Bankwatch slams Romania’s free EUA request

27 February 2012, Carbon Finance

NGO Bankwatch has criticised the national emissions plan submitted by Romania to the European Commission, claiming the east European country intends to use free emissions allowances from 2013 to invest “almost exclusively in fossil fuel facilities”.

In Phase III (2013-20) of the EU Emissions Trading System, EU allowances (EUAs) will no longer be granted for free to the majority of the power sector, but have to be bought at auctions or on the secondary market. But in order to help new member states with the costs of transitioning to a low-carbon electricity sector, those countries are exempted from this rule until 2019, and can apply to the Commission for free allowances, which Romania did last year.

The Romanian government applied for approximately 75 million free EUAs, but none of the investments the government intends to support are wind, hydro, solar or geothermal power plants.

Instead, it “proposes investments almost exclusively in fossil fuel facilities”, said Bankwatch, with 21 out of the 23 projects in the plan involving fossil fuels.

Coal facilities included in the plan would have an installed capacity of 2,000MW according to Bankwatch, representing 36% of the total new capacity proposed for support. “Romania is already producing more than 40% of its electricity from coal,” said the NGO.

“The Romanian government should have used this opportunity provided by the Commission to propose a national investment plan that truly contributes to greening our energy sector, but instead it has chosen to support the development of new fossil fuel power plants,” said Diana Popa, Bankwatch campaigner in Romania.

“When deciding whether to accept this national plan or not, the European Commission should reject prolonging Romania’s dependency on coal and instead provide strong guidance to the country to promote the renewables sector,” she added.

One of the investments proposed involves biomass, and one is a waste-to-energy investment, said Cristiana Ion, a senior advisor at the ministry of economy in Romania.

She added that the proposals in the national plan are favouring emissions reductions, arguing that support for natural gas represents a higher share of the total plan than investments in coal facilities.

“But we can’t [reduce emissions] only through renewables,” she said.