​Why is Romania delaying access to 6 billion euros from the Social Fund for Climate by three years

The Ministry of Energy wants to postpone until 2030 Romania's access to around 6 billion euros from the Social Fund for Climate. The ministry invokes the protection of the population, according to a response sent by the institution to HotNews' request. To obtain money from this fund, member states are obliged to implement ETS2 (Emissions Trading System 2), a new European system for trading carbon emission certificates. However, these certificates mean charging fuel and energy suppliers, which is passed on in prices.

Several sectors, for example road transport with petrol and diesel or heating buildings with natural gas, have money available to offset the economic effects of some environmental protection measures, according to data from the European Commission.

Mechanism description

These sectors are part of ETS2 (Emissions Trading System 2). ETS 2 is an extension of the existing ETS system, targeting industry and energy, but applied to sectors that were not directly charged for emissions until now.

Those charged are the suppliers of fuels and energy, but they pass the cost on to consumers.

To offset the impact on the population, the EU created the Social Climate Fund (SCF) which provides money to member states to insulate homes, install heat pumps and cheaper public transport.

The Climate Fund will operate in the period 2026-2032, with an allocation of 65 billion euros from the EU budget, complemented by national co-financing of at least 25%, which leads to a total of 86.7 billion euros at the European level.

From this money, Romania can get about 6 billion euros. But access to funding is conditional on the implementation of ETS2 which will become fully operational in 2027. The Ministry of Energy wants a delay until 2030, which means two years before the fund's operation expires.

How much gas and fuel prices will increase

The Ministry of Energy claims that it has made an analysis from which it appears that fuel and gas prices will increase. What the analysis shows, according to the response to HotNews:

• An impact of about 0.7-0.8 lei/liter without VAT on the price of fuels, assuming an intervention price of 45 euros/certificate;
• In the scenario based on higher quotations, the increase in the cost of road transport is estimated at approximately 1.18 lei/liter for diesel and 1.15 lei/liter for gasoline;
• For natural gas, the estimated impact is approximately 40-50 lei/MWh without VAT in the basic scenario, and in the higher scenario, analyzed by the ministry, of approximately 77.88 lei/MWh. This means an increase of approximately 30% in natural gas bills compared to the current supply offers.

“The Ministry assessed that such effects could fuel inflation, reduce purchasing power and accentuate energy poverty, which is why it requested complementary measures and an in-depth analysis, including from the perspective of SMEs”, the response to HotNews also states.

Ministry of Energy: Costs rise immediately, offsets take time

The Ministry of Energy claims that Romania is not ready for implementation on the grounds that suppliers will transfer these costs to final consumers, leading to higher prices.

This, even though the Social Climate Fund (FSC) was created specifically to return this money to citizens in the form of €6 billion in subsidies for house insulation, heat pumps or cheap public transport.

“The position of the institution is that the positive effects of FSC materialize over time, and the impact of ETS2 on prices is immediate. In the absence of a synchronized implementation and a strengthened administrative capacity, there is a risk that the vulnerable population will bear the costs before actually benefiting from the support”, the institution claims.

The Ministry of Energy believes that “an implementation formula must be pursued that allows both the protection of consumers and the valorization of FSC”.

charging

HotNews asked the Ministry of Energy whether it has carried out a cost-benefit analysis comparing the impact of the new tax on the population versus the benefits of the 6 billion euro investment in energy efficiency and mobility for vulnerable people.

To this question, the Ministry of Energy replied that it had carried out a preliminary impact analysis which “indicates a significant impact on the population and the economy and which justifies the request for a more in-depth assessment and some complementary measures”.

“Based on this preliminary analysis, ETS2 emissions of approximately 40 million tCO2/year were estimated for Romania, which, at an intervention price of 45 euros/certificate, would mean an additional cost of approximately 1.8-2 billion euros/year, initially borne by suppliers and later transferred to consumers,” stated the Ministry of Energy.

Dragoș Pîslaru: It is a minimal additional charge compared to the 5-6 billion euros

Dragoș Pîslaru, Minister of Investments and European Projects, criticized the delay in the implementation of ETS2.

The minister considers that the taxation is “minimal”, compared to what Romania could earn from the Fund. “We have everything well prepared. Correspondence with the Commission is very advanced, but, unfortunately, at the national level we are not prepared to add an additional tax, even if it is a minimal one compared to the 5-6 billion that would be taken through the FSC”, said the minister, in Parliament, upon the adoption of the 2026 budget, according to Agerpres.

Pîslaru specified that the Ministry of Energy adopted a normative act postponing the adoption of ETS2 for 2030.

“We and the Ministry of the Environment have obtained a waiver to implement ETS2 until 2028, but until we clarify that we can implement from 2028, that is, the Ministry of Energy waives that postponement, we will not be able to present to the Commission the element that allows us, in fact, to attract money. Therefore, to be brief, we are ready, obviously and willing, to discuss the final details regarding the things that we have suggested,” he added Pîslaru.

What Romania risks from a legal point of view

The Ministry of Energy admitted, in the answers for the editors, that “there is a real legal risk”, when asked if this postponement until 2030 will lead to the triggering of an infringement procedure.

“The main risk associated with a possible delay is one of compliance with European Union law and, secondly, of a possible impairment of full access to the financial instruments dedicated to ETS2, including the Social Fund for Climate”, replied the Ministry of Energy.

Going forward, the Ministry of Energy believes that “additional assessments regarding the impact on inflation, competitiveness and SMEs” must be made, and “the implementation of ETS2 should be balanced, phased and correlated with the real capacity to absorb the impact at the level of the population and the economy”.

“The position of the Ministry of Energy is that the success of ETS2 in Romania depends not only on compliance with the European calendar, but also on the ability to protect vulnerable consumers, to effectively use the Social Fund for Climate and to finance structural investments that reduce the final cost of the transition. The Ministry of Energy does not support the abandonment of European objectives, but a balanced, phased and socially sustainable implementation, which avoids the full and immediate transfer of costs to citizens”, stated the Ministry of Energy.