile de opinii despre problemele profunde ale UE. Spre exemplu, România încă nu are nici măcar un politician cu greutate care să stăpânească mecanismele piețelor de certificate de dioxid de carbon (pilonul principal al politicilor climatice UE) și să poată formula propuneri credibile despre viitorul acestor sisteme. În schimb, în țări precum Suedia și chiar Italia, astfel de discuții se regăsesc inclusiv în paginile ziarelor de mare tiraj....

The public discourse is still flooded with faulty narratives on the future of hydrogen, especially on the doubtful expectation that hydrogen can either replace the use of natural gas in most current uses and it can therefore provide a lifeline for the continued use of fossil fuels throughout the following decades. To counter such narratives, this paper dispels a set of nine myths that are still pervasive in national discussions on hydrogen.

Revizuirea Planului Național Integrat privind Energia și Schimbările Climatice (PNIESC) reprezintă o oportunitate de a explora opțiunile României pentru reducerea cu 99% a emisiilor de gaze cu efect de seră (GES) până în 2050 și cu 78% până în 2030, ținte stabilite în Strategia pe Termen Lung (STL) și incluse în forma draft a PNIESC.

Până la 30 iunie 2024, fiecare stat membru al UE are obligația de a transmite Comisiei Europene propunerile de revizuire ale Planurilor Naționale pentru Energie și Schimbări Climatice (PNIESC), Conform Regulamentului (UE) 2018/1999. PNIESC este documentul-cadru prin care statele își asumă o serie de obiective, politici și măsuri ce vizează procesul de decarbonizare și implicit contribuția la atingerea obiectivelor asumate la nivel european până în anul 2030 cu perspectiva de a obține neutralitatea climatică până în anul 2050.

The Net Zero Industry Act (NZIA) agreement between the Council and the European Parliament establishes a framework of measures for strengthening Europe’s net zero technologies and manufacturing ecosystem. The regulation aims to boost domestic production of clean technologies so that EU member states may develop a more even, competitive and green industrial sector fit for a carbon-free world.  Still, Europe's response to the US Inflation Reduction Act, agreed upon last month, both delivers and underdelivers, according to EPG’s experts. While the new provision to speed-up permitting for production sites for clean technologies and the introduction of net zero acceleration valleys will for sure be beneficial to enabling cleantech manufacturing in the EU, many implementation details are left for the member-states to figure out on their own.  Quotes Luciana Miu – EPG Head of Clean Economy, on NZIA's meaning for Romania: "The European Parliament and Council have reached an agreement on the NZIA, a key policy underpinning the EU’s transition to net zero. Its effect on Member States will no doubt be profound: if appropriately implemented, the Act will enable a new paradigm of green growth and industrial transformation in the global race to scale up net zero technologies.  For Romania, opportunities abound to become a low-carbon hub for Central and Eastern Europe. The NZIA’s obligations on speeding up permitting can help remove longstanding administrative barriers for Romania’s development of clean energy projects, while non-price resilience criteria can trickle down to enable nearshoring and local economic development. Through its obligation to develop geological CO2 storage, the NZIA will also launch carbon capture and storage in Romania, crucial to decarbonising the cement industry and enabling future negative emissions.  The NZIA is not without its flaws. Its relatively vague definitions of net zero technologies can lead to superficial application, without due consideration of actual life-cycle climate and economic impact. Romania must ensure that implementation of the NZIA follows a clear strategy for smart, sustainable growth and transformation in line with nationally adopted climate targets." Contact Person Luciana Miu – EPG Head of Clean Economy: luciana.miu@enpg.ro

It is difficult to overstate the urgency and magnitude of Romania’s industrial transformation. Heavy industry sectors such as steel, cement, and chemicals employ thousands of workers and are key contributors to the national economy. But their conventional, carbon-intensive processes are becoming increasingly obsolete in a world rapidly moving towards sustainable forms of production, as the competitive edge in industry slowly shifts from cheap to green. Transforming these processes is a sizeable challenge, but also an opportunity of significant proportions. By 2034, Romania’s steel, cement, and chemicals manufacturers, all sectors deemed to be at risk of carbon leakage, will no longer benefit from exemptions from paying for their emissions. In today’s carbon prices, this could mean costs of €60 million per year just for emissions for a plant producing 1 million tonnes (Mt) of cement; close to double if EU carbon prices rise as predicted by some models. There is one decade left for Romania’s heavy industry to slash its emissions in order to continue operating and competing. This is just about enough time to assess feasibility, make an investment decision, secure new equipment and technologies from an increasingly oversubscribed market, install, test, and phase in these new technologies and processes, and reskill the workforce. All this under the optimistic assumption that Romania’s existing infrastructure is fit for purpose, new infrastructure has been deployed to the required scale, and state support is forthcoming to leverage the massive required investments. Luciana Miu, EPG Head of Clean Economy Luciana Miu is the Head of Clean Economy at Energy Policy Group. She holds a Master’s degree in Sustainable Energy Systems from the University of Edinburgh and a PhD in Energy Efficiency of Residential Buildings from the Imperial College London. Before joining EPG, Luciana worked for the UK Parliament and for the British Government’s Department of Business, Energy and Industrial Strategy (BEIS), as well as a consultant for Climate-KIC and London City Hall. Contact: luciana.miu@enpg.ro

The decarbonisation of primary steel production is one of the most pressing challenges for the future of Romania’s industry. A highly carbon-intensive process, conventional primary steelmaking faces increasing pressure to transform in the context of the EU’s climate commitments: a phase-out of free allocation under the EU Emissions Trading System, upcoming regulations on sustainable products, and a rapidly rising carbon price. This pressure is insufficiently recognised in Romania’s industrial and climate strategies: its Long-Term Strategy, draft National Energy and Climate Plan, and draft national Industrial Strategy all fail to account for the scale of the transformation challenge and the associated opportunities for green steelmaking. While Romania’s steel sector has shrunk since 1990, it still contributes significantly to the national economy and employment, and emits approx. 6.3% of total national carbon dioxide (CO2) emissions. These contributions are centred on Liberty Galați, Romania’s only remaining primary steel producer, which employed nearly 5,000 people in and emitted 4.39 mega-tonnes (Mt) of CO2 (5.9% of Romania’s total CO2 emissions) in 2021. It is a major contributor to economic activity in the Galați county, a Just Transition region, and is an essential part of any attempt to revive Romania’s upstream manufacturing sector and any ambition to supply domestic and foreign downstream sectors, such as the auto industry, with high-quality, low-carbon steel. The main pathway to deeply decarbonise conventional primary steelmaking is conversion of the conventional blast furnace-basic oxygen furnace (BF-BOF) process to the direct reduction of iron, coupled with melting in electric arc furnaces (DRI-EAF). To achieve deep decarbonisation, the DRI process must use low-carbon hydrogen as a reducing agent, and the whole steelmaking process must be supplied by renewable electricity. Transitioning from BF-BOF to hydrogen-based DRI-EAF production will shift the fuel mix of primary steelmaking from fossil-based to using primarily electricity and hydrogen, and will change raw material requirements, including an increased consumption of scrap steel. Other decarbonisation pathways include a complete conversion to secondary steel production (using scrap steel or imported green iron) or carbon capture, all with their own challenges. Liberty Galați has publicly announced a decarbonisation pathway involving a conversion from BF-BOF to DRI-EAF, using natural gas as a transitional DRI agent and fully switching to renewable hydrogen by 2030. This deep decarbonisation plan (the “GREENSTEEL plan”) will accompany a doubling in production, reaching 4.1 Mt of liquid steel by 2030. According to our estimates, executing the GREENSTEEL plan could slash emissions from the production of liquid steel (responsible for 81% of emissions in primary steel production) by 93% by 2030, a reduction of 3.26 Mt CO2 per year. This could give Liberty Galați a significant competitive edge as a green steel supplier, meeting increasing demand from downstream sectors such as the auto industry. It could also spur a local green economy, including for the production of renewable electricity and hydrogen to supply the DRI-EAF pathway, which will consume over 160,000 tonnes of hydrogen per year. To truly achieve deep decarbonisation, the transformation of Liberty Galați under the GREENSTEEL plan will require a massive mobilisation to deploy renewable energy capacities, invest in renewable hydrogen production, and secure a reliable supply of scrap steel. Electricity consumption of the steelmaking process alone would increase ten-fold, and even if hydrogen production is outsourced abroad, meeting the target specific emissions of the GREENSTEEL plan will require the carbon intensity of Romania’s electricity grid to halve. Using domestically-produced renewable hydrogen will require an additional 6.35 GW of renewable electricity capacity, 136% of Romania’s total installed wind and solar energy in January 2024. The renewable hydrogen requirement of Liberty Galați in 2030 would be more than currently stipulated in Romania’s national Hydrogen Strategy for the entire Romanian economy, and scrap steel consumption would increase four-fold, amounting to 80% of Romania’s current scrap exports. The investment cost of the transformation itself, including the operating costs of using renewable hydrogen, will likely require state support both directly and indirectly to increase investment certainty. If Romania’s primary steelmaking is to spearhead industrial transformation and revive the competitiveness of manufacturing, urgent action must be taken to provide concrete, detailed transformation plans which are accounted for in national industrial and climate strategies. Targeted and carefully sized public financing instruments, including Green Public Procurement and Carbon Contracts for Difference, will be essential to meet upfront investment costs, especially in the coming decade as industrial operators begin to strain under increasing carbon prices. Infrastructure development will also be crucial, most importantly the deployment of renewable electricity capacities, strengthening of Romania’s national electricity grid, installation of electrolysers and construction of hydrogen transport infrastructure. New supply chains for raw materials will also be needed, particularly a rethinking of Romania’s export-oriented scrap steel sector. These actions will be necessary regardless how Liberty Galați decarbonises and require a shift in the approach of policymakers to the challenges of Romania’s industrial transformation. A correction was made to this report on 14/03/2024. The increase in direct electricity consumption quoted in the Conclusions and Recommendations section (page 33) was corrected to 1,000%. A further correction was made to this report on 03/06/2024. Figure 4 (page 17), Table 5 (page 16), and Table 4 (page 15) were updated with small corrections to the values for electricity and natural gas consumption. Luciana Miu, EPG Head of Clean Economy Luciana Miu is the Head of Clean Economy at Energy Policy Group. She holds a Master’s degree in Sustainable Energy Systems from the University of Edinburgh and a PhD in Energy Efficiency of Residential Buildings from the Imperial College London. Before joining EPG, Luciana worked for the UK Parliament and for the British Government’s Department of Business, Energy and Industrial Strategy (BEIS), as well as a consultant for Climate-KIC and London City Hall. Contact: luciana.miu@enpg.ro

The Commission released a comprehensive impact assessment outlining potential approaches to reach the established objective of achieving climate neutrality in the European Union by 2050. In accordance with this assessment, the Commission suggests a 90% net reduction in greenhouse gas emissions by 2040, relative to 1990 levels. It also articulates several imperative policy conditions for achieving this target, including meeting 2030 goals, industrial competitiveness, and an inclusive dialogue on post-2030 climate action. In particular, a just transition with adequate measures for energy price affordability and the mitigation of social impact will be essential.     Quote Ioana Vasiliu - EPG Senior Researcher: "Romania, as a member of the EU, should align with this target and play a significant role in contributing to the overall climate action.  To set its commitment and ensure accountability, the implementation of Climate Law, including clear emissions goals for 2030, 2040, and 2050, is imperative. This legal framework will play a pivotal role in addressing essential aspects, including industrial competitiveness, where sectoral emissions reduction plans will be crucial for Romania’s industries to compete in a low carbon world. Enshrining energy efficiency targets into a Climate Law will also be key to increasing the rate and depth of renovation in Romania’s building stock, which are struggling to keep up with the pace required to meet the EU's climate goals.  Recognizing the socio-economic impact of the transition to climate neutrality, especially in terms of energy poverty, a just transition is crucial. Given the ambition of reducing EU-wide emissions by 90% until 2040, Member States must devote substantial attention to putting in place effective measures for managing the subsequent impact on jobs and local economies, which will be vital for a smooth transition towards a sustainable future.  To fully align with the EU's more ambitious 2040 climate targets, Romania also needs to intensify efforts in critical areas such as transportation and land use. By implementing policies that support sustainable agriculture and protect natural ecosystems, Romania can contribute to the EU's climate targets while also safeguarding its natural heritage."   Contact person: Luciana Miu – EPG Head of Clean Economy: luciana.miu@enpg.ro Ioana Vasiliu – EPG Senior Researcher: ioana.vasiliu@enpg.ro

The European Commission’s first ever strategy governing carbon capture, utilisation and storage (CCUS) – the Industrial Carbon Management Strategy – is an important step for the deployment of CCS in Europe. For Romania and Central and Eastern Europe (CEE), with potentially significant carbon storage capacity and important industries that will need to capture their emissions, this long-awaited Strategy sets a strategic direction which should enable firmer and quicker action on making CCUS a reality, and enabling a fair geographical spread of new technologies and infrastructure across a currently West-centric Europe.    Quote Luciana Miu - EPG Head of Clean Economy: "The Strategy does well to broach the subject of actual climate benefits of CCUS projects, including a focus on “process emissions” in the decade to 2030 and a chapter on the removal of atmospheric and biogenic CO2. However, the incoming Commission can be bolder in differentiating climate-positive use cases of CCUS, particularly given the vague language around capturing CO2 in the power sector in the EU’s 2040 climate target.  While restrictive lists of eligible capture sites may be counterproductive, there is really no such thing as “clean carbon”, and facilities should be required to conduct a thorough assessment of their technological options for reaching a clear emissions target, before requesting public funding for carbon capture.  Importantly, the Strategy also addresses the issues of CO2 transport, a key part of the CCUS value chain, and we hope to soon see an associated dedicated regulatory package on this complex issue, as indicated in the Strategy. Funding will also be available, with a call forthcoming for cross-border CO2 transport infrastructure under the Connecting Europe Facility. This is a good opportunity for CEE countries to plan regional CO2 transport, developing storage hubs in the eastern Mediterranean Sea and Black Sea areas to balance the North Sea-focused CCS landscape in Europe. The commitment to develop minimum standards for CO2 streams is also welcome.  For an efficient decarbonisation of EU industries, it is vital that CCUS projects demonstrate climate benefits in line with emissions targets. Carbon capture and utilisation (CCU) pathways which do not allow for carbon recycling (including e-fuels and Enhanced Hydrocarbon Recovery) should be subject to rigorous accounting to avoid unnecessary sunk costs and greenwashing. The Strategy’s promise to start addressing these issues in the 2026 EU ETS revision may not be enough to firmly direct EU CCUS sector towards projects with durable climate benefits. Indeed, this is the original remit of the CCUS Observatory, a watchdog project proposed by EPG and now being piloted by the European Commission.  It is disappointing to see the ever-neglected issue of public perception of CCUS only briefly addressed in the Strategy. As co-chair of the CCUS Forum’s Working Group on public perception of CCUS, EPG heard consistently from a wide range of stakeholders about the importance of considering public perception, particularly at community level, and engaging in earnest public dialogue for upcoming projects. The lack of a clear mandate for project developers to conduct transparent public engagement is a missed opportunity. It risks leading to a fragmented approach in aligning CCUS project deployment with social needs and concerns, and ensuring that CCUS is part of a Just Transition."   Contact person: Luciana Miu – EPG Head of Clean Economy: luciana.miu@enpg.ro

Romania has one of the lowest targets under the revised Effort Sharing Regulation (-12.7% GHG emissions by 2030 compared to 2005) but given the relative neglect of the covered sectors over the past years, there will be distinct challenges for implementation, particularly in the buildings and transport sectors. At the very least, Romania should achieve its goal without overusing the available flexibility tools.

La finalul anului 2023, Guvernul României a publicat mult-așteptata Strategie industrială a României 2023-2027, promisă în programul coaliției de guvernare. Publicarea acestei strategii este un pas important în coagularea unui cadru instituțional capabil să gestioneze provocările multiple și intersectate ale industriei din România și să asigure o tranziție digitală și verde, atât durabilă, cât și justă. Cu toate acestea, în forma sa actuală strategia industrială oferă mai multe semne de întrebare decât răspunsuri spre soluționarea acestor provocări, și are nevoie de o abordare mai riguroasă pentru a funcționa drept piatra de temelie a tranziției industriei românești.

În 2024 România ar trebui să își regândească modelul de dezvoltare economică printr-o reorientare către tehnologiile viitorului și tranziția către o economie cu emisii reduse de gaze cu efect de seră. Pentru aceasta este necesară renunțarea la apatia clasei politice și la căutarea soluțiilor în trecut și reorientarea priorităților naționale către o economie bazată pe utilizarea surselor de energie curată, dezvoltarea infrastructurii energetice, atragerea lanțurilor valorice pentru tehnologiile verzi și susținerea capacității de cercetare și inovare pentru crearea de locuri de muncă bine plătite, care să poată răspunde provocărilor următoarelor decenii. Mihnea Cătuți, EPG Head of Research Mihnea is the Head of Research at EPG, coordinating the research strategy and activities within the organisation. His expertise includes EU climate and energy policy and the transition in South-East Europe.He is also an Associate in E3G’s Clean Economy Programme, contributing to the work on industrial decarbonisation. In the past, Mihnea was an associate researcher at the Centre for European Policy Studies (CEPS), where he led the work on the future of hydrogen in the EU. He was also an associate lecturer in Public Policy at the University of York. Mihnea has a Bachelor of Science degree from the University of Bristol and a Masters in European Public Policy from the University of York and the Central European University. He is currently finalising his PhD at the University of York focusing on energy and climate governance in the EU. Contact: mihnea.catuti@enpg.ro

Spre deosebire de emisiile operaționale de carbon, care țin de consumul de energie în clădire și care fac obiectul măsurilor de creștere a eficienței energetice, emisiile încorporate ale clădirii sunt cele care țin de materialele de construcții și de activitățile de construcție, precum și de tratamentul la finalul duratei de utilizare. De aceea, contribuția sectorului clădirilor – care, în UE, reprezintă mai bine de 40% din consumul total final de energie – la realizarea unei traiectorii de neutralitate climatică până în 2050 nu poate fi realizată fără controlul și reducerea emisiilor încorporate de carbon.

This paper undertakes a comprehensive examination of Romania's first National Energy and Climate Plan (NECP) which was submitted to the European Commission in April 2020. The aim is to track the implementation progress and to assess the achievability of the outlined objectives based on recent data trends and modelling scenarios using the 2050 Pathways Explorer tool. The paper also takes reference to the revised objectives under the Fit for 55 package, especially for the buildings and transport sectors, with the aim of showing how current NECP implementation shortcomings may make the newer, more ambitious objectives even more difficult to reach.