The EC approves a 390 million euro energy aid scheme notified by Romania

The scheme will also contribute to the EU’s strategic objectives related to the European Green Deal.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Thanks to this €390 million scheme, Romania will be able to support the construction of more efficient district heating systems, thus contributing to the greening of the sector. This aid measure, which will be partially financed by the Recovery and Resilience Mechanism, will support the achievement of the objectives of the European Green Deal and will support Romania to reach its emission reduction targets, while limiting possible distortions of competition.”

This scheme, which will run until 30 June 2024, aims to support the production of electricity and heat by high-efficiency cogeneration plants connected to the networks of the Romanian district heating system. In particular, the measure aims to promote the construction of new high-efficiency plants, as well as the transformation of existing plants, so that they no longer use coal as fuel, but natural gas.

Projects that will benefit from aid will be selected based on the order in which applications are received. To be eligible, they must relate to high-efficiency cogeneration projects that run on natural gas and meet the EU’s carbon neutrality targets for 2030 and 2050. Under the scheme, aid will be given in the form of direct grants. The support will be granted for a maximum period of 3 years.

The Commission assessed the scheme under EU State aid rules and the 2022 Guidelines on State aid for climate, environmental protection and energy, which allow Member States to support high-efficiency cogeneration, subject to certain conditions being met, in order to boost energy savings.

The Commission found that the scheme facilitates the development of certain economic activities. In particular, it promotes high-efficiency cogeneration plants in Romania and reduces greenhouse gas and CO2 emissions. The aid scheme has an incentive effect, as beneficiaries would not invest in high-efficiency cogeneration plants to the same extent in the absence of public support. The measure has a limited impact on competition and trade within the EU. In particular, it is necessary and timely for Romania to meet the European and national environmental objectives. Furthermore, the measure is proportionate and any negative effect on competition and trade in the EU will be limited, given the size of the projects, aid amounts and the characteristics of the sector. Also, the necessary guarantees will be established to limit the aid to a minimum, given the fact that Romania will ensure that the aid does not exceed the financing deficit (namely, the minimum amount of aid necessary to attract the investments which, in its absence, would not would be performed). Finally, Romania undertakes to avoid any blocking effect of natural gas-based energy generation (namely, to avoid hindering the transition from natural gas to less polluting alternatives). Given these considerations, the Commission approved the measure under EU state aid rules.

(source: AFP)

Source: Jurnalul by

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