Romania’s industry will need to transform fundamentally to align with climate commitments and remain competitive in a low-carbon world. With increasing pressure from EU policy and a race to decarbonise industrial production in EU Member States, there are progressively fewer windows of opportunity for implementing the new processes and technologies required for greening heavy industry. A fragmented national policy framework and a narrow fiscal space mean that Romania will face significant difficulties in keeping its industry competitive. However, it also has key advantages it can capitalise on to become a low-carbon industry leader.
To achieve economy-wide net zero emissions by 2050, the main pathways for industrial decarbonisation are electrification, continuous improvements in energy and resource efficiency, the uptake of renewable hydrogen and other low-carbon fuels, and carbon capture, utilisation, and storage. Romania’s primary steel, cement, and chemicals production (particularly fertilisers) require the deepest transformation to enable industrial emissions reductions. The technologies needed to achieve these changes are costly, have long lead times, and in some cases imply new materials and supply chains. Furthermore, industrial transformation is not just technological – concerted action will be needed to safeguard the rights of workers in industrialised regions and prepare them for meaningful employment in Romania’s decarbonised industries and in those new industries which may emerge.
To decarbonise Romania’s industry sustainably and justly, three main areas of action must be addressed: industrial policy, funding and market creation, and infrastructure development. Firstly, Romania needs a cornerstone industrial strategy anchored in long-term climate commitments and driven by selective support rather than across-the-board crisis management. This industrial strategy must clearly assign responsibilities to competent authorities, commit to funding and financing instruments, and address socio-economic impact, supply chain management, and research, development, and innovation. Romania’s wider domestic policy framework, as well as its positioning in EU negotiations, must also be consistent with the commitments and goals of its industrial policy.
Secondly, industrial transformation in Romania will require a massive mobilisation of funding and the stimulation of new markets for green industrial products. As a country with a comparatively low fiscal space, Romania cannot rely excessively on state aid granted to industrial producers, as done in countries such as Germany and France. Instead, eventual state aid schemes targeted at competitive industries should be complemented by the use of EU funding opportunities, including the Modernisation Fund and the Innovation Fund, the unlocking private financing, and the implementation of green public procurement to stimulate a reliable lead market for products such as low-carbon steel and concrete. There are significant opportunities in this space, given Romania’s massive planned spending on large-scale infrastructure projects.
Finally, decarbonising Romania’s industry will require huge infrastructure for enabling renewable electricity, hydrogen transport, and carbon dioxide (CO2) transport and storage. The scale of the challenge is significant: electricity consumption will increase and its geographical distribution will change, straining an unprepared transmission grid; new pipelines will be needed for hydrogen and CO2 transport; and CO2 storage capacities must be developed very rapidly. Romania must thus invest significantly in the expansion and strengthening of the electricity transmission grid, and in essence start from scratch in developing a network of hydrogen and CO2 pipelines, as well as CO2 storage.
These key actions for decarbonising Romania’s industry will not be easy. They will require massive investment, coordination within the state apparatus and with industry, and significantly more political engagement on the subject. However, the benefits are undeniable: increased industrial competitiveness, a well-prepared workforce, reliable infrastructure, and a significant contribution to Romania’s climate ambitions. Reaping these benefits will depend first and foremost on understanding the magnitude of the challenge, and subsequently on internalizing it in concrete policy, funding, and infrastructure measures to enable decarbonisation at the required scale and pace.
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.