Creating a clean industry in Central and Eastern Europe: Recommendations for EU and National Governments

Energy Policy Group

-

January 9, 2025

Central and Eastern European (CEE) countries face numerous challenges in decarbonising their economies. Of these, the transformation of heavy industry is one of the most pressing: despite a progressive decline in the economic contribution of industry post-1990, CEE economies still rely more on their heavy industries than the EU average; these heavy industries remain more carbon-intensive than in other parts of the EU; and progress in decarbonising them remains slow due to inadequate climate policy frameworks and limited institutional capacity and national public funding, among others.

The opportunities for growing a clean industry in the CEE region are significant. Ample renewable energy resources, carbon dioxide storage potential, and available manufacturing capacities place the region in a good position to secure Europe’s supply of decarbonised industrial products, including primary and secondary steel, cement, and chemicals. Transforming heavy industry and kickstarting new value chains can both propel regional development, ensure industrial self-sufficiency, and make an important contribution to the EU’s emissions reduction and just transition goals. Such a transformation must always be informed by the goal to achieve cost-effective emissions reductions and should focus on developing clean industry across the EU, taking into consideration the comparative advantages offered by different geographies.

National and EU leaders must be proactive in developing clean industrial value chains in CEE. Countries in this region are challenged by narrow fiscal spaces, gaps in institutional capacity, ageing industrial facilities and potential social backlash to stringent climate policies. To overcome these challenges and leverage the potential of the CEE region, the EU’s new industrial policy must promote fair and cohesive support instruments based on a dual track of decarbonisation and development, including comprehensive workforce reskilling. A “two-speed Europe”, in which industrial (re)development is concentrated in Western countries simply due to higher economic power, must be avoided.

The EU can both use its existing support instruments and develop new ones to ensure this:

The upcoming Industrial Decarbonisation Accelerator Act must provide fair access to opportunities for industrial transformation across the EU and encourage a place-based approach to clean industrial development based on future competitive edge and wider potential benefits, including cohesion, rather than current economic resources and innovation track record.

Regional development funding must be maintained and linked to industrial decarbonisation, for example by introducing Green Public Procurement (GPP) criteria in Cohesion Funding, expanding the sectoral scope of territorial Just Transition planning to include deep industrial decarbonisation, and expanding the Connecting Europe Facility to deploy more infrastructure for transnational industrial decarbonisation projects.

The EU Public Procurement Directive must be revised to introduce lifecycle emissions and circularity criteria in public procurement, with harmonised implementation across the EU and alignment with other lead market creation policies. These must be balanced well against price criteria to offer effective protection of CEE industries against carbon leakage (particularly in EU border countries), reinforcing the safeguarding role of a (yet untested) Carbon Border Adjustment Mechanism.

The Innovation Fund must be redesigned to include early deployment of cost-effective industrial decarbonisation measures which are first-of-a-kind on a national level, ensuring coverage of countries with low innovation potential but significant deployment potential.

Strengthen national planning for industrial decarbonisation, leveraging the future revision of the EU Governance Regulation to ensure that Member States anticipate their infrastructure, energy, resource and market creation needs to enable a successful transformation and place industrial decarbonisation in their economy-wide transition to climate neutrality.

National governments in the CEE region must align with EU priorities and accelerate their industrial transformations through proactive policy developments:

Align national climate, industrial, and development policies to increase the efficiency of industrial transformation and deliver socially just climate and industrial policies, based on cross-party agreements to ensure political continuity. Seek to eliminate distortionary subsidy schemes which undermine incentives for improving industrial resource efficiency and emissions reductions.

Earmark EU ETS revenues for climate action, including clear and proportionate support for cost-effective industrial transformation through a mix of funding instruments, including direct grants, fiscal facilities and blended finance.

Provide long-term certainty for investors by guaranteeing carbon prices or input prices, for example through Carbon Contracts for Difference schemes to support operational costs, and creating lead markets for low-carbon steel and cement including through national Green Public Procurement policies and incentives for private uptake aligned with climate targets.

Conduct integrated infrastructure planning and engage in regional cooperation to ensure that energy and transport infrastructure (including electricity transmission and the transport of hydrogen and carbon dioxide) are deployed cost-effectively to support transformation across the region. Investigate the potential for infrastructure reuse, ensuring that it does not prolong the lifetime of fossil fuel assets.

Increase research and innovation spending, including leveraging the potential of digitalisation, to secure a competitive edge in emerging markets for net-zero technologies, which can both meet domestic demand and position the region as a key component of green industrial supply chains in Europe. Further leverage EU funding instruments, including InvestEU, to deploy low-carbon industrial processes and technologies at scale.

Download PDF

Successful CfD Auction Brings Optimism, But Industry Challenges Persist

Energy Policy Group

-

December 19, 2024

0

Successful CfD Auction Brings Optimism, But Industry Challenges Persist

Context

Romania adopted Government Decision No. 318/2024 in April 2024, introducing a Contracts for Difference (CfD) scheme to support low-carbon emissions technologies. Throughout the summer of 2024, ANRE set out the methodology for determining and collecting CfD contributions, and the Ministry of Energy approved the state aid scheme.

The first CfD auction has concluded and successfully procured the target c. 1.5 GW of installed capacity (1,096 MW for onshore wind and 432 MW for solar). Following the technical evaluation, 47 bids were eligible for financial evaluation with 21 applicants awarded contracts. Maximum prices were set at €78/MWh for solar and €82/MWh for onshore wind and a weighted average of the strike prices were €51/MWh for solar and €65/MWh for wind, representing good value for money. A second auction with 3.5 GW (1.5 GW for onshore wind and 2.0 GW for solar) is scheduled for the third quarter of 2025. Future auctions may include other technologies, such as offshore wind and nuclear.

A CfD contract will last for 15 years. The Modernisation Fund supports the scheme with €3 billion until 2030, after which the cost of maintaining it is to be passed onto the consumer bills. This guaranteed revenue stream over 15 years enables developers to secure financing by ensuring predictable payback periods and minimum returns on investment, protecting investors from market fluctuations.

CfDs are an important tool meant to shield select power generation technologies from market volatility and to provide long-term stability. Despite this successful first auction, though, the Romanian renewables sector is still proceeding with caution, as some language in the CfD contract is less comforting than it first appeared.

Industry concerns

Concerns over stability have been raised by some stakeholders, notably that the contract as written offers limited projection for power generators that are taking on more risk with the Romanian CfD than in CfD schemes in other states.

Reference price methodology

The draft methodology for setting the reference price has been viewed positively by industry, although the final methodology has yet to be released by the energy regulator. The reference price definition poses a risk to generators as ANRE reserves the right to revisit the methodology at any point if they consider that the reference price is not adequately reflecting market trends. However, how exactly ANRE is to (re)assess the situation is not clear. This is a surprising contractual clause considering that the reference price is based on the average day-ahead power market, which should be a straightforward market reading. EPG suggests that wording around adjusting the reference price methodology should at least be limited to a specific percentage point to allow electricity producers to model for the worst-case scenario when deciding on submitting a bid in future auction rounds.

Consumer Price Index

Concerns have been raised over the absence of cumulative Consumer Price Index (CPI) evolution. In theory, the CfD strike price should be adjusted every three years based on CPI; however, adjustment only applies if CPI increases more than 10%. Therefore, any inflation below 10% will not be adjusted for, leaving generators to deal with losses based on inflation of up to that threshold. Indeed, CPI-based adjustments are in line with the Eurozone Consumer Price Index, which is generally more conservative than the Romanian CPI. The long-term nature of CfDs means that real inflation could outstrip CfD payments and significantly impact returns. The unbalanced burden of managing inflation falling on the generator does not match the de-risking purpose of a CfD.

State unilateral exit

The state has the right to unilaterally terminate a CfD contract at its convenience, which many in industry find unacceptable and undermining the scheme’s very sense: to allow for a long-term, predictable revenue stream.

Under this clause, the generator is entitled to payments which theoretically should amount to what they would have received had the contract lasted to full fruition. As always, though, the devil is in the details and the methodology used for calculating the termination payment is not clear-cut. Based on the formulas outlined in the contract, the termination compensation should equate to the generator’s market loss based on the historical weighted average of CfD difference payments since the start date and metered output from the previous year, including a discount rate. However, the generator risks the state terminating the contract following a stable year before the market takes a turn, leaving the generator to carry the burden alone. If the market remains relatively stable, the termination amount would reasonably closely match what the generator should have received. In this situation, though, why would the government choose to exit the contract?

Besides, the reference price calculations will play a significant role in the level of termination fee paid to generators. If these values are transparent and fair, there is a scenario where the generator is fairly compensated, but a clause which allows one party to unilaterally terminate the contract without cause does not inspire confidence.

Regulatory aspects outside the generator’s control

The responsibility of achieving grid connection (ATR) falls on the electricity producer’s shoulders, with little recourse if decisions from the TSO are outside their control. At the auction stage, bidders must evidence the application for ATR. However, they are responsible for achieving ATR within six months of signing the CfD contract, and some bidders have justifiably expressed concerns over tight timelines, especially as decisions around grid connections are in the control of the TSO, while bidders have little control over the decision-making timelines.

The Government Ordinance 59/2013 stipulates that grid connection must be granted by the TSO within six months of application, but in practice it can take over a year. Generators therefore take a risk of not being granted connection agreements on time. The TSO’s ability to accommodate an influx of new grid connection agreements is known to be facing difficulties. If the TSO cannot come to a decision in the 6-month timeline, the CfD Counterpart is within their rights to enforce performance bonds on the bidder. Similarly, the process to obtain a building permit is not guaranteed and the risk of failure or delays may also affect the generator’s ability to see the project to fruition and incur significant penalties.

Nadia Maki, EPG Senior Researcher

Nadia Maki is a Senior Researcher within the Energy Systems Programme of EPG. She is an energy policy researcher focused on renewable energy financing, green technology and innovation and emerging economies.

Before joining EPG, Nadia worked as an independent evaluator for renewable energy financing schemes for the UK Department of Energy Security and Net Zero, evaluating schemes such as the Contracts for Difference scheme and the Capacity Market scheme. Nadia has extensive experience using theory-based evaluation methods. She has also contributed to projects for DG CLIMA, DG Environment, the Research Council of Norway, UN Women, the World Health Organization and ActionAid.

Nadia holds an MSc in Climate Change, Development and Policy from the Science Policy Research Unit and the Institute of Development Studies at the University of Sussex and a Bachelors of Arts degree from Queen’s University in Canada.

Contact: nadia.maki@epg-thinktank.org

Potențialul eolian offshore al României: politici pentru o dezvoltare durabilă

Energy Policy Group

-

December 17, 2024

0

Potențialul eolian offshore al României: politici pentru o dezvoltare durabilă

Energia eoliană offshore deține un rol important în procesul de decarbonizare al Uniunii Europene (UE). Cu un potențial semnificativ în Marea Neagră, România are oportunitatea de a deveni un lider regional, în special în contextul adoptării Legii privind energia eoliană offshore.

Uniunea Europeană vizează o capacitate instalată în energia eoliană de 60 GW până în 2030 și 300 GW până în 2050. România, cu un potențial eolian de 76-94 GW în Marea Neagră, ar putea deveni un lider regional în acest domeniu.
Adoptarea Legii privind energia eoliană offshore de către România în 2024 (Legea nr. 121/2024) reprezintă un pas important în dezvoltarea sectorului de energie eoliană offshore. Cu toate acestea, cadrul de reglementare încă prezintă aspecte care trebuie abordate. O problemă importantă este termenul pentru acțiunile prevăzute de lege, cum ar fi disponibilitatea publică a informațiilor privind termenii de referință pentru studiul de specialitate, care ar fi trebuit să fie aprobați până în septembrie 2024. De asemenea, lipsa unui obiectiv juridic privind ținta de capacități instalate este o preocupare, deoarece ar ajuta la respectarea termenelor pentru legislația secundară și ar oferi o mai mare claritate investitorilor. Simplificarea procesului de autorizare este, de asemenea, esențială.
Dezvoltarea energiei eoliene offshore în Marea Neagră trebuie să prioritizeze protecția mediului, având în vedere caracteristicile specifice ale regiunii și riscurile pentru biodiversitate. Studiile de mediu locale sunt esențiale pentru înțelegerea și atenuarea riscurilor pe care le prezintă construcția și exploatarea centralelor eoliene offshore.
România a adoptat Planul de Amenajare a Spațiului Maritim în noiembrie 2023, marcând un pas important în alinierea activităților maritime la dezvoltarea durabilă. Cu toate acestea, Planul se confruntă cu provocări, inclusiv implicarea insuficientă a părților interesate în timpul elaborării sale, ceea ce a condus la contribuții limitate din partea unor factori relevanți din sectoare precum pescuitul, turismul, dar și autoritățile locale. Revizuirile vor trebui să se bazeze pe consultări mai ample.
Infrastructura, constând atât în cea privind transportul și distribuția electricității produse de centralele eoliene offshore, cât și în cea portuară sunt esențiale pentru dezvoltarea acestui sector. Producția viitoare de energie electrică din capacități eoliene offshore, onshore și cele în energie nucleară necesită accelerarea consolidării rețelei de transport și a investiților în liniile HVDC pentru a asigura evacuarea acesteia. Portul Constanța, deși parțial echipat, trebuie modernizat pentru a face față depozitării, asamblării și transportului componentelor centralelor eoliene offshore într-un scenariu menit să promoveze o creștere rapidă și un volum mai mare de capacități instalate. De asemenea, deficitul de nave de instalare, la nivel global și lipsa capacității de construcție a acestora la nivel național necesită soluții inovative, precum Acordurile Sectoriale inspirate din Regatul Unit și Polonia.

Citiți întreg studiul (ENG) redactat de Mihai Constantin, Ciel Bovary și Alina Arsani AICI.

Romania’s Offshore Wind Potential: Policy Pathways for Sustainable Development

Energy Policy Group

-

December 17, 2024

0

Romania’s Offshore Wind Potential: Policy Pathways for Sustainable Development

Offshore wind energy is a crucial element of the European Union’s decarbonisation plan. With substantial untapped potential in the Black Sea, Romania has the opportunity to become a regional leader, particularly following the adoption of its Offshore Wind Law in 2024.

Offshore wind energy has emerged as a pillar of the EU’s decarbonisation policy. The EU is aiming for 60 GW of offshore wind capacity by 2030 and 300 GW by 2050. Romania, with significant untapped technical wind potential in the Black Sea estimated between 76-94 GW, could become a regional leader in offshore wind development.

Romania’s adoption of the Offshore Wind Law in 2024 (Law No. 121/2024) is a major step forward in developing its offshore wind sector. However, there are still gaps that need addressing. A key issue is the timeline for actions outlined in the law, such as the public availability of information on the terms of reference for the Expert Study, which was supposed to be approved by September 2024. Additionally, the lack of a legally binding target is a concern, as it would help enforce timelines for secondary legislation and provide greater clarity to investors. Simplifying the permitting process is also crucial, given that developers must currently obtain approvals from multiple authorities.
Offshore wind development in the Black Sea should prioritise environmental protection, given the basin’s unique characteristics and biodiversity risks. The enclosed nature of the sea, with limited water exchange and anoxic deep layers, makes it particularly sensitive to disturbances. Localised environmental studies are essential for understanding and mitigating the risks posed by offshore wind construction and operation. Lessons from Romania’s onshore wind projects and international offshore wind development can further guide environmentally responsible practices.
Romania adopted its Maritime Spatial Plan in November 2023, marking a step forward in aligning maritime activities with sustainable development. However, the MSP faces challenges, including insufficient stakeholder engagement during its development, which resulted in limited input from sectors such as fisheries, tourism, and local authorities.
Romania’s infrastructure and supply chain readiness are key to unlocking its offshore wind potential, but gaps remain. Future production from offshore wind, onshore wind, and new nuclear capacities will need accelerated grid reinforcements and new HVDC lines, to ensure the evacuation of electricity. The Port of Constanța, while partially equipped, needs an upgrade to handle the storage, assembly, and transport of offshore wind components in a scenario intended to promote rapid growth and a higher volume of installed capacities. A global shortage of installation vessels presents another bottleneck, exacerbated by Romania’s lack of domestic shipbuilding capacity following the Damen Mangalia shipyard’s insolvency. To address these challenges, Romania could adopt Sector Deals modelled on the UK and Poland examples.

This paper was written as part of the project BLUECEE – Strengthening Policy and Governance Capacity for Blue Energy in Central and Eastern Europe. The project is part of the European Climate Initiative (EUKI) of the German Federal Ministry for Economic Affairs and Climate Action (BMWK). The opinions put forward in this report are the sole responsibility of the authors and do not necessarily reflect the views of the Federal Ministry for Economic Affairs and Climate Action (BMWK).

Mihai Constantin, EPG Researcher

Mihai Constantin is a Researcher at the Energy Policy Group, where he focuses on energy policies on topics such renewable energy and decarbonisation policies. As part of the Energy Systems Department he has contributed to a series of reports and policy papers addressing topics such as offshore wind development, solar energy potential, coal phase-out etc. At the same time, he engaged in advocacy activities with different stakeholders in order to promote the collaboration between public authorities, industry, and civil society on topics such as the development of offshore wind (through the Black Sea Renewable Coalition) or designating acceleration areas for renewable energy.

Mihai has a Master Degree in European Economics at Bucharest University of Economic Studies.

He has expertise on public policies in the fields of energy, climate change and economics. He also occupies a position of Senior Energy Expert at the World Bank. Before joining EPG, he worked for WWF Romania as Climate & Energy Manager and as Advisor on Public Policies in the Romanian Parliament.

Contact: mihai.constantin@epg-thinktank.org

Leveraging the EU Cohesion Policy for a Clean Industrial Revival

Energy Policy Group

-

December 11, 2024

0

Leveraging the EU Cohesion Policy for a Clean Industrial Revival

Heavy industry, an engine for development

The EU’s heavy industry is under enormous pressure. Across the continent, producers of steel, cement, chemicals, and other essential materials are announcing expensive transformation plans to maintain their competitiveness in a low-carbon world, while struggling to compete with cheap imports and to overcome the current sluggish demand for green products.

Said transformation plans are often dependent on state-led infrastructure development – both for enabling their execution (such as carbon dioxide transport infrastructure for carbon management projects) and for creating lead markets to increase the certainty of investment payback (for example, long-term contracts for purchasing green steel at a premium price tag). They are also costly, both in terms of capital and operational expenses, and will require innovative financial and fiscal instruments, including private sector mobilisation, to ensure deployment at the pace required to keep EU industries operating and competing within emissions and resource constraints.

In Central and Eastern Europe (CEE), heavy industry is both more emissions-intensive and more economically important than in the rest of the Union. Transforming it to a low-carbon industry could bring a significant payoff in terms of economic development and safeguarding of jobs than in other countries. The demand for carbon-intensive products is also unquestionable, with the rapid economic development of CEE countries requiring large volumes of construction materials. However, the CEE countries’ climate policy push is also weaker, public purses are more constrained, and the recent fomenting of far-right agendas may put social “green-lash” high on the list of challenges facing industrial transformation. Under stringent EU climate targets, CEE border countries such as Romania and Bulgaria also face a higher risk of incurring an industrial trade deficit due to their proximity to cheap extra-EU industrial production – even in regional markets judged to have low trade intensity (such as cement). Transforming CEE industry is therefore as challenging as it is necessary – and its dependence on both infrastructure development and creative funding mechanisms, outlined above, may just be the key to achieving it.

The Cohesion Policy, a facilitator of development

The progress of CEE countries in reducing their industrial emissions over the last three decades has been mostly driven by downsizing or shutting down legacy economically inefficient industrial facilities from the communist regime. As in the rest of Europe, concerns about competitiveness are reshaping the decarbonisation agenda to a dual “joint decarbonisation and development” approach. For Central and Eastern Europe, this notion of development is still very much predicated (though likely not for much longer) on regional convergence with wealthier EU regions. This offers an opening into combining the economic development imperative with the need to mobilise finance for industrial decarbonisation in a way that can foster regional economic cohesion: the EU Cohesion Policy.

The EU Cohesion Policy, the “prime investment policy of the EU” is a broad funding mechanism aiming to reduce the economic, social, and territorial disparities still evident between more developed and less developed European countries. It is delivered through four main funds: the European Regional Development Fund (ERDF), the Cohesion Fund (CF), the European Social Fund Plus (ESF+), and Just Transition Fund (JTF). The majority of this funding is allocated to CEE countries: of a total of €392 billion in the 2021-2027 financial period, Poland alone was allocated nearly €80 billion, and remaining CEE countries and Greece a total of €150 billion.

A substantial share of Cohesion Policy funding goes towards infrastructure, particularly transport. In the 2014-2020 period, the single largest direct beneficiaries of funding were the Polish and Romanian national companies for roads and highways, receiving just over €13 billion. Total funding for network infrastructures in transport and energy amounted to €66 billion, while funding for low-carbon transformation totalled €50 billion, out of a total of €531 billion planned. The primary funding instruments for investment in these domains are the CF and ERDF.

The substantial share of Cohesion Policy funding available for investment in CEE infrastructure and low-carbon transformation highlights two things. Firstly, there is a well-established funding instrument for the economic development of less developed European regions, much of which goes to large construction projects requiring substantial volumes of steel, concrete, and other construction products. Secondly, there is an opportunity to improve the efficiency of Cohesion Policy funding (already a heated topic in Brussels), by conditioning infrastructure spending on climate performance and mobilising investments in low-carbon products and services as part of a broad industrial transformation.

Aligning development with climate through public procurement criteria

How could climate conditionalities be implemented within Cohesion Policy infrastructure spending? One solution is to leverage the role of public entities as buyers of the products and services needed to develop new infrastructure. With the vast majority of CEE countries directing most of their funding to public entities, public procurement criteria applied to Cohesion Policy spending could unlock demand for industrial products meeting certain specifications – including their environmental and climate impact, with strong social safeguards in place.

Incorporating climate and environmental criteria into public procurement is far from a new idea, but is not legally mandated at EU level. Instead, the EU has a voluntary scheme for Green Public Procurement (GPP), covering fourteen categories of products – two of which are suitable for generating demand for clean industrial products to the scale required for a genuine transformation of heavy industry (office building construction and road construction). While some Member States have adopted their own Green Public Procurement frameworks at national level, these are mostly absent in Central and Eastern Europe (with some exceptions, for example Lithuania), or where they do exist, they include relatively vague criteria on the emissions and environmental performance of industrial products (e.g., Romania’s recently published GPP action plan).

Leveraging the existing framework for GPP criteria could serve as a starting point for introducing climate conditionalities in the disbursement of Cohesion Policy funding instruments. This means that Member States, who are responsible for selecting projects to be funded under these instruments, can introduce product-level or project-level criteria into their funding contracts, ensuring that beneficiaries (public and private alike) implement such criteria to reduce the life-cycle emissions of infrastructure projects and generate demand for low-carbon industrial products. Of course, much will need to be done to set clear criteria which genuinely incentivise industrial transformation, ensure transparency across the value chains of these complex infrastructure projects, as well as educate procurement bodies to implement, monitor, and evaluate performance against GPP criteria.

Luciana Miu, EPG Head of Clean Economy

Luciana Miu is Head of Clean Economy at Energy Policy Group. She oversees the work of the Clean Economy division, including industrial decarbonisation, building energy efficiency, and climate governance and policy. Luciana also conducts in-depth research and stakeholder engagement primarily in the field of industrial decarbonisation and carbon capture and storage.

Luciana is an expert in industrial decarbonisation and building energy efficiency, with a focus on consumer behavior, systems thinking and policy. She is also trained in renewable energy engineering and a highly skilled communicator with significant experience in stakeholder engagement on sustainability projects. Luciana has extensive experience in data collection and analysis, including conducting nationally representative surveys and statistical analysis and modelling in STATA. She is also well-versed in behavioral frameworks and socio-technical systems approaches to sustainability.

She holds a PhD in energy efficiency from Imperial College London, and an MSc in Sustainable Energy Systems and BSc in Environmental Science from the University of Edinburgh. Her PhD thesis has resulted in 3 publications in peer-reviewed journals, including Energy Policy and Energy Research and Social Science.

Luciana is passionate about youth engagement in the energy transition, and is one of the founders of the European Youth Energy Network, the first network of youth-led, energy-focused organisations in the EU. She is a native speaker of Romanian and English, is fluent in French and has basic knowledge of German and Danish.

Contact: luciana.miu@epg-thinktank.org

Decarbonizarea producției de ciment și var din România: pași esențiali pentru atingerea neutralității climatice

Energy Policy Group

-

November 28, 2024

0

Decarbonizarea producției de ciment și var din România: pași esențiali pentru atingerea neutralității climatice

În contextul politicilor climatice ambițioase asumate la nivel european, următorii 10 ani sunt decisivi pentru transformarea profundă a industriilor de ciment și var, astfel încât să rămână competitive într-o economie cu emisii reduse.

În prezent, aceste sectoare energo-intensive din România beneficiază de suport și finanțare limitată în procesul de decarbonizare, spre deosebire de situația acestora în state precum Bulgaria sau Polonia, unde proiecte de captare și stocare a carbonului – vitale pentru decarbonizarea deplină a acestor industrii – se află deja în fază de implementare.

Cu toate acestea, industriile de var și ciment vor continua să joace un rol important în dezvoltarea țării, ținând cont de investițiile planificate de România pentru următorii zece ani atât în infrastructură, cât și în construcții.

Având în vedere că aceste sectoare se confruntă cu provocări unice în procesul de reducere a emisiilor de carbon, este important ca guvernul și industria, în egală măsură, să dea dovadă de implicare și angajament deplin în implementarea celor mai bune soluții disponibile pentru atingerea neutralității climatice.

Potrivit experților EPG, pentru a susține, în următoarea decadă, planurile complexe de transformare durabilă ale producătorilor de ciment și var, dar și pentru a menține facilitățile de producție ale acestora în România este esențial ca autoritățile competente să implementeze, printre altele, următoarele recomandări:

Extinderea capacităților de energie regenerabilă: Pe măsură ce aceste industrii se vor decarboniza, cererea de energie este proiectată să crească, cu precădere, datorită înlocuirii combustibililor fosili și implementării tehnologiilor de captare a carbonului. În acest context, vor fi necesare cantități semnificative de energie cu emisii reduse, precum și capacități suplimentare de energie regenerabilă, astfel încât să fie susținut nu doar consumul propriu al industriei, ci și alimentarea rețelei naționale de energie electrică.
Accelerarea procesului de dezvoltare a infrastructurii de transport și stocare a CO₂: Barierele legislative și lipsa de ambiție în dezvoltarea tehnologiilor CCS/CCUS trebuie redresate cât mai curând, iar autoritățile publice este recomandat să accelereze procesul de reglementare și implementare a soluțiilor CCS.
Consolidarea dialogului între industriile de ciment și var și producătorii de hidrocarburi: Potențialul semnificativ al României pentru stocarea geologică a CO₂, precum și obligația de captare și stocare a 9 Mt de CO₂ anual până în 2030, așa cum reiese din Regulamentul privind Industria Zero Net, scoate în evidență nevoia pentru dialog și cooperare între companiile care dețin zăcăminte epuizate de petrol și gaze și industriile care depind de tehnologia CCS (ex. industriile de ciment, var, fertilizanți și rafinare). Dialogul este esențial, cu precădere, în contextul discuțiilor privind adoptarea Strategiei Naționale privind Gestionarea Carbonului.
Accelerarea investițiilor private și lansarea fondurilor publice: CCS este o tehnologie costisitoare, însă necesară pentru reducerea emisiilor de proces în aceste industrii. Mobilizarea finanțării private și a fondurilor publice este, prin urmare, esențială pentru inițierea investițiilor masive în decarbonizare.
Dezvoltarea unor mecanisme de finanțare complementare: Suplimentar față de lansarea obligațiunilor verzi pentru atragerea de finanțare, este important ca noi mecanisme, cum ar fi Contractele pentru Diferență de Carbon să fie dezvoltate. Acestea asigură operatorilor industriali un preț stabil al carbonului, prin încheierea unui contract între operator și guvern, și pot sprijini financiar costurile operaționale asociate reducerii emisiilor.
Adoptarea unui Plan de Achiziții Publice Ecologice ambițios, dar fezabil pentru materialele de construcții: Implementarea unui sistem de APEbine definit și ambițios reprezintă un instrument complementar care, indirect, poate compensa costurile de decarbonizare și stimula crearea unei piețe pentru materialele de construcții verzi, cum ar fi cimentul sau varul.

Citiți întreg studiul (ENG) redactat de Sabina Strîmbovschi, Luciana Miu, Mihnea Cătuți și Corina Lazăr, AICI.

High-Level Roadmap for Decarbonising Cement and Lime Production in Romania

Energy Policy Group

-

November 28, 2024

0

High-Level Roadmap for Decarbonising Cement and Lime Production in Romania

With stricter climate rules, industries that emit a lot of carbon face tighter deadlines to reduce emissions. To stay competitive, the cement and lime sectors must adopt new strategies and invest in low-carbon technologies. These changes will be costly and complex. While Romania lags behind other countries like Bulgaria and Poland in carbon capture projects, cement and lime will still be vital for Romania’s growth. This is due to the country’s planned infrastructure projects, such as new roads and buildings by 2030.

Recommendations for the Next 5-10 Years

To succeed, industries and the government must commit to using the best methods for cutting emissions. Here are key steps for the next 5 to 10 years:

Deploy new renewable energy capacities: As the sector moves towards decarbonisation, energy demand is expected to rise, particularly due to carbon capture. Ensuring that this additional energy demand is clean will require substantial amounts of low-carbon energy and additional capacities to support both self-consumption and reducing the carbon intensity of Romania’s grid electricity supply.
Accelerate CO₂ transport and storage infrastructure development: Given the existing regulatory and permitting barriers and limited ambition for advancing CCS/CCUS technologies that have hindered progress on CO₂ transport and storage infrastructure, public authorities must strengthen their commitment to advancing CCS solutions.
Strengthen the cooperation between the cement and lime industries and hydrocarbon producers: Romania’s significant potential for geological CO₂ storage capacities and its obligation to capture and store 9 Mt of CO₂ annually until 2030, as outlined in the NZIA, requires an accelerated dialogue between the owners of depleted gas and oil fields and industries that will rely heavily on CCS (such as the production of cement, lime, fertilisers and oil refining). The dialogue is particularly relevant given the discussions around the adoption of a National Carbon Management Strategy.
Speed up investments and the disbursement of public funding: CCS is a costly yet essential technology for decarbonising the cement and lime sectors. Both the disbursement of funds and private financing are essential for kickstarting deep decarbonisation investments.
Design complementary funding mechanisms: In addition to issuing green bonds to raise funding, it is important to design new financial mechanisms such as Carbon Contracts for Difference, a flexible funding mechanism offering industrial operators a stable carbon price through a contract between the operator and the government. This can help finance operational costs based on actual emissions reductions.
Adopt a clear, ambitious yet feasible Green Public Procurement Plan for construction products: Implementing a well-designed and ambitious GPP system is a complementary tool that can indirectly compensate decarbonisation costs and stimulate market creation for low-carbon cement, lime and other construction materials.

In conclusion

In conclusion, the pace and effectiveness of the cement and lime industries’ transition toward decarbonisation depend not only on the companies’ investment plans but also on robust policy support.

Sabina Strîmbovschi, EPG Senior Researcher

Sabina works as a Senior Researcher in industrial decarbonisation within the Clean Economy Programme of EPG. She holds a PhD in Political Science (International Relations) from the National University of Political Studies and Public Administration (SNSPA, Bucharest). Before joining EPG, Sabina worked for one of the largest business support organizations in Romania, where she coordinated the activities of the European and international organizations office.

Over the last few years, she has been involved in two volunteer organizations. She served as an affiliated expert and board member at one of the most important think-tanks on European Affairs in Romania – the Center of European Expertise (Europuls). She is also a member of Future Energy Leaders Romania – the youth program of the Romanian National Committee of the World Energy Council.

Contact: sabina.strimbovschi@epg-thinktank.org

Planul Social pentru Climă în România: o punte între politicile climatice, energetice și sociale

Energy Policy Group

-

November 13, 2024

0

Planul Social pentru Climă în România: o punte între politicile climatice, energetice și sociale

Fondul Social pentru Climă (FSC) se dorește a fi un instrument care sporește eficiența și atenuează impactul asupra bunăstării ca efect al extinderii tarifării emisiilor de carbon în sectoarele clădirilor și al transportului rutier prin introducerea sistemului de comercializare a certificatelor de emisii (ETS2). FSC va ajuta gospodăriile vulnerabile și utilizatorii de mijloace de transport să reacționeze la creșterea prețurilor la combustibilii fosili prin facilitarea investițiilor în soluții cu emisii reduse de carbon. Acesta poate oferi, de asemenea, un sprijin direct temporar al veniturilor pentru a acoperi impactul inițial asupra grupurilor vulnerabile până când investițiile pe termen lung își produc efectele, dar acesta nu este principalul mecanism de sprijin.

Important este ca intervențiile FSC să abordeze în primul rând potențialul impact legat de introducerea ETS2. Această limitare a domeniului de aplicare, precum și cea a bugetului, înseamnă că acest instrument nu poate aborda problemele generale de sărăcie energetică ale unei țări. Cu toate acestea, veniturile suplimentare din ETS2 (sau alte surse de finanțare) pot fi utilizate în mod semnificativ pentru atingerea unor obiective similare în afara domeniului de aplicare direct al FSC, inclusiv prin mecanisme de finanțare complementare.

În România, cea mai mare incidență a ETS2 va fi limitată la minoritatea gospodăriilor conectate la rețeaua de gaze naturale, care se află în general în afara celor mai mici categorii de venituri. Pentru o gospodărie cu un consum mediu lunar de gaze naturale de 100 de metri cubi, un preț al carbonului de 45 EUR/t are un impact lunar de aproximativ 8,2 EUR/lună.

Deși nu intră direct în domeniul de aplicare al FSC, se preconizează că numeroasele gospodării rurale care utilizează biomasa lemnoasă pentru încălzire, deși nu sunt afectate în mod direct de ETS2, vor face tranziția către surse de încălzire mai convenabile – furnizarea de ajutor pentru ca acestea să treacă la soluții cu emisii reduse reprezintă o oportunitate. În zonele urbane, în ciuda declinului recent, încălzirea centralizată rămâne o opțiune relevantă care ar putea fi facilitată de FSC.

Impactul va fi mai răspândit în rândul utilizatorilor din sectorul transporturilor, unde combustibilii fosili reglementați de ETS2 domină mixul de combustibili. Pentru un preț al carbonului de 45 EUR/t, creșterea simulată a prețului este de 0,12 EUR pe litru de motorină și de 0,10 EUR pe litru de benzină. Îmbunătățirea accesului, a calității și a performanțelor în materie de emisii ale transportului public și accesul la vehicule cu emisii reduse sunt opțiuni viabile pentru punerea în aplicare a FSC.

În ansamblu, conformitatea cu FSC va necesita eforturi semnificative, colectarea de date, cartografierea programelor existente și justificări pentru măsuri și investiții suplimentare, precum și etape și obiective credibile. Cu toate acestea, acest proces vine, de asemenea, cu oportunități semnificative.

Recomandări pentru decidenții din România

Să profite de oportunitățile oferite de FSC pentru a aborda sărăcia energetică (și din perspectiva transporturilor) mai sistematic în România. Efortul necesar pentru colectarea datelor și conceperea PSC va fi substanțial și, cu ajutorul FSC sau al altor programe de asistență tehnică și de consolidare a capacităților finanțate de UE, ar putea fi utilizat în mod optim prin regândirea interacțiunilor dintre politicile climatice, energetice și sociale, prin colectarea și gestionarea mai multor date, reducerea erorii de excludere și abordarea surselor multiple și concomitente de vulnerabilitate.
Să conceapă măsurile din PSC în sinergie cu alte instrumente de finanțare, existente sau potențiale. Există multe interacțiuni posibile între FSC și PNRR, Programul Regional, Programul de Dezvoltare Durabilă, Programul pentru Tranziție Justă și Administrația Fondului de Mediu. Atunci când intervențiile necesare nu se încadrează în domeniul de aplicare sau în bugetul FSC, acestea pot fi completate prin intermediul altor fonduri.
Să permită o consultare cuprinzătoare și semnificativă pentru a se asigura că măsurile și investițiile sunt adaptate corect la nevoile grupurilor vulnerabile și sunt concepute într-o manieră incluzivă cu beneficiarii și autoritățile locale.

Ana-Maria Niculicea, EPG Researcher

Ana-Maria Niculicea is a Researcher at Energy Policy Group, in the Clean Economy programme. She coordinates research activities on climate governance with a focus on enhancing national climate governance and the social acceptance of the transition to a low carbon economy. Additionally, she conducts research on social acceptance of CCUS technologies in the Horizon2020 ConsenCUS project.

She holds a MSc in Politics, Economics and Philosophy from University of Hamburg and a bachelor’s degree in Political Science from National University of Political Studies and Public Administration.

Contact: ana.niculicea@epg-thinktank.org

The Social Climate Plan in Romania: bridging climate, energy and social policy

Energy Policy Group

-

November 13, 2024

0

The Social Climate Plan in Romania: bridging climate, energy and social policy

The Social Climate Fund (SCF) is meant to be a tool that increases the effectiveness and mitigates the welfare impact of the expansion of carbon pricing to buildings and road transport through the introduction of the Emissions Trading System 2 (ETS2). The SCF will help vulnerable households and transport users respond to higher fossil fuel prices by enabling investments into low-carbon solutions. It can also provide temporary direct income support to cover the initial impacts on vulnerable groups until the long-lasting investments take effect, but this is not the main support mechanism.

Importantly, the SCF interventions need to primarily address potential impacts related to the introduction of ETS2. This limitation of scope, as well as that of budget, mean that this instrument cannot address the overall energy poverty problems of a country. However, additional ETS2 revenues (or other funding sources) can be used meaningfully toward similar aims outside the direct scope of SCF, including through complementary financing mechanisms.

In Romania, the highest incidence of ETS2 will be limited to the minority of households connected to the natural gas grid, who are generally outside the lowest income brackets. For a household with an average monthly consumption of natural gas of 100 cubic meters, a carbon price of 45€/t results in a monthly impact of around €8.2/month.

While outside the direct scope of the SCF, the numerous rural households who use woody biomass for heating, while not directly affected by ETS2, are expected to transition to more convenient heating sources – providing help for them to leapfrog to low-emissions solutions represents an opportunity. In urban areas, despite the recent decline, district heating remains a relevant option that could be enabled by the SCF.

The impact will be more widespread on transport users, where fossil fuels covered by ETS2 dominate the fuel mix. For a carbon price of 45€/t, the simulated price increase is 0.12€ per liter of diesel and 0.10€ pe liter of gasoline. Improving access, quality and emissions performance of public transport and access to low-emissions vehicles are viable options for the implementation of the SCF.

All in all, compliance with the SCF will require significant efforts, data collection, mapping of existing programmes, and justifications for additional measures and investments, as well as credible milestones and targets. However, this process also comes with significant opportunities.

Recommendations for Romanian decision makers

Seize the opportunity of the SCF to tackle energy (and transport) poverty more systematically in Romania. The effort needed for collecting data and designing the SCPs will be substantial and could, with the help of SCF or other EU-funded technical assistance and capacity building programmes, be used optimally by rethinking the climate-energy-social policy interactions, by acquiring and managing more data, reducing the exclusion error, and tackling the multiple and concurring sources of vulnerability.
Design SCP interventions in synergy with other funding instruments, either existing or potential. There are many possible interactions between SCF and the NRRP, Regional Programme, Sustainable Development Programme, the Just Transition Programme, and the Environmental Fund Administration. When needed interventions do not fit within the scope or budget of the SCF, they can be complemented through other funds.
Enable wide and meaningful consultation to ensure the measures and investments are correctly tailored to the needs of vulnerable groups and are designed in an inclusive manner with beneficiaries and local authorities.

Ana-Maria Niculicea, EPG Researcher

Ana-Maria Niculicea is a Researcher at Energy Policy Group, in the Clean Economy programme. She coordinates research activities on climate governance with a focus on enhancing national climate governance and the social acceptance of the transition to a low carbon economy. Additionally, she conducts research on social acceptance of CCUS technologies in the Horizon2020 ConsenCUS project.

She holds a MSc in Politics, Economics and Philosophy from University of Hamburg and a bachelor’s degree in Political Science from National University of Political Studies and Public Administration.

Contact: ana.niculicea@epg-thinktank.org

Varianta finală a Planului Național Integrat în domeniul Energiei și Schimbărilor Climatice: obiective mai ambițioase dar lipsite de traiectorii clare.

Energy Policy Group

-

November 6, 2024

0

Ministerul Energiei a transmis recent Comisiei Europene versiunea finală a Planului Național Integrat în domeniul Energiei și Schimbărilor Climatice (PNIESC), documentul-cadru prin care România își stabilește obiectivele și măsurile pentru decarbonizare, aliniate cu țintele europene pentru 2030 și cu angajamentul de a atinge neutralitatea climatică până în 2050.

Publicat pentru prima oară pentru consultare la finalul anului 2018, proiectul Planului a trecut printr-o lungă serie de modificări până la varianta finală.

În ultimii ani, experții EPG au participat la consultările organizate de Ministerul Energiei privind acest document cu o deosebită importanță strategică și au comunicat necesitatea unei serii de ajustări, astfel încât planul să fie aliniat obiectivelor europene cât și altor strategii relevante ale României. Versiunea actualizată a PNIESC propune ținte mai ambițioase pentru creșterea ponderii energiei regenerabile până în 2030, reflectând o mai mare determinare în direcția decarbonizării economiei și a sectorului energetic.

Cu toate acestea, versiunea finală a Planului prezintă încă unele ambiguități ce vor necesita clarificări prin strategii viitoare. Printre prioritățile menționate de experții EPG se regăsesc dezvoltarea producției de hidrogen regenerabil, extinderea infrastructurii de transport și stocare, cât și dezvoltarea infrastructurii necesare pentru captarea și stocarea carbonului. Ministerul Energiei are responsabilitatea de a aborda aceste aspecte esențiale pentru a asigura României un cadru complet și durabil în tranziția către o economie cu zero emisii nete.

Citate

Radu Dudău – EPG Co-founder & President:

“Noul PNIESC, publicat de Ministerul Energiei, în formă actualizată, în octombrie 2024, reprezintă un remarcabil pas înainte în asumarea de către Guvernul României a unor ținte mai ambițioase în tranziția către un sistem energetic eficient, rezilient și cu emisii scăzute de gaze cu efect de seră.

Printre elementele notabile de progres se numără ținta pentru surse regenerabile de energie de 38,4% în 2030 din consumul total final de energie la nivel național (față de doar 30,7% în planul din 2021); stabilirea unui obiectiv de reducere a emisiilor din sectoarele guvernate de ESR (Effort Sharing Regulation, adică transporturi, clădiri, agricultură, mică industrie și deșeuri) de -12,7% până în 2030 (față de ținta precedentă de doar -2%, stabilită în 2018); și asumarea unui obiectiv de decarbonizare a economiei mai ambițios decât în Strategia pe termen lung de reducere a emisiilor de gaze cu efect de seră (STL): 96% în 2040 și 105% în 2050 față de nivelul de emisii al anului 1990.

Astfel, alături de STL și de recent-publicata Strategie Energetică Națională, PNIESC articulează un parcurs mai ambițios și mai coerent al sectorului energetic românesc, mai bine aliniat la comandamentele Pactului Verde European. Pe de altă parte, o serie de politici și măsuri pentru realizarea obiectivelor PNIESC sunt încă lipsite de substanța necesară, astfel că Planul rămâne, parțial, un document de intenții a căror realizare va trebui să fie determinată pe parcurs.”

Luciana Miu – EPG Head of Clean Economy:

“Noua versiune a PNIESC este considerabil mai ambițioasă decât varianta inițială din 2023, vizând o reducere a emisiilor cu 96% până în 2040 și atingerea de emisii nete negative în 2050, în principal prin intermediul rezervoarelor naturale de carbon, precum pădurile. În ciuda ambițiilor crescute, dependența PNIESC de absorbțiile naturale de carbon are limite, mai ales fiindcă este bazată pe o revizuire a modului de raportare, mai degrabă decât pe o dezvoltare sporită a absorbțiilor. În plus, incertitudinile legate de impactul schimbărilor climatice asupra potențialului de absorbție al pădurilor nu sunt neglijabile.

Pe de altă parte, PNIESC intensifică măsurile de decarbonizare pe termen scurt, stabilind obiective ambițioase pentru clădiri, industrie și transporturi. Se propun mai multe măsuri de sprijin financiar, inclusiv extinderea achizițiilor publice ecologice, stimulente pentru decarbonizarea industriei și angajamente pentru noi strategii de gestionare a carbonului. Sunt incluse măsuri specifice pentru atenuarea sărăciei energetice, ceea ce face ca planul să fie mai robust în ceea ce privește sprijinirea unei tranziții echitabile din punct de vedere social. Cu toate acestea, persistă discrepanțe substanțiale, în special în ceea ce privește obiectivele sectoriale specifice, infrastructura pentru captarea carbonului și planurile detaliate pentru hidrogenul regenerabil.

În ansamblu, PNIESC consolidează planificarea în domeniul climei, însă rămân lacune critice în ceea ce privește dezvoltarea infrastructurii, prioritizarea resurselor regenerabile și planurile socioeconomice pe termen lung. Atingerea reducerii de 96% până în 2040 va necesita investiții substanțiale, planificare strategică și acțiuni imediate pentru a consolida aceste obiective ambițioase, domenii în care Planul ar fi putut oferi orientări mai clare. “

Alina Arsani – EPG Head of Energy Systems:

“Varianta finală a PNIESC aduce îmbunătățiri notabile față de versiunea inițială din 2023. Pe lângă ținte mai ambițioase pentru reducerea emisiilor de gaze cu efect de seră și creșterea capacităților instalate din surse regenerabile de energie (SRE) pentru 2050 la 33,3 GW energie solară și 21,3 GW energie eoliană față de 30,5 GW, respectiv 16 GW în varianta anterioară a planului, remarcăm și creșterea capacităților de stocare a energiei până la 1,2 GW pentru 2030 și 2,0 GW pentru 2035. Acestea din urmă sunt esențiale pentru facilitarea integrării SRE și implicit deciziile de investiții.

Cu toate acestea, au rămas anumite aspecte care necesită clarificări și ajustări, precum necesitatea unui plan concret privind utilizarea gazului natural până în 2040, respectiv 2050, care să ofere mai multe informații despre tranziția către hidrogen, precum capacitățile instalate din SRE necesare producerii de hidrogen regenerabil, infrastructura de transport și stocare, importurile și exporturile și, nu în ultimul rând, integrarea biometanului în rețelele existente. În plus, sectorul energetic ar trebui să vizeze o țintă mai ambițioasă pentru reducerea emisiilor de gaze cu efect de seră. Conform analizelor EPG, decarbonizarea sectorului energetic este posibilă în anul 2040 într-un scenariu în care capacitatea instalată din SRE este mai ambițioasă, corelată cu capacități semnificative de stocare a energiei electrice.

Salutăm creșterea obiectivelor privind vehiculele electrice și plug-in; totuși, este nevoie și de un cadru mai ambițios privind stimularea achiziției de autoturisme electrice și plug-in și descurajarea achiziției de autoturisme cu ardere internă second-hand. Apreciem și menționarea Legii privind energia eoliană offshore în document, alături de ținta pentru primele capacități instalate în anul 2032. Totuși, considerăm că ar trebui evidențiată mai clar diferența dintre energia eoliană offshore și onshore, având în vedere diferențele semnificative de factori de capacitate și costuri între cele două tehnologii.”

Pentru declarații suplimentare, îi puteți contacta pe colegii noștri la radu.dudau@epg-thinktank.org (Radu Dudău), luciana.miu@epg-thinktank.org (Luciana Miu) și alina.arsani@epg-thinktank.org (Alina Arsani).