With a cumulative score of 1.87, Romania ranks number 9 among emerging markets and number 34 in the global ranking.
- Emerging markets
1.92 / 5
2.08 / 5
1.52 / 5
Net-zero goal and strategy
There is no national net-zero target or strategy in Romania, but the country has committed to the European Union’s target of net-zero greenhouse gas emissions by 2050.
Romania has set a target of 31% renewables in final energy consumption by 2030 in its National Energy and Climate Plan (NECP). This target is due for revision as part of the EU Green Deal’s “Fit-for-55” legislative package, which aims to ensure that the EU can meet its 55% emissions reduction target by 2030. Romania met its 2020 target of 24% renewables in final energy consumption already in 2015, but progress in renewables growth has since stalled.
Nationally Determined Contributions (NDC)
Romania is part of the EU’s joint nationally determined contribution (NDC) to the Paris Agreement. The updated NDC, submitted to the UNFCCC in 2021, pledges to reduce emissions by 55% before the end of 2030, compared to 1990 levels.
Fossil fuel phase-out policy
Coal was set for a 2032 phase-out, according to Romania’s 2021 National Recovery and Resilience Plan. However, in 2022, the country brought forward the target to 2030. The plan outlines how Romania aims to spend EU funds available for a green and socially just recovery, following the Covid-19 pandemic.
The government established a green certificate (GC) scheme in 2008 to help achieve its 2020 target of 43% renewable electricity consumption. Poor design and an unexpected drop in power demand caused the scheme to become oversubscribed. To limit upward pressure on retail electricity prices, the government-imposed quota reductions. Successive reforms have failed to resolve the GC oversupply.
New policies have been established to support the 2030 renewable electricity target of 49%. In June 2018, Romania’s parliament approved the introduction of a net-metering scheme for small-scale renewables up to 100kW, which allows individuals to deduct the power they produce from their electricity bill. Residential solar is also supported through the “Casa Verde” grant program that finally kicked off in September 2020 following administrative delays. For utility-scale projects, Romania adopted regulations allowing corporate power purchase agreements for projects built after June 2020. Romania launched a tender in March 2022, for wind and solar projects, with a total budget of €458 millionand capacity of 950MW.
The declining economics of Romanian coal plants was likely a deciding factor when setting the 2030 phase-out target. The carbon price under the European Emissions Trading Scheme has become a heavy financial burden for Romania’s main lignite power producer, CE Oltenia. In 2020, the company was unable to pay for its emissions allowances and was granted a rescue loan by the Romanian state. The EU set conditions for this loan required CE Oltenia to present a plan to move away from lignite generation.
Power prices and costs
Romania's power prices have historically been lower than those of neighboring Hungary and Bulgaria, although they have been steadily rising at 1-2% per year due to higher carbon prices and an aging coal and nuclear fleet. Overall power prices in Romania soared in 2021, whereas demand grew modestly. Industrial, commercial and residential prices grew at an average of 13% whereas wholesale prices plummeted 47% to $85.31 in 2021. Prices had temporarily dipped in 2020 during the Covid-19 pandemic but rose quickly again in 2021. Global gas prices influence Romanian power prices, as around 20% of the country’s electricity is generated from gas.
Romania has gradually shifted toward a liberalized energy sector. Consumers have been able to switch electricity suppliers since 2007, while price liberalization was finalized for non-household consumers in 2014 and household consumers in 2018. The distribution and retail divisions have transitioned to being predominantly privately owned. Major European utility companies CEZ, Energias de Portugal (EDP) and Enel have been present in Romania since the early 2000’s. However, CEZ has since divested all of its Romania assets. Enel, which in 2015 also considered exiting the Romanian market, has announced that it will instead sell off minority stakes in its Romanian subsidiaries.
Romania caps electricity prices (extended until March 2023). Households with monthly consumption of under 500kWh receive a subsidy besides the price cap. The scheme has been expanded for almost all non-household consumers (except large electricity consumers who have benefited from Ordinance 81 on a state aid scheme approved by the European Commission). The government has extended favorable loans to major lignite producer Oltenia to pay for its emissions allowances. The European Commission approved a restructuring aid of up to 2.7 billion euros.
Installed Capacity (in MW)
Electricity Generation (in GWh)
Which segments of the power sector are open to private participation?
Wholesale power market
Does the country have a wholesale power market?
Doing business and barriers
Limited grid capacity, which has historically slowed renewables project delivery, has exacerbated the country’s green certificate oversupply, by not allowing for exports to neighboring countries. In addition, renewables developers have faced problems relating to land and planning due to a lack of transparency, uncertainty around ownership and red tape. Romania’s program for residential solar grants was officially launched in February 2019, but it took until September 2020 before a single installation was completed through the program. The administrative issues of the grant scheme have led to financial difficulties for several small-scale solar installers. Current political instability in the region may also hinder renewable energy developments.
Currency of PPAs
Are PPAs (eg. corporate PPAs and all other types) signed in or indexed to U.S. Dollars or Euro?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Fossil fuel price distortions - Subsidies
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?
Fossil fuel price distortions - Taxes
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes or carbon prices?
Electric vehicles, including plug-in hybrids, made up 7% of new sales in 2021, compared to just 1% in 2019 . The fleet of plug-in hybrid and battery electric passenger vehicles totaled less than 20,000 cars in 2021.
Romania targets 14% renewable energy in the transport sector’s final energy consumption in 2030, in line with EU-wide renewables targets. That is to be achieved mainly through electrification and some biofuel blending, according to the country’s energy and climate plan. The plan estimates that up to 700,000 plug-in hybrid and battery electric vehicles might be needed by 2030 to achieve the target, together with a total of 600,000 electric vehicle chargers.
Romania has a very generous grant scheme for EVs that runs from 2020 to 2025. The grant for battery electric vehicles reaches up to €4,450 (20,000 leu) and €1.100 (5,000 leu) for a plug-in hybrid. A subvention of €10,000 is granted for the purchase of a new EV to which 6,500 leu can be added for scrapping vehicles that are over eight years old. Funding covers a maximum of 50% from the value of the purchased car. Cars with CNG or LPG systems receive an increased eco-bonus of 1,500 leu. Romania applies EU fuel economy standards. These limit average emissions across a manufacturer's entire vehicle production. For passenger vehicles, these are 130 gCO2/km between 2012 and 2019, and 95 gCO2/km in 2020 and 2021. Both targets will be introduced gradually. In 2020, a manufacturer’s 5% most polluting cars are excluded, while in 2021, all vehicles sold are taken into account.
The government has yet to implement any substantive policy support in this sector.
Fuel economy standards
Does the country have a fuel economy standard in place?
Some 35% of residential buildings are heated with natural gas, while another third of homes are warmed with biomass. Around 15% of residential heat demand is provided by district heating in Romania. In the capital, Bucharest, district heat supplies two-thirds of the residents.
Energy efficiency policy
Does the country have a national energy efficiency plan?
Energy efficiency policy
Are there minimum energy performance standards for buildings?
Energy efficiency incentives
Is there access to loans or grants for energy efficiency measures (i.e. Wall or loft insulation or double glazing)?
Romania targets 33% renewable energy in heating/cooling final energy consumption in 2030. The country’s 2020 renewable energy target for the heating sector was 22%, in line with EU requirements. However, renewables already supplied 26% of heat in 2009 when the target was set and there has been no significant progress since. Romania adopted the EU directive on the energy performance of buildings in 2020, which sets minimum energy performance standards on new buildings and buildings undergoing major renovations.
Romania subsidizes energy efficiency improvements in buildings through its “Casa Verde” green homes scheme. Under the scheme, grants are available for residential heat pump installations as well as insulation improvements. The grant scheme has been running in various forms since 2010. The grant is for up to $16,000(70,000 leu), or 60% of the cost for installing a heat pump, together with other related efficiency upgrades, solar panel and EV charging installations. The subsidy available specifically for covering the cost of a heat pump is a maximum of 8,000 leu ($1,900), but the grant does not cover air-sourced heat pumps (reversible air conditioners).