EC approves Romania’s 500 mln. euro scheme to support investments in the production of biofuels

The European Commission has approved, based on EU rules on state aid, Romania’s scheme, worth 500 million euros (2.5 billion lei), to support investments in new biofuel production capacities, according to a press release of the Community Executive.

Within the scheme, which Romania intends to finance through the Modernization Fund, the aid will take the form of direct subsidies. The measure will support investments in new production capacities for advanced biofuels, namely bioethanol, sustainable aviation fuels and hydrotreated vegetable oil. By supporting advanced biofuels, the measure will result in significant reductions in greenhouse gas emissions, while limiting the impact on agriculture compared to conventional biofuels produced from food crops.

The Commission decided that Romania’s scheme is in line with the conditions established in the Temporary Crisis and Transitional Framework for State Aid (TCTF). In particular, the aid will support the acceleration of the development of renewable energy and therefore contribute to meeting the EU’s environmental and energy objectives, will respect the maximum aid intensity and will not be granted later than 31 December 2025.

Thus, the Commission concluded that Romania’s scheme is necessary, adequate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, important for the REPowerEU Plan, in line with Article 107 paragraph (3) letter (a) of the TFEU, which allows the member states to promote the economic development of the most disadvantaged areas of the EU, and the conditions established in the TCTF.

On this basis, the European Commission approved Romania’s scheme under EU state aid rules.