The European Commission approved an aid scheme from Romania to help companies working in energy-intensive sectors to comply with EU climate regulations in order to avoid relocation outside of the bloc and its climate policies.
The scheme involves green certificates mandatory for electricity producers for each megawatt hour produced from renewables. A levy then ensures that costs are passed down to customers. The reason for the scheme is to lower the levy rate of energy-intensive companies. The Commission had already approved a similar scheme from Romania in 2014. The current scheme is set until 2031, with a total budget of €578 million (2.9 billion Romanian Leu).
Companies benefitting from the scheme receive a levy reduction between 75% and 85%, according to their exposure. Beneficiaries have comply to a series of rules, including guarantee investments of at least 50% of the aid towards projects for greenhouse gas reduction.
The Commission had to decide whether the levy can constitute a breach in aid regulations from EU treaties and if it complied with relevant environmental legislation, in particular the 2022 Guidelines on State aid for climate, environmental protection and energy (CEEAG).
Ultimately, the scheme received approval because it was considered proportionate as an aid and appropriate for EU’s Green Deal targets, facilitating economic activities that are particularly exposed to international competition. Overall, the positive effects of the scheme were considered to outweigh the negative ones.
“The scheme maintains incentives for an effective decarbonisation of the Romanian economy, in line with the European Green Deal objectives,” commented Margrethe Vestager, Executive Vice-President in charge of competition policy, after the Commission ruled in favour of the scheme.
