Brussels (The Brussels Morning Newspaper) – The EU Commission approves a €500 million Romanian State aid scheme to back investments in biofuel production capacity to facilitate the transition to a net-zero economy.
The European Commission has agreed to a €500 million (RON 2.5 billion) Romanian scheme to fund investments in new production capacities of biofuels. The scheme was supported under the State Aid Temporary Crisis and Transition Framework (‘TCTF’) assumed by the Commission on 9 March 2023 and revised on 20 November 2023 and on 2 May 2024. Under the scheme, which Romania plans to finance through the EU Modernisation Fund, the aid will take the form of direct assistance.
How will the Romanian scheme support biofuel production capacity?
The measure will back investments in new production capacities of targeted advanced biofuels, i.e. bioethanol, sustainable aviation fuel and hydrotreated vegetable oil. By backing advanced biofuels, the measure will bring considerable reductions in greenhouse gas emissions, while determining the impact on agriculture compared to conventional biofuels produced from food crops.
Why is the Commission backing biofuel investments in Romania?
The Commission figured that the Romanian scheme is in line with the requirements set out in the TCTF. In certain, the aid (i) will fund the accelerated rollout of renewable energy and thereby contribute to attaining the EU’s climate and energy targets; (ii) will respect the maximum aid intensity; and (iii) will be given no later than 31 December 2025.
Furthermore, the EU Commission concluded that the Romanian scheme is essential, appropriate and proportionate to rev the green transition and facilitate the development of specific economic activities, which are of significance for the REPowerEU Plan, in line with Article 107(3)(c) Treaty on the Functioning of the European Union and the conditions outlined in the TCTF. On this basis, the EU Commission agreed the Romanian scheme under EU State aid rules.
