Romania: New coal plants to be built with EU aid for greening economy

Bucharest – One of the eight Member States applying for EU help consisting of free of charge GHG emissions allowances from 2013 to 2019, Romania intends to implement investments which will lead to maintaining or even increasing the high share of coal in the country’s electricity production, thus contradicting the goals of the EU aid scheme.

Under the EU Emissions Trading System (ETS) legislation [1], new member states will continue to be allowed to give out a limited number of free emissions allowances to domestic eligible power plants until 2019 in order to help these countries cope more easily with the high costs of transitioning to a low-carbon electricity sector. The free allowances are supposed to contribute to the de-carbonisation and diversification of the national electricity production systems.

An analysis published today by CEE Bankwatch Network and Greenpeace Romania [2] shows that, contrary to the goals of the EU ETS Directive for reducing greenhouse gas emissions, the Romanian national plan submitted in September 2011 to the European Commission proposes investments almost exclusively in fossil fuel facilities. Coal facilities alone would have an installed capacity of 2,000 MW, representing 36 percent of the total new capacity proposed for support [3]. Romania is already producing more than 40 percent of its electricity from coal. Out of the total number of 24 investments the Romanian government intends to support, only two [4] are not new fossil fuel capacities. Moreover, the national plan does not include a single wind, hydro, solar or geothermal power plant.

„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,” comments Bankwatch campaigner in Romania, Diana Popa. „When deciding over 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.”

The NGO analysis further points out that the Romanian proposed national plan favours three of the biggest national energy companies [5]. Furthermore, the elaboration of the national plan has been done without a Strategic Environmental Assessment of the expected impacts of this plan as well as without a proper engagement of the civil society and general public.

Notes for the editors

1. EU ETS is considered by the European Commission as one of the most important tools in the EU’s strategy to combat climate change and it is a system meant to gradually reduce the total emissions levels of the block using market mechanisms. In its third phase (2013-2020), emissions allowances can no longer be granted for free to power plants and these would have to instead purchase them through auctions or on the secondary market. Only new member states are exempted from this rule until 2019. Romania was one of eight new EU member states to apply to the European Commission for free allowances in September last year.

2. Link to online version of study: https://bankwatch.org/sites/default/files/ETS-Romania-21Feb2012.pdf

3. The Romanian government applied for approx. 75 million tonnes of free allowances in the value of 1.3 billion euros, which it intends to use for 36 installations operated by 31 companies.

4. A biomass cogeneration plant at CET Govora and the rehabilitation of the coal power plant at Turceni.

5. Rovinari CEN, CEN Craiova and Termoelectrica.

For more information, contact:

Diana Popa
Romanian campaigner, CEE Bankwatch Network
diana.popa at bankwatch.org