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    Brussels clears Romanian state energy aid


The government will refund up to 75% of indirect emission costs from power generation for eligible companies.

by: NGW

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Brussels clears Romanian state energy aid

The European Commission has approved €1.5bn ($1.5bn) of state aid proposed by Romania to shield energy-intensive industries from soaring power prices, stating on September 12 that it will have a limited impact on competition.

Romania plans to partially offset higher power prices caused by the increased cost of carbon permits between 2021 and 2030. This will avoid carbon leakage, where companies relocate their production to outside the EU that have less ambitious climate policies, the commission said.

Specifically, the government will refund up to 75% of indirect emission costs from power generation. To be eligible for the support, companies will have to either implement certain energy audit recommendations, cover at least 30% of their power usage with carbon-free sources, or invest at least half of the aid in projects that reduce the greenhouse gas emissions from their installations. They will have three years to comply with one of these obligations.

“This €1.5bn scheme supports Romania in its ambition to reduce the risk of carbon leakage for its energy-intensive industries," commission vice-president Margrethe Vestager said in a statement. "At the same time, the incentives for a cost-effective decarbonisation of its economy will be maintained, in line with the Green Deal objectives, and undue competition distortions will be limited.”