Commentary

Why Romania needs to establish an independent scientific advisory body on climate change

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

Adoptarea Regulamentului privind industria net-zero – Implicații pentru România

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

Romania’s climate strategies: a missed opportunity to support industrial transformation

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

2024 este anul în care România trebuie să ridice privirea spre viitor

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

Reducerea emisiilor încorporate de carbon în clădirile din UE

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.

Transformarea industriei românești

Deși capacitățile de producție industrială s-au micșorat semnificativ în ultimele 3 decenii, acestea păstrează o contribuție de 16.5% la valoarea adăugată brută națională, și asigură aproximativ o cincime din forța de muncă activă din România. Având în vedere această importanță economică strategică, producătorii de oțel, ciment, chimicale și produse petroliere trebuie să se adapteze rapid la noua realitate a industriei europene, marcată de constrângeri în privința emisiilor de gaze cu efect de seră.

Proposal for a Regulation to improve the EU’s Electricity Market Design: A Brief Assessment

From the second half of March to June 2023, four rounds of revisions have been submitted for the Electricity Market Design during the Swedish Presidency of the Council of the EU, bringing useful clarifications. The present analysis also reflects the main elements of the Presidency’s compromise proposal.

Let’s talk about COP27

Within this new reality and the ensuing global crisis, COP27 was seen by some as an “oasis of diplomacy”, to quote US Secretary of Energy Jennifer Granholm – a space where countries could come together to act on the global challenge that is climate change. But while countries did come together in some landmark agreements, they left Sharm-el-Sheikh without much progress on actual action to mitigate climate change.

Circular Economy and Its Conceptual Hurdles

The concept of circular economy (CE) has become one of the most important pillars of climate change mitigation efforts as its implementation seeks to decouple economic growth from resource use.

Energy Efficiency Directive Revision Impact on the Romanian Energy Sector

The Energy Efficiency Directive (EED) is an essential instrument for achieving the energy and climate objectives of the European Union (EU). The recast EED aims to align its provisions – since many of them require increased ambition and enhancement of their scope – with the target of 55% reduction of greenhouse gas (GHG) emissions by 2030.

Fondul pentru Modernizare: O urgență pentru tranziția energetică din România

Fondul pentru Modernizare (FM) este cel mai important instrument financiar european destinat susținerii tranziției energetice în țările Europei Centrale și de Est până în 2030.

The Carbon Border Adjustment Mechanism and its implications for Romania

The Carbon Border Adjustment Mechanism (CBAM) is a heavily debated legislative proposal for a carbon tax on EU imports from five key sectors (aluminium, cement, fertilizer, iron and steel, and electricity). [1],[2] It has been proposed as part of the Fit for 55 package, with the purpose of preventing carbon leakage (the relocation of carbon-intensive production of tradable goods away from the EU, to avoid carbon costs).

The Revision of the Energy Taxation Directive and its Impact on the Romanian Energy Sector

The current version of the Energy Taxation Directive (ETD) is deemed outdated and misaligned with the EU agenda of promoting renewable energy sources, energy efficiency and greenhouse gas emissions (GHG) reduction. The European Commission’s ETD proposal is a unique opportunity to address some of the missing pieces of the current framework and sets the ground for encouraging the roll out of new, sustainable technologies and products by: building the tax rates based on the energy content and environmental impact, widening the taxation base, by including energy sectors that are not in the scope of the current ETD (aviation, shipping), developing mechanisms to incentivize new energy carriers and technologies, such as hydrogen and storage.

Renewable energy directive revision impact on the Romanian energy sector

The current Renewable Energy Directive (RED II) is being amended, as part of a broader overhaul of EU climate and energy legislation, to update the target and the legislation for delivering at least a 55% reduction in GHG emissions by 2030. The European Commission’s RED revision is the key EU legislative instrument for promoting the uptake of renewable energy sources and lays the foundation for higher RES targets at EU level and in every member state, mainstreaming renewables in buildings, H&C, industry, and transport.

Energy System Integration and the Role of Hydrogen

The sudden interest for hydrogen in Romania is lacking though a robust foundation in policy analysis and planning, having been fueled almost entirely by the momentum that the topic has received at EU and international levels.

The utilizes` payment postponement for three months may be a good idea but with high failure chances

Although sanctioned in the press as a populist and anti-economic measure, the draft law on deferral of payment to utilities for three months, is based on a correct idea of social protection.

The day the oil markets crashed – again. Is this time different?

The global oil industry will continue to be battered by the constraints of climate policies, divestment and lowering returns. True, a depressed oil price environment disincentivizes investment in renewable energy sources, electromobility and, alas, energy efficiency – a lesson well learned in the aftermath of the 2014 oil industry downturn.

Oil markets in 2020: fundamental drivers and geopolitical uncertainties

The fundamental market drivers are pointing at a balanced oil market in 2020, with a Brent price mostly within the $60-70 a barrel – unless, that is, a massive escalation of the geopolitical tensions occurs, following the targeted killing of Iranian general Soleimani, causing large and indeterminate oil supply disruption.

The Draft of the Romanian National Energy-Climate Plan 2021-2030

The analysis carried out in this report shows that the manner in which the NECP draft accommodates the net increases in electricity generation capacity by 2030 for virtually all forms of primary energy – except for the natural gas units, whose aggregate capacity stagnates, and of coal, for which an implausibly low decrease is expected – is to rely on a massive increase in final energy consumption to 341 TWh in 2030 compared to 269 TWh in the PRIMES 2016 projection, and 300 TWh in the Romanian Energy Strategy 2019-2030, with an Outlook to 2050

Energy Efficiency Drivers: Five Lessons for Romania from the IEA 2017 Energy Efficiency Report

How could Romania capitalize on such consistent evidence about how energy efficiency can actually work to the benefit of a state and its energy stakeholders?

The little smart-meter that could

In Romania, the National Energy Regulation Agency (ANRE) has so far approved 36 SM pilot projects in 2015 and 2016 for all eight distribution areas, targeting approximately 270.000 points of delivery out of a total of 7.18 million, which means less than 4% of the population.

History of unitization-based cooperation in the development of offshore cross-border deposits. Part I

This paper traces the history of how states came to cooperate in the development of offshore cross-border oil or gas deposits. First, it explains the shift in how a state´s offshore has come to be viewed from “open to all” to sovereign rights over an exclusive economic zone and finally to cooperation in the interest of all parties concerned. Secondly, it discusses the types of agreements states signed and the problems these agreements solve.

Renewable energy and the conundrum of the Romanian irrigation system

Some say statistics lie and this is sometimes true. However, oftentimes statistical figures are so striking that underlying facts become obvious. At the European level, the irrigation systems differ a lot by technology, but also in terms of irrigable and irrigated areas. According to 2013 data provided by Eurostat, there are important discrepancies between member states.

Natural Gas in the Romanian Energy Mix: Strategic Importance and Circumstantial Barriers

Natural gas is the most important form of energy in Romania’s the final consumption structure. In 2015, gas accounted for 29% of the total demand, followed by oil products with 26%, 19% renewable energy sources (RES (including hydro), 17% coal and 9% nuclear energy. Gas consumption is almost equally divided between the domestic and industrial sectors – in the latter gas is used primarily in the production of electricity and as raw material in petro chemistry.

World oil market in 2017: Contango or backwardation?

Important market players already bet that days with oversupply of crude oil will soon to be outdated and that the market will return to balance – and therefore back in the situation backwards.

Turkmenistan’s gas hurdles: No end in sight

Plummeting oil prices and fallen revenues triggered a chain reaction in Turkmenistan, which has a current account deficit of about $6 bn. Ashgabat devalued the currency by 19%. There have been reports of massive food shortages and unpaid wages.

An analysis of the evolution of electricity prices in January 2017

Given that Romania is quickly moving towards the completion of a centralized natural gas trading market – including through the elimination, from April 2017, of the predetermined price for the internal production of natural gas – it is necessary to make use of the current mechanisms and specific regulations, and to introduce new ones, to limit the effects of possible massive price volatility caused by speculative behavior

Reflections on the New Romanian Energy Strategy

The Energy Ministry posted on December 19 the Energy Strategy of Romania 2016-2030, with an Outlook to 2050. It has been a long-awaited document, on which stakeholders have for years pinned hopes about favored energy policies and from which decision-makers, public and private, expect guidance in the coming years.

Romania holds first capacity auction for Isaccea – Negru Vodă pipeline

Romania’s capacity auction is a significant step in regional gas market opening. At the end of July 2016, Transgaz has signed gasinterconnection agreements with its Bulgarian and Ukrainian counterparts in order to increase interconnectivity and allow bidirectional flow from Ukraine to Greece.

Analysis on the constitutionality of the introduction of a tax on additional profit on the holders of oil agreements

The introduction of the additional tax must be fair, proportionate, reasonable, fair, and the level of taxation must be determined according to objective, rational financial criteria corresponding to the taxpayer contribution (according to the Romanian Counstitutional Court practice)

Natural monopolies:the case of Romania’s distribution network

In Romania, a number of industrial sectors that serve the public interest are strictly regulated – natural gas, railroad or electricity systems, to name a few. As such, for the local energy sector, and particularly for electricity, the transmission and distribution services are regulated as “natural monopolies”

The competitiveness of the refining industry in Romania and the EU

During the evolution of the Romanian oil industry, the refining sector emerged at the end of the 19th century by way of a massive import of foreign capital and advanced technology. In 1895 the construction of Steaua Română refinery started in Câmpina, one of the largest in Europe of that time, with capital of Deutsche Bank.

How are we to pay the energy bills?

The creation of a regional balancing market calls into question the commercial viability of the classical electricity generation capacities which ensure, at the national level, this service.

“Fit for fifty” and perhaps for more…? tax regime for petroluem activities

Nobody can deny the sovereign right of states to charge taxes on any activity including petroleum activities. It is of utmost importance when, why and namely how such fiscal measures are established.

The Idiot’s Guide to Running a Country’s Coal Industry … into the Ground

Our case study of worst practices involves two-state owned businesses, Hunedoara Energy Complex and Oltenia Energy Complex. They are both nearly insolvent, while the Government continues to pump money into their rescue, without, however, any real assurance that the effort will be worth it

The Gemasolar Thermosolar Plant: one step closer to energy storage of the future

Photovoltaic is a unique concept, if looked at how fast this technology has been growing. In the next decade, global demand could be significantly fueled by solar power. Today, just 0.5% of the electricity comes from photovoltaics worldwide. It may seem like a small number, but in 1998 this was 0.003% and if the trend continues, in 2028 it will grow to 50%. Therefore, by then half of the energy demand could come from solar-powered plants.

Biogas: A high-potential, sustainable, yet untapped fuel in Romania

For Romania to increase its biogas production 50-fold, a step change is necessary, even if the level of support is sufficient to make most investments profitable.

Hurdles in the Path of Romanian Gas Market Liberalization

The 2018 calendar was supposed to bring a 3% increase in household gas prices as of 1 October 2014, as a first step towards timely liberalization. In light of the burden that would have thus fallen on households ahead of presidential elections held in December, the Government, through its Department of Energy, requested this delay.

The fairytale that wasn’t: the Iasi-Ungheni gas interconnector

The Iaşi-Ungheni interconnector is a 43 km long pipeline meant to transport up to 1.5 bcm of gas per year from Romania to the Republic of Moldova, under the Prut River that constitutes the border between the two countries. Construction works only took one year, but they followed three years of talks between the two parties. Costs reached a total of €26.4m, most of which was covered by Brussels and Bucharest.

Small-scale LNG – an opportunity for Romanian transportation

Compared to oil products, natural gas is clean burning, with virtually no particle and sulphur emissions, close to no NOx emissions, and lower CO2 emissions. Increasingly, it is also more affordable, despite higher logistics costs. Romania should follow the lead of many other countries around the world, and consider incentives for ship and truck owners to switch to natural gas.

Romania’s energy policies, between liberalisation and environmental protection

Industrial competitiveness gains more and more traction across EU`s energy policy.

Energy independence vs energy security

For the energy public debate in Romania, there are often two seemingly interchangeable terms – security and energy independence. The two concepts are different, however, and understanding the differences is very important

Romania’s energy security options: 2014 and natural gas market projects

Romania's most important foreign energy policy project, the Nabucco gas pipeline, failed definitively in June 2013, when the competition for the transport of Azerbaijani gas to the EU in favour of the TAP (Trans Adriatic Pipeline) project.
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