Sebastian Burduja, Minister of Energy: “Romania has the opportunity to develop advanced biofuel production and thus become a regional leader in decarbonizing the transport sector. Nearly a quarter of the world’s greenhouse gas emissions come from the transport sector, whether it’s road, air, or maritime transport.”

On October 4, 2024, the European Commission approved a state aid scheme worth EUR 500 million to support investments in advanced biofuel production in Romania.

To support this investment measure, the Ministry of Energy will request funding from the Modernization Fund at the Investment Committee meeting in the spring of next year. The ministry has already prepared the documentation to apply for financial support, with an initial request of EUR 100 million, followed by phased requests for the remaining amount.

“We need to develop the tools to achieve the common targets set at the European level. We live in a dynamic world, constantly moving, but this freedom and efficiency come at a cost. Nearly a quarter of the world’s greenhouse gas emissions come from the transport sector, whether it’s road, air, or maritime transport. And because this sector is heavily dependent on fossil fuels, introducing advanced biofuels will increase the share of renewable energy sources in fuel composition and inevitably have a positive impact on reducing greenhouse gas emissions.

Romania has the potential and capacity to develop in this field, and we at the Ministry of Energy will support this type of investment. Our prior consultation and feedback received from interested economic operators were crucial in designing this new state aid scheme,” stated Sebastian Burduja, Minister of Energy.

The state aid scheme aims to support investments in new capacities for advanced biofuel production, such as bioethanol and hydrotreated vegetable oil (HVO), as well as sustainable aviation fuel (SAF), so that these types of biofuels ensure at least 5% of final energy consumption in the transport sector by 2030.

The total estimated budget of the state aid scheme is approximately EUR 500 million, with the first call to be launched with a budget of EUR 100 million. The state aid will cover up to 45% of total investment costs, but not exceeding EUR 45 million per bioethanol plant and EUR 91.25 million per SAF/HVO plant.

The estimated production capacity of advanced biofuel plants (tons/year) is a minimum of 50,000 tons of bioethanol and 20,000 to 90,000 tons per combined SAF and HVO plant.

Eligible applicants under the state aid scheme are public or private entities (micro-enterprises, small, medium, and large enterprises, including newly established companies), legally registered for tax purposes in Romania at the time of the financing application submission.

To qualify for state aid in advanced biofuel production, the biofuels must meet the sustainability and greenhouse gas emissions reduction criteria set out in Directive (EU) 2018/2001 and its delegated or implementing acts.

Through this state aid scheme, the Ministry of Energy aims to achieve the following objectives:

• Install advanced biofuel production capacities to contribute to meeting domestic demand with local production and reducing imports;
• Replace first-generation biofuels made from food crops with second-generation biofuels produced from residues/waste, which do not impact the agricultural sector and significantly reduce greenhouse gas emissions;
• Achieve efficient decarbonization, in line with the objectives of the European Green Deal as a sustainable growth strategy, combat climate change, and align with the EU’s commitments to implement the Paris Agreement and the UN’s Sustainable Development Goals, by supporting a socially fair transition to a green economy and low-carbon investments in the transport sector;
• Reduce the carbon footprint by blending advanced biofuels with fossil fuels in the road transport sector and, for the aviation sector, using biofuels produced from raw materials listed in both part A and part B of point (a) in Annex IX of Directive (EU) 2018/2001.

Furthermore, the state aid scheme contributes to the targets set out in the Integrated National Energy and Climate Plan (PNIESC) 2021-2030 regarding energy and climate for 2030 and a climate-neutral EU economy by 2050. In parallel with achieving these targets, the scheme also aims to create new production capacities for environmentally friendly fuels with low or zero carbon footprints.

For decarbonizing the transport sector, the best available technologies for reducing greenhouse gas emissions will be implemented, along with substantial transformation of technological processes, including consideration of carbon capture and storage solutions and increased energy efficiency in transport.