The buildings and transport sectors are central to Romania’s climate and air quality challenge. Emissions from both sectors have increased from 2008 to 2021, accounting for 8% and 26% of total GHG emissions in 2021, respectively, and are major sources of air pollution. Buildings account for 85% of total particulate matter (PM2.5) emissions, while the transport sector accounts for 49% of nitrogen oxide (NOₓ) emissions.
Environmental policy in Romania is largely EU-driven regarding both targets and policy instruments. The Fit for 55 package will significantly reshape Romania’s climate policy framework, revising existing targets and policies and introducing new ones. To date, Romania has not adopted more stringent or complementary national air quality measures than those set in EU-level standards.
Climate and environmental policy governance is shared among different ministries in Romania, while tax policy is anchored within the Ministry of Finance. The Green Tax Unit within the Ministry of Finance aims to co-ordinate on environmental tax matters both within the Ministry of Finance and across other ministries. The Interministerial Committee on Climate Change (CISC) provides the main co-ordination mechanism on general climate matters and the energy transition at the political level. Expanding cross-ministerial and stakeholder co-ordination for air pollution and broader environmental policy, building on the CISC model, could further strengthen environmental governance.
Reform of environmentally related taxes can support Romania’s policy goals of revenue mobilisation while advancing environmental objectives, provided they are carefully designed.
Energy use in residential buildings is subject to excise taxes, but coverage remains incomplete and tax rates are not aligned with the carbon or air-pollution content of different energy sources. No explicit carbon or air pollution tax applies. The new EU ETS2 will contribute to reflect carbon-related external costs, but not those related to air pollution. Moreover, heterogeneous VAT treatment across energy products provides implicit support to polluting fuels.
Energy use in the road transport sector is covered by excise taxes, but rates are not well aligned with their carbon content. There is no tax on new registrations of vehicles. Ambitious reforms to account for air pollution have been legislated for 2026, both through a new kilometre-based charge for heavy-duty trucks and through modification of the existing recurrent tax for cars.
Environmental Tax Policy Review of Romania
This chapter takes stock of Romania’s environmental tax policy framework governing GHG emissions and air pollution. First, the chapter reviews the legal framework governing GHG emissions and air pollution at both the EU and national levels. Second, it assesses the distribution of responsibilities across different levels of government, EU, national, regional, and local, in policy areas relevant to emissions reduction and air pollution control. Third, it provides a broad overview of environmentally related taxes related to GHG and air pollution emissions in Romania. This stocktake aims to inform the sectoral chapters on the residential buildings and transport sector, providing an in-depth review and assessment of environmentally related taxes as well as possible reform options.
1.1.1. GHG emissions
Over the past two decades, Romania’s GHG emission reductions have exhibited significant variation across sectors. GHG emissions stem from both fuel combustion and non-combustion sources, such as industrial processes, agriculture and waste management. Over the past decade, GHG emissions in Romania decreased modestly in the industry and waste sectors (Figure 1.1). In contrast, the power generation sector achieved a significant reduction, with emissions in 2021 reaching just 42.7% of their 2008 levels. Meanwhile, GHG emissions from the transport, buildings, and agriculture and forestry sectors have risen considerably. While the agriculture and forestry sector contributes to only 3% of total GHG emissions, the buildings and transport sectors represent 8% and 26% respectively, highlighting their importance in Romania’s emissions profile.
Romania’s energy mix is diversified, with fossil fuels making up a large part of the energy supply (IEA, 2024[1]). Final energy use in Romania is made up by 34.4% of oil, 26.1% of natural gas, 16.2% of electricity, 15.5% of biofuels and waste, 4.1% of heat, and 3.4% of coal. The share of renewables excluding traditional uses of biomass makes up 23.6% in 2021, of which a large share is made of hydropower (IEA, 2024[1]). The sectors with the highest energy use in Romania are the residential building (34.8%) and transport (27.5%) sectors, followed by the manufacturing sector (25.4%).
Note: The figure excludes emissions from waste making up from less than 1% of total GHG emissions in 2021 and land use, land-use change, and forestry (LULUCF).
Source: Author’s elaboration based on Eurostat (2024[2]).
In Romania, a large part of GHG emissions is made up of carbon dioxide (CO₂). There are seven primary GHGs that contribute to climate change: CO₂, methane (CH4), nitrous oxide (N2O), chlorofluorocarbons (CFCs), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3). Some GHGs have a stronger global warming impact than others. To make them comparable, GHG emissions can then be expressed in CO₂-equivalent (CO₂e), which indicate the relative radiative forcing (the amount of warming) over 100 years following the release of one unit mass of GHG into the atmosphere, taking CO₂ as a reference. In 2021, CO₂ emissions represented 66.9% of GHG emissions in Romania (Figure 1.2). CH4 represent about 22.3% of emissions in CO₂e, N2O 9.1% and F-gases, 1.7%.
The different emission sources contribute to different GHGs. In Romania, agriculture is the largest source of methane (CH₄) emissions, followed by fugitive emissions from oil and gas extraction, transportation, and other processes, including fracking. Waste management, particularly methane released from landfills during the decomposition of organic materials, represents the third largest source of methane emissions in Romania. In the case of N₂O, almost all emissions originate from agricultural activities. By contrast CO₂ emissions in Romania are dominated by electricity and heat production, with transport as the second-largest contributor (Ritchie, Rosado and Roser, 2020[3]).
2021, percentages based on CO₂e
Note: The figure presents the share of GHG emissions excluding the land use, land use change and forestry (LULUCF) sector.
Source: Author’s elaboration based on UNFCCC (2023[4]).
Rising GHG concentrations and the resulting climate change entail significant economic costs and increase Romania’s vulnerability to climate-related risks, including floods and drought (OECD, 2024[5]). GHG emissions are long-lived “stock pollutants”, whose climate impacts are largely independent of their geographical origin. Climate change intensifies extreme weather conditions such as extreme temperatures, floods, storms, drought, and wildfires, that can disrupt economic activity, impact food security, endanger human life, damage buildings and infrastructure.1 In Romania, extreme weather events will exacerbate the vulnerability of households, particularly for those living in low-quality housing. Since 1990, climate-related extreme weather events in Romania are estimated to have caused over 1 400 fatalities and created losses of over EUR 19.63 billion (EEA, 2023[6]). While climate adaptation is an important policy priority for Romania, this report focuses on climate mitigation rather than adaptation.
1.1.2. Air pollution
Industrial processes and the combustion of fuels contribute to local air pollution. There are various local air pollutants, especially particulate matter (PM), which can be emitted directly, or formed indirectly from atmospheric reactions involving sulphur oxides (SOx) and nitrogen oxides (NOx). PM consists of PM10, which are inhalable particles with diameters equal or smaller than 10 μm, and PM2.5 which are fine inhalable particles with diameters of 2.5 μm and smaller. In contrast to stock pollutants, such as GHG emissions, which accumulate over time in the atmosphere, air pollutants are flow pollutants. This implies that they cause damage as they are produced, so that damage is local and varies over time. Air pollutants can be harmful by themselves but also through their reaction with water, oxygen and other chemicals in the atmosphere, which can lead to the formation of other toxic substances.
Air pollution has been found to increase respiratory and cardiovascular hospital admissions, and emergency department visits (WHO, 2021[7]). Elevated pollution levels also contribute to a high number of premature deaths. Among air pollutants, PM2.5 poses the greatest health risk due to its ability to penetrate deep into the lungs and bloodstream. NOx, SOx, and volatile organic compounds contribute to urban smog through ozone (O₃) formation, although having a less pronounced impact on mortality than that of PM2.5 (Parry et al., 2014[8]).
Air pollution presents a major health challenge in Romania. The Romanian population is exposed to particularly high air pollution levels compared to other EU countries (Figure 1.3, Panel A). The entire population is exposed to air pollution levels exceeding the World Health Organization (WHO) standards of 5 µg/m³ of PM2.5 (WHO, 2021[7]). In 2020, 99.37% of the Romanian population was exposed to pollution above the annual EU limit of 10 µg/m³ of PM2.5 (Directive (EU), 2024/2881[9]), compared to the EU average of 64.45% (Figure 1.3, Panel B). Air pollution contributes to hundreds of thousands of premature deaths annually. In 2024, the European Environment Agency (EEA) estimated that in Romania, PM2.5 exposure caused 17 950 premature deaths, while NOx and O₃ were responsible for 3 580 and 2 770 deaths, respectively (EEA, 2024[10]).
Source: Author’s elaboration based on OECD (2020[11]).
Air pollution levels in Romania are linked to significant economic costs. The impact of air pollution on hospitalisation and premature deaths imposes a substantial economic burden on Romanian society. In 2019, the welfare costs of premature deaths associated with air pollution2 were equivalent to 8.5% of GDP, compared to an OECD average of 2.4% (Figure 1.3, Panel C). A growing literature has also investigated the impact of air pollution on non-health related outcomes, such as reduced labour productivity through lost working days and its negative impact on cognitive performance and multiple forms of decision-making (Kögel, 2023[12]; Zivin and Neidell, 2018[13]; Aguilar-Gomez et al., 2022[14]). Ultimately, these costs translate into a negative impact on country’s economic growth. An OECD study shows that among EU countries, a 1μg/m3 increase in PM2.5 concentration (or a 10% increase at the sample mean) causes on average a 0.8% reduction in real GDP that same year (Dechezleprêtre, Rivers and Stadler, 2019[15]). These non-health channels add on the overall cost of air pollution and increase the importance to reduce air pollution levels and exposure.
Air pollution is highly concentrated in Romania’s most densely populated areas. Air pollution concentration is concentrated in the country’s most densely populated areas, including Bucharest, Cluj-Napoca, Craiova, Pitești, and Ploiești (Figure 1.4). The higher pollution exposure in urban areas can be explained through higher population density, going along with higher traffic and congestion, as well as more concentrated space heating compared to rural areas. At the same time the urban structure and spatial development patterns of cities matter. A study on large urban zones across Europe shows that fragmented and highly constructed cities experience higher concentrations of NO₂ and PM10 and that densely populated cities suffer from higher SO2 concentration (Cárdenas Rodríguez, Dupont-Courtade and Oueslati, 2016[16]).
The impact of air pollutants on health and productivity outcomes is further influenced by demographic factors and local weather conditions. While higher population density contributes to increased emissions through activities such as transportation and space heating in buildings, the external cost of air pollution also varies by location and exposure (Zivin and Neidell, 2018[13]) (OECD, 2016[17]). This is because the exposure to air pollution varies by local characteristics, such as the population density, the age and prevalence of certain pathologies in the population (interactions with other health related factors of the population, e.g. related to diet), local weather conditions, and existing pollutant densities in the air (Hunt et al., 2016[18]). Further, local weather conditions such as temperature, rainfall, wind regime or atmospheric stability will also determine the populations’ exposure and hence impact on health. For example, available evidence indicates increased mortality risk for combined exposure to heat and elevated concentrations of any of the three key air pollutants, PM2.5, ozone or nitrogen dioxide (Rahman et al., 2022[19]).
Note: The data estimates PM2.5 concentrations by combining ground monitors, satellite data, and chemical transport models for 2022. The population density refers to the quintiles of the estimated total number of people per grid-cell at a spatial resolution of 0.01◦ × 0.01◦(approximately 1km × 1 km cells in Romania, depending on latitude) and refers to 2020. Low population density is indicated by 1, while high population density is indicated by 5.
Source: Author’s elaboration based on Shen et al. (2024[20]) for data on PM2.5 concentrations and WorldPop (2025[21]) for data on population density.
Because air pollution is a local challenge, it is important to understand which segments of the population are most affected and why. Findings show that low-income households are exposed to higher average air pollution levels than high-income groups (Banzhaf, Ma and Timmins, 2019[22]; Jbaily et al., 2022[23]; Currie, Voorheis and Walker, 2023[24]; van den Brekel et al., 2024[25]). These inequalities persist at different spatial scales: countries (Rentschler and Leonova, 2022[26]), regions (EEA, 2025[27]), cities and neighbourhoods. Possible drivers are that households with higher incomes generally have the resources to live in areas with lower levels of air pollution and with overall better environmental quality. Higher income can also afford better-quality housing, which can reduce environmental exposures owing to both housing structure (e.g., indoor air quality) and location (e.g., near-highway air quality) and may increase access to political capital to influence siting of air pollution sources (Mohai and Saha, 2015[28]). These studies highlight the importance for policy makers of considering heterogeneous exposure of air pollutants within a given location. Further research is needed to explore the underlying drivers of the observed disparities and investigate how future national air-quality standards could encourage more equitable attainment.
Over the past decade, air pollution reductions in Romania have been generally modest, with the notable exception of SOx, reflecting differences in pollutant sources and policy priorities (Figure 1.5). PM2.5 and NOx experienced only limited declines, reaching 83% and 82% of their 2010 levels in 2022, respectively, with both air pollutants even slightly increasing in recent years. The primary source of PM2.5 and PM10 is fuel combustion in the residential and commercial buildings sector, while more than half of NOx emissions originate from combustion in the transport sector. In contrast, SOx emissions declined significantly, dropping to just 13% of their 2010 levels. The primary source of SOx is coal combustion for electricity generation, heating, and industrial processes. The sharp decline in SOx emissions might be largely attributed to Romania's accession to the EU in 2007 and the subsequent enforcement of the EU Large Combustion Plant Directive (Directive 2001/80/EC), which imposes limits on SOx emissions from large industrial facilities. The EU Directive on sulphur content of liquid fuels (Directive (EU), 2016/802[29]), laying down the maximum permitted sulphur content of heavy fuel oil, gas oil, marine gas oil and marine diesel oil used in the EU, led to additional reductions in SOx emissions.
Source: Author’s elaboration based on EEA (2025[30]).
Air pollution and GHG emissions are closely interconnected as they share sources, affected sectors, and mitigation options, but reducing one does not automatically reduce the other. Climate change and outdoor air pollution interact across multiple levels, ranging from shared emission sources and chemical reactions between pollutants to complex feedback mechanisms within the biophysical system and their broader economic consequences (Lanzi and Dellink, 2019[31]). Rising GHG concentrations drive temperature changes, which in turn alter the chemical composition of the atmosphere, potentially exacerbating air pollution and its associated health and environmental impacts. Conversely, certain air pollutants can have a cooling effect on the climate. For instance, SOₓ emissions contribute to the formation of light-reflecting particles, which can partially offset warming (Arneth et al., 2009[32]). Understanding these complex interdependencies is crucial for designing integrated policies that address both air quality and climate objectives effectively.
1.2.1. Legislative and strategic framework on GHG emissions in Romania
Romania’s climate policy is largely shaped at the EU level. Table 1.1 provides an overview of the relevant regulations and strategies on GHG emissions. The table includes sectoral legal frameworks for stationary sources of emissions, focusing on energy use in residential buildings, as well as for non-stationary sources of GHG emissions focusing on the road transport sector. The analysis covers updates to the legal framework until November 2025.
Note: The analysis covers updates to the legal framework until November 2025.
Source: Author’s elaboration.
The centrepiece of EU climate policy is the EU Green Deal. Its overarching objective is to achieve climate neutrality in Europe by 2050, which requires net-zero GHG emissions across all EU member states. Achieving this target involves contributions from all sectors of the economy, including industry, energy, and transport. To make carbon neutrality by 2050 legally binding, the EU adopted the European Climate Law on 29 July 2021 (Regulation EU 2021/1119) (European Commission, 2021[34]). The law also sets an intermediary target of reducing net GHG emissions by at least 55% by 2030 compared to 1990 levels. It further includes a commitment to negative GHG emissions after 2050. The law aims to ensure coherence across EU policies related to carbon neutrality.
The 2030 and 2050 emission targets set by the European Climate Law are binding for all EU member states, including Romania, as EU regulations overrule national laws. The law also includes mechanisms for EU member states to monitor their progress through national climate and energy plans (NECPs) and to adjust their actions accordingly. Progress is reviewed every five years.
Unlike many other EU countries, Romania has not yet included economy wide GHG emission reduction targets into legislation (OECD, 2022[35]). Legally binding targets play a crucial role in clarifying policy objectives and reducing uncertainty for businesses and households (Ciminelli and D’Arcangelo, forthcoming[36]). Evidence from other countries demonstrates that climate laws foster evidence-based policymaking, encourage public debate, and sustain focus on long-term climate objectives. They also enhance government accountability and transparency. For example, Greece’s National Climate Law (2022) provides the national framework document on climate and energy matters. It sets targets to reduce national GHG emissions by 55% by 2030, by 80% by 2040 and to reach net zero by 2050. The Climate Law defines key mitigation measures, including the phase out of lignite-fired power generation by 2028, and adopts a five-year sectoral carbon budget approach. By adopting similar legislative measures, Romania could strengthen its climate governance and accelerate its transition to a sustainable, low-carbon economy (OECD, 2024[5]).
Note: Climate mitigation measures are depicted in blue; climate adaptation measures are depicted in orange. The Fit for 55 package is a
series of legislative proposals to revise current EU legislation aiming to mitigate climate change. The list of proposals is not exhaustive but
focuses on the relevant domains for the report.
Source: Author’s elaboration based on (OECD, 2023[37]).
To deliver the 2030 and 2050 emissions targets, the EU introduced a series of legislative proposals under the Fit for 55 package. This comprehensive legislative framework aims to revise and update EU legislation while introducing new initiatives to ensure alignment with climate goals. Figure 1.6 provides an overview of the EU Green Deal, and an excerpt of relevant measures under the Fit for 55 package. Key elements include revisions of the EU Emissions Trading System (EU ETS), the introduction of the EU Carbon Border Adjustment Mechanism (CBAM), a possible revision of the Energy Taxation Directive (ETD), the revision of the Effort Sharing Regulation, the revision of the regulation on cars and vans, the revision of the Energy Efficiency Directive (EED), the revision of the Renewable Energy Directive (RED II), and the revision of the Directive on the energy performance of buildings.
At the core of the Fit for 55 package is a comprehensive reform of the current EU ETS (Directive (EU) 2023/959), which applies to all EU member states:
Increased reduction target: The emission reduction target for sectors covered by the ETS is raised from 43% to 61% by 2030 compared to 2005 levels.
Allowance allocation revisions: Free allocations are being revised to further incentivise low-carbon technologies.
Strengthening the Market Stability Reserve (MSR): The MSR mechanism, addressing the excess of allowances since 2009, will be strengthened.
Extension to new sectors: The ETS will expand to include maritime activities for ships above 5 000 gross tonnage traveling within the EU or at berth in EU ports. A separate ETS (ETS2) will be to cover emissions from fuels used in road transport, buildings, and additional sectors, mainly small industry not covered by the existing EU ETS (see Section 4.1. for an in-depth description of the ETS2).
The European Commission has also introduced a Carbon Border Adjustment Mechanism (CBAM) as part of the Fit for 55 package (Regulation (EU) 2023/956), pricing embodied emissions of certain products. CBAM aims to price the carbon content of imports in specific sectors to address competitiveness concerns for industries subject to high carbon costs and to prevent carbon leakage. CBAM is set to launch in 2026, following a transitional reporting period from 2023–2025 (OECD, 2026[38]).
A proposal for revision of the Energy Taxation Directive (ETD) (2003/96/EC) is intended to align energy taxation with the objectives of the EU Green Deal (European Commission, 2021). Originally implemented in 2003, the ETD sets minimum excise duty rates for energy products used as motor and heating fuels and electricity. The Commission proposes a new structure of minimum tax rates of energy carriers based on their energy content and environmental performance instead of solely taxing their volume. The revised ETD also proposes a broader tax base to include additional products (e.g., mineralogical processes) and the removal of certain exemptions (e.g., kerosene used in aviation and heavy oil in maritime transport) (European Commission, 2021[39]). Reduced rates will still apply to renewable electricity and certain sectors, such as agriculture. In November 2025, a compromise text prepared by the Danish Presidency of the Council did not secure the unanimous support of EU member states (European Council, 2025[40]).
Beyond pricing policies, the Fit for 55 package also includes a revision of the Effort Sharing Regulation defining binding national GHG reduction targets for sectors not covered by the EU ETS (Regulation (EU) 2023/857). Covered sectors include transport (excluding aviation, international navigation), buildings, agriculture (excluding emissions and removals from LULUCF activities), small industry, and waste, which together account for nearly 60% of total EU emissions. Targets are differentiated based on GDP per capita, reflecting varying national capacities. The revision increases the EU-wide reduction target from 30% to 40% by 2030 compared to 2005 levels. To ensure fairness, targets are based on GDP per capita and adjusted for cost-efficiency for EU member states with high marginal abatement cost curves. Across the covered sectors, Romania’s reduction target rises from 2% to 12.7% by 2030 in relation to 2005 levels, while higher-income countries like Germany, Denmark, Finland, and Sweden face targets of up to 50%. The regulation also sets annual emission limits from 2021 to 2030, with a declining allocation of emission allowances per year. Flexibility mechanisms, such as trading, borrowing, and banking of allowances support compliance and cost-effectiveness. This binding target is far more ambitious and will require comprehensive policies to be able to reach it (Figure 1.7).
Million tonnes CO2-equivalent (Mt CO2e), Romania
Note: The marker line shows the linear pathway of emissions reductions required to meet the 2030 target for non-ETS emissions – as per the EU Effort Sharing Regulation (EU 2023/857).
Source: Author’s elaboration based on EEA, "Greenhouse gas emissions under the Effort Sharing Decision", EEA Datahub (database); OECD, “Air emissions - Greenhouse gas emissions Inventories”, OECD Environment Statistics (database).
The European Green Deal and EU Climate Law also revise sectoral frameworks, such as for the building sector. Within this context, the EU framework for building decarbonisation rests on three additional legislative pillars: the Energy Performance of Buildings Directive (EPBD) (EPBD, EU/2024/1275), the Renewable Energy Directive (RED III) (RED III, Directive EU/2023/2413), and the Energy Efficiency Directive (EED) (EED, Directive EU/2023/1791) (Figure 1.8). As EU Member State, Romania is required to transpose and implement this legislative package through national law, while following legally binding EU-level objectives and policies.
Source: Author’s elaboration based on European Commission Impact Assessment EPBD. EU policies such as the Ecodesign Directive and the EU ETS2 are discussed in the respective section.
The revised EPBD (EU/2024/1275) is the core piece of legislation for harmonising sustainable buildings standards across the EU. The EPBD aims to achieve a fully decarbonised building stock by 2050, by driving significant improvements in building efficiency, reducing GHG emissions, and supporting the transition to a more sustainable built environment. Under the new EPBD, EU member states have to develop their National Building Renovation Plans (Art. 3 EU/2024/1275). The National Building Renovation Plans will replace the national Long-Term Renovation Strategies (LTRS), which member states were required to submit since 2014. The plans will ensure the renovation of the national building stock into a highly energy-efficient and decarbonised building stock by 2050. In contrast to the previous LTRS, the National Building Renovation Plan requires not only to submit a roadmap with nationally established targets, but also an overview of planned policies and measures. Each member state must adopt a national trajectory to reduce average primary energy use from residential buildings by 16% by 2030 and 20–22% by 2035. At least 55% of these reductions must come from renovating the worst-performing buildings.3 Finally, the directive sets the ambition for zero-emission buildings as the standard for all new construction. This requirement will apply from 2028 for publicly owned buildings and 2030 for all other new buildings, with possible exceptions.
While the transposition of the revised EPBD directive into national law is still ongoing, Romania established the national legislative framework for the EPBD within Law 372/2005. This legal framework has been in place since 2007 and has undergone several amendments to align with successive recasts of the EU EPBD over the years. The law lays down the general framework for minimum energy performance requirements, as well as for building certification and inspection schemes, including for renovations. The methodology to calculate the energy performance of buildings (Mc-001-2022) entered into force in January 2023.
The Renewable Energy Directive (RED III, Revised Directive EU/2023/2413) sets binding targets for the share of renewable energy in the EU's energy mix, aiming to promote the use of renewable resources across sectors. The revised RED III entered into law in 2023 with the objective of raising the share of renewable energy in the EU’s overall energy mix to 42.5% by 2030, with an adjustment targeting a 45% headline share. It introduces measures to simplify administrative procedures for renewable energy projects, encourages the integration of renewable energy in heating, cooling, and transport sectors, and supports the development of renewable fuels.
For the buildings sector, the RED III sets a target of 49% renewable energy share by 2030. It also provides targets for a gradual increase in renewable heating and cooling, with a binding increase of 0.8% per year until 2026 at a national level, and 1.1% in 2026–2030. Within their integrated national energy and climate plans, member states have to specify how they reach the RED III targets within their national context. Within Romania’s Revised Integrated National Energy and Climate Plan, the country sets a renewable target below the EU’s legally binding requirement. The national objective for the share of renewable energy in the gross final consumption of energy by 2030 is 38.3%. This can delay Romania’s energy transformation and hinder progress towards meeting the binding EU target.
Romania has transposed the RED through Emergency Ordinance 59/2025. The Romanian Energy Regulatory Authority (ANRE) is provided with duties to implement some aspects. For example, ANRE must ensure a favourable framework for the promotion and facilitation of the development of Renewable Energy Certificates (green certificates), and has been given the responsibility to share, with the local public administration authorities, appropriate information, orientation or training programs, in order to inform citizens about advantages and practical aspects of the use of renewable energy. The details of the enabling framework must still emerge through concrete policies and measures (REScoop.EU, 2025[41]).
Energy efficiency is one of the key ambitions of the EU in the field of energy policy (`energy first principle’). The Energy Efficiency Directive was revised under Fit for 55 and requires a collective reduction of energy consumption of 11.7% across the EU (Directive (EU) 2023/1791). The Energy Efficiency Directive contains targets around renovating buildings for energy efficiency, provides support to social housing, and increases requirements for energy efficiency in heating and cooling as well as district heating. In addition to the revised EED, the European Commission published a new initiative, the ‘Renovation Wave’, aiming to double the rate of building renovation by 2030.
Romania has not yet transposed the revised Energy Efficiency Directive. Law No. 121/2014 established the Energy Efficiency Directorate within the Ministry of Energy, responsible for energy efficiency policy, secondary legislation, target monitoring, and the certification and supervision of energy auditors and managers. The law sets a regulatory framework for energy audits, including mandatory requirements for certain buildings and enterprises, and imposes annual reporting obligations on local authorities on the energy use of public buildings. Romania is currently under an infringement procedure by the European Commission for failure to communicate the full transposition of the recast Energy Efficiency Directive.
For the transport sector, beyond the Energy Efficiency Directive, Regulation (EU) 2019/631 sets fleet-wide CO₂ emission standards for new passenger cars and light commercial vehicles. Proposed revisions increase reduction targets to 55% for cars and 50% for vans by 2030, with full emissions neutrality required by 2035. The Alternative Fuels Infrastructure Regulation complements this by ensuring adequate charging and refuelling infrastructure for zero-emission vehicles.
Additionally, the amendment of the “Eurovignette” directive in 2022 set key reforms for the pricing of truck traffic, according to their emissions of CO2 and air pollution. The directive sets rules on charging heavy-duty trucks over 3.5 tons on motorways and highways in the TEN-T network. Gradual differentiation of the tolls (distance-based charges) or the vignette (time-based access charges) were gradually introduced, for Euro standard, congestion, air pollution and noise. The directive also strongly recommended the use of revenues for sustainable transport and infrastructure improvements. The latest revision of the Directive in 2022 (European Parliament, 2022[42]) enacted a mandatory modulation depending on CO2 level from March 2024 and depending on air pollution and noise level from March 2026 for countries with distance-based charging. Additionally, countries with vignette-based charging will need to transition to distance-based tolls by March 2030. Finally, pricing of heavy-duty trucks between 3.5 and 12 tones became mandatory from March 2027.
Under the UNFCCC and the Paris Agreement, the EU submits a collective Nationally Determined Contribution (NDC) encompassing all its Member States, including Romania. Alongside the supranational NDC, EU Member States are mandated to develop National Long-term Strategies (LTS) to achieve net-zero emissions by 2050 and Integrated National Energy and Climate Plans (NECP), containing the tools for implementing the strategy (Regulation (EU) 2018/1999 of the European Parliament).
Table 1.2 provides an overview of different climate mitigation targets and milestones in Romania. In contrast to the Effort Sharing Regulation target and the EU ETS regulation, the objectives within the LTS (Government of Romania, 2023[43]) and the NECP are not legally binding.
Note: LULUCF indicates land use, land-use change and forestry.
Source: Based on the Final updated Integrated National Energy and Climate Plan (2024[44]), the EU Effort Sharing Regulation (EU 2023/857), the Revision of the EU ETS (Directive (EU) 2023/959) and the LULUCF Regulation (EU 2023/839).
As an EU Member State eligible for EU structural and cohesion funds, Romania is required to develop a General Transport Master Plan (GTMP) as a prerequisite for accessing funding for transport infrastructure. The GTMP is a strategic roadmap that outlines the long-term objectives for their national transport systems, with the current planning horizon extending to 2030. The preparation of GTMPs is a mandatory condition for accessing EU funding. Romania’s GTMP was adopted in September 2014 (Government of Romania and Ministry of Transport, 2014[45]). The strategic objectives for the Road Sector have been identified as:
Improving the population mobility and freight traffic along the Trans-European Transport Network (TEN – T Core)4 and Comprehensive network through the execution of a motorway and expressway network;
Ensuring the accessibility of population and business environment to the TEN – T Core and Comprehensive network through the execution of the national connectivity corridors;
Ensuring a safe and operational road transport network which contributes to the reduction in the number of road accidents as well as the reduction of journey times;
Ensuring international accessibility through the connection with the neighbour countries; and
Ensuring an environmentally friendly transport network through the implementation of by-pass schemes.
In the aftermath of the COVID-19 pandemic, EU member states had to submit National Recovery and Resilience Plans (NRRP) to receive support in the form of grants and loans from the Recovery and Resilience Facility (RRF) for the period 2021–2026. These NRRPs include targets, milestones, and investment needs. The Romanian NRRP (Ministry of Investments and European Projects, 2021[46]), approved by the Council in December 2023, amounts to EUR 28.5 billion. Under Romania’s NRRP, approximately half of the country’s RRF funding (EUR 16.3 billion) has been dedicated to measures supporting the green transition (Darvas, 2023[47]). The remaining funds are allocated to initiatives aimed at fostering social, economic, and institutional development and advancing the digital transition. Under the NRRP’s section on sustainable transport, decarbonisation and road safety (Table 1.3), one target specifically mentions the enactment of legislation for a distance-based toll system for heavy goods vehicles and increased ownership taxes for the most polluting passenger vehicles (cars, buses, coaches) by Q2 2023. A road toll for heavy trucks and a reform of the annual motor vehicle tax for cars, both incorporating pollution levels as parameters, was enacted to enter force in 2026 (Parliament of Romania, 2023[48]).
Selected targets from the Sections R1. Sustainable Transport, Decarbonisation, and Road Safety – and R1. Rail Infrastructure and Management
Note: Selected targets covering personal vehicles.
Source: Updated NRRP, December 2023 https://mfe.gov.ro/pnrr/.
Local governments are increasingly advancing efforts to develop climate-focused action plans. For instance, the municipalities of Cluj-Napoca and Suceava, along with Bucharest's Sector 2 administrative unit, are actively working on their climate neutrality action plans under the European Commission's flagship initiative, 100 Climate Neutral and Smart Cities, which aims to help cities achieve climate neutrality by 2030. Additionally, other municipalities have joined the Global Covenant of Mayors for Climate and Energy, a global coalition of cities committed to reducing GHG emissions and enhancing resilience to the impacts of climate change. These efforts underscore the growing role of local governments in addressing climate challenges and contributing to national and EU-wide climate objectives.
1.2.2. Strategic and legislative framework on air pollution in Romania
Romania’s strategic framework is largely determined by EU policy. The zero-pollution ambition for Europe was announced under the European Green Deal and is part of the European Commission’s strategy to implement the United Nations Sustainable Development Goals agenda. The EU’s strategic framework is laid out within the Zero Pollution Action Plan (European Commission, 2021[49]). The EU aims to reduce by more than 55% premature deaths caused by air pollution by 2030. Under the zero-pollution vision for 2050, air, water and soil pollution should be reduced to levels that are no longer harmful to health and natural ecosystems. At the national level, policy priorities in Romania are laid out in Law No 104/2011 on air quality, providing ambient air quality objectives for the prevention and reduction of harmful effects on human health and the environment.
Romania’s legislative framework on air quality standards is based upon the three pillars of EU air pollution policy. To date, Romania has not adopted more stringent or complementary air quality standards beyond those established at the EU level. Figure 1.9 provides an overview of the relevant EU legislation, which includes the Ambient Air Quality (AAQ) Directive, the National Emission Reduction Commitment (NEC) Directive, and sector-specific emission standards. The AAQ Directive establishes limit values for key air pollutants, either on a daily or annual basis, while the NEC Directive and sector-specific emission standards focus on setting national reduction commitments or emission limits for specific pollutants, technologies, or emitters.
Note: Source-specific emission standards refer only to examples and do not aim to provide an exhaustive list.
Source: Author’s elaboration based on European Commission (2024[50]).
The Ambient Air Quality (AAQ) Directive establishes target values aimed at ensuring effective protection of human health and ecosystems from harmful air pollution. Limit values for PM₂.₅, PM₁₀, NO₂, and SO₂ were initially adopted under Directive 2008/50/EC and later revised through Directive (EU) 2024/2881. Table 1.4 provides an overview of the limit values applicable until 2030, the newly established 2030 targets, and their alignment with the WHO Air Quality Guidelines. While the revised annual limit values remain above WHO recommendations, they represent a significant reduction compared to previous thresholds. EU member states retain the flexibility to determine appropriate policy measures to achieve these objectives.
Source: Revised target values (both long-term and short-term exposure): Commission Staff Working Document Impact Assessment Report - SWD/2022/545 final - and the corresponding Executive Summary - SWD/2022/345 final
Romania has aligned its national legislation with the EU air quality framework by transposing the provisions of the AAQ Directive into domestic law. The 2008 Directive has been incorporated into national legislation through Law No. 104/2011 of June 15, 2011, which regulates ambient air quality, and Government Decision No. 257 of April 15, 2015, which establishes the methodology for developing air quality plans, short-term action plans, and air quality maintenance strategies.
Despite the significant progress achieved under the AAQ Directive, air pollution levels in Romania remain considerably above the revised EU limits. Figure 1.10 illustrates the average annual PM2.5 concentrations and population distribution across Romanian regions in 2010 and 2022, highlighting that PM2.5 levels exceed the revised EU thresholds in all regions.
Source: Author’s elaboration from Exposure to Air pollution OECD Statistics.
Romania has faced legal action at the Court of Justice of the European Union (CJEU) due to systematic and persistent non-compliance with the AAQ Directive, following multiple infringement procedures initiated by the European Commission. In case C-638/18, the CJEU ruled that Romania had failed to meet the daily limit value for PM10 in Bucharest. Additionally, Bucharest remains subject to an infringement case for non-compliance with NO₂ limit values and failure to implement adequate air quality monitoring as mandated by the AAQ Directive.
The National Emission Ceilings (NEC) Directive constitutes the second pillar of European air pollution legislation, establishing binding commitments for EU member states to reduce emissions of key atmospheric pollutants. The European Commission adopted Directive (EU) 2016/2284, with the objective of curbing national emissions of specific air pollutants. This directive amends Directive 2003/35/EC and revises Directive 2001/81/EC, extending the NEC framework with updated commitments for the 2020–2029 period and new, more ambitious targets for 2030 onwards. The directive establishes reduction targets for five key pollutants: SO2, NOx, NMVOCs, ammonia (NH₃), and PM2.5. Table 1.5 presents Romania’s national emission reduction commitments under the current NEC Directive.
Under the NEC Directive, EU member states are required to submit annual reports on their progress towards meeting these targets (European Commission, 2016[51]). Within their National Air Pollution Control Programme (NAPCP), member states outline policy measures and strategies to achieve these targets. These programs are subject to reviews to evaluate current compliance as well as projected compliance under current measures. In Romania, Decision No. 119 of 8 February 2023 approves the National Air Pollution Control Programme.
Given the current trajectory, achieving Romania’s 2030 emission reduction objectives for NOx and PM2.5 appears ambitious, necessitating substantial policy adjustments and intensified efforts. Figure 1.11 illustrates air pollution trends for NOx and PM2.5, showing modest overall reductions in emissions. However, the most recent data indicates a reversal in progress, with emissions of both NOx and PM2.5 increasing in the last observed year. The modest reductions as well as the recent trend raise concerns about the feasibility of meeting the 2030 reduction targets, also reflected in the Review of the National Air Pollution Control Programme (Ricardo, 2023[52]). Significant policy efforts in form of a comprehensive policy package, including those beyond taxation, would be needed to reach these targets. An in-depth discussion on potential policy responses is provided in the sectoral chapters.
Source: Author’s elaboration from European Environmental Agency (2025[30]).
The third pillar of the EU’s air pollution policy consists of source-specific emission standards. These are based on specific provisions from different directives covering different sectors. The following directives are examples relevant to the sectoral scope of this analysis, focusing on the transport and buildings sector. The following section lays out examples of source-specific emission standards.
Stationary emissions from industrial facilities are regulated through a comprehensive framework of directives tailored to different combustion plant sizes. The Industrial Emissions Directive (IED) (Directive 2010/75/EU) applies to large combustion plants (>50 MWth), ensuring stringent environmental performance standards. The Medium Combustion Plant (MCP) Directive (Directive (EU) 2015/2193) governs medium-sized plants (1–50 MWth), addressing emissions from smaller industrial and energy generation facilities. Meanwhile, the Ecodesign Directive (Directive 2009/125/EC) sets emission limits for small-scale appliances such as heaters and boilers (<1 MWth), focusing on improving energy efficiency and reducing environmental impact.
The transport sector is regulated through a combination of vehicle emission standards (EURO) and fuel quality regulations. The EU Directive 2007/46/EC provides a comprehensive framework for the approval of motor vehicles, trailers, and their components, ensuring that they meet EU environmental and safety standards before entering the market. Additionally, Regulation (EC) No 715/2007 governs type approval for motor vehicles concerning emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and mandates access to vehicle repair and maintenance information. In Romania, Law No. 289/2009 transposed Directive 2007/46/EC into national legislation, aligning vehicle type-approval procedures with EU standards. This law ensures that all vehicles registered in Romania comply with Euro 5 and Euro 6 emission limits and introduced mechanisms to verify environmental and safety requirements before registration.
The Fuel Quality Directive (Directive 98/70/EC) sets minimum quality requirements for petrol, diesel, and biofuels used in road transport, as well as gasoil for non-road mobile machinery. This directive establishes strict fuel quality standards to mitigate environmental and health risks by limiting harmful air emissions such as sulphur and lead and regulating biofuel content in petrol and diesel. Furthermore, it requires Romania to monitor and report fuel quality and fuel volumes annually. Pollutants limits were gradually tightened by amendments (Directive 2003/17/EC and Directive 2009/30/EC).
This section lays out the responsibilities related to GHG emissions and air pollution across the levels of government in Romania. Emissions are separated into stationary source emissions and non-stationary source emissions (see definitions in the previous section). For stationary sources, the analysis will focus on energy use in residential buildings. For non-stationary sources, the analysis concentrates on road transport and personal vehicles in particular (i.e. vehicles for individuals with no commercial purpose).
1.3.1. Stationary sources: Energy use in residential buildings
This section maps the responsibilities of each level of government regarding GHG and air pollution emissions from stationary sources focusing on emissions from energy use in residential buildings. Responsibilities are identified by examining the responsibilities of each level of government.
In the environmental domains of climate change mitigation and air pollution, responsibilities are shared competences between the EU and its member states, as outlined in Article 4 of the Treaty on the Functioning of the European Union (TFEU). Articles 11 and 191 to 193 of the TFEU establish the EU's role across various domains, including air and water pollution, waste management, and climate change, all aimed at promoting sustainable development. EU action is constrained by the principle of subsidiarity and the requirement of unanimity in the Council for specific matters such as fiscal policies, urban and rural planning, land use, water resource management, and energy choices (Article 192, TFEU). Member states retain the right to adopt more stringent protective measures than those established under EU policies, provided they align with the Treaty and are notified to the European Commission (Article 193, TFEU).
EU energy policy is set out in Article 194 of the TFEU, which include ensuring the functioning of the Energy Union, securing the energy supply within the Union, promoting energy efficiency and the development of renewable energy, and advancing the interconnection of energy networks. Measures to achieve these goals must be developed in consultation with the Economic and Social Committee and the Committee of the Regions. However, EU energy policy respects member states' sovereignty over their energy sources and the overall structure of their energy supply, as specified in Article 194 of the TFEU. Additionally, any fiscal measures in this domain require unanimity in the Council.
At the national level, the Romanian Constitution provides the general framework for the organisation and functioning of public administration, with the specific responsibilities for environmental and energy sectors being detailed in sector-specific legislation. Table 1.6 provides an overview of the responsibilities related to energy use in buildings across levels of government. The administrative structure implementing the national climate change mitigation and environmental policies consists of several ministries and institutions with various responsibilities.
In Romania, the Ministry of Environment, Water, and Forests is the national authority responsible for environment and climate policies. The ministry is responsible for setting national environmental policy, developing regulatory frameworks, and coordinating compliance with the EU environmental and climate goals. Under the coordination of the Ministry of Environment, Waters and Forests, the National Environmental Protection Agency (NEPA) is the central institution responsible for implementing environmental protection policies and regulations in Romania.
The Environmental Fund Administration collects funds from environmental fees and ensures that these are directed toward achieving Romania’s climate and environmental objectives. The Environmental Fund is an economic and financial instrument intended to implement projects for environmental protection and support the achievement of the EUs environmental and climate change mitigation objectives. The Environmental Fund is made up of the taxes, contributions and amounts required under art. 9 para. (1) lit. a)-aa) of Government Emergency Ordinance no. 196/20055. Examples are taxes for emissions of pollutants into the atmosphere, owed by economic operators owning stationary sources whose use affects environmental factors.6
The Interministerial Committee on Climate Change (CISC) is the main inter-institutional coordination platform in Romania in the field of climate change and energy transition. The CISC was established by Government Decision No. 563/2022, with the aim to fulfill milestone 413 of the NRRP7. It is a consultative body, led by the Prime Minister of Romania, which brings together all public institutions with responsibilities for the development and implementation of policies with an impact in the field of climate change.
Source: Author’s elaboration based on the following sources. For the Ministry of Environment, Water and Forests information is based on Decision No 43/2020 of the Romanian Government on the organisation and functioning of the Ministry of Environment, Water and Forests published in Monitorul Oficial al României, no 55, of 28 January 2020. For the Environmental Fund Administration, information is based on the Government Emergency Ordinance no. 196/2005 on the Environment Fund, approved with amendments and completions by Law no. 105/2006.
The implementation of the National Air Pollution Control Programme is shared among several ministries, and co-operation among ministries is not clearly defined. While the Ministry of Environment, Water, and Forests is the competent authority responsible for drawing up the programme, it also includes the Ministry of Energy, The Ministry of Economy, the Ministry of Transport and Infrastructure, the Ministry of Public Works Development and Administration, and the Ministry of Agriculture and Rural Development (National Air Pollution Control Programme, 2023[53]). These ministries are responsible for monitoring and implementing the policies, for the specific areas of activity.
Energy related responsibilities are shared among the Ministry of Energy, the National Energy Regulatory Authority and the Ministry of Development, Public Works, and Public Administration, and the Ministry of Finance. The Ministry of Energy is responsible for national energy policy and strategic planning, and the National Energy Regulatory Authority (ANRE), which regulates energy markets and ensures fair competition. Local authorities have supporting roles in implementing local energy initiatives and integrating renewable energy at the community level. Responsibilities related to energy use in buildings are laid out in Law No. 372/2005, which tasks the Ministry of Development, Public Works, and Public Administration with promoting energy efficiency in the building sector, advancing the construction of nearly zero-energy buildings, supporting local authorities in implementing building energy policies, and ensuring compliance with national and EU energy efficiency targets. The State Inspectorate in Constructions (SIC), operating under the authority of the Ministry of Regional Development and Public Administration, is responsible for overseeing the quality and legal compliance of construction activities and verifying compliance with energy performance requirements for both new buildings and renovation projects, as well as the inspection of heating and cooling systems, in line with national and EU legislation. The Ministry of Finance, following the Fiscal Code, is the responsible authority for designing, implementing, and enforcing tax legislation, such as excise taxes or value added tax (VAT) on energy products. A newly established Green Tax Unit within the Ministry of Finance aims to co-ordinate on environmental tax matters both within the Ministry of Finance and across other ministries. Local authorities contribute by enforcing building codes, monitoring compliance, and implementing local renovation programmes.
1.3.2. Non-stationary sources: Road transport
The analysis for non-stationary source emissions focuses on road transport. The following section reviews the competence at the EU, national, and sub-national levels (see Table 1.7 for an overview).
Source: Responsibilities of the Ministry of Transport and Infrastructure are defined in the DECISION No. 90 of January 28, 2020 on the organisation and functioning of the Ministry of Transport, Infrastructure and Communications. For the National Company for Road Infrastructure Administration, responsibilities are described in the STATUTE of September 18, 2003. Responsibilities of the Ministry of Environment, Waters and Forests are outlined in the Government of Romania Decision No. 43/2020 on the organisation and functioning of the Ministry of Environment, Waters and Forests. Lastly, for Counties and Municipalities and Cities responsibilities are described in the DECISION No. 90 of January 28, 2020.
Transport is a shared competence between the EU and its member states (Article 4 of the TFEU). The EU's authority over transport by rail, road, and inland waterways is governed by Title VI of the TFEU, which spans Articles 90 to 100. Under Article 90, the EU is empowered to establish a common transport policy. Common transport includes (as specified in Article 91) common rules applicable to international transport or transport involving one or more member states, conditions under which transport service providers from non-EU countries may operate within a Member State, measures to enhance transport safety, as well as additional provisions deemed necessary for achieving the objectives of the common transport policy.
In relation to intra-EU transport, the TFEU also prohibits discriminatory practices. According to Article 95, it is forbidden to apply different rates or conditions for the carriage of identical goods over the same mode of transport. Furthermore, Article 97 ensures that charges or fees associated with crossing frontiers must remain reasonable and proportionate to the actual costs incurred.
The distribution across the levels of governments in Romania are described in different legislative documents that each describe the organisation of the relevant ministry. The Romanian Constitution provides no details on the distribution of responsibilities across levels of government. The Ministry of Transport and Infrastructure formulates and implements national transport policies and strategies, ensuring alignment with EU and international regulations. It has the exclusive responsibility for the development, administration, and maintenance of national roads, highways, railways, airports, and waterways, and plans and executes large-scale national transport infrastructure projects funded by state budgets or EU grants. The ministry also establishes national transport standards, including safety, emissions, and technical requirements. The Administrative Code8 allows for delegation of certain responsibilities from the central government to local and county authorities, depending on financial and technical capacity (e.g., maintenance of certain national roads can be delegated to county councils). Local authorities can collaborate with county councils to address shared transport challenges.
Other ministries have specific responsibilities for non-stationary emission sources. The Romanian Ministry of Environment, Waters, and Forests has a coordinating role and ensures that environmental considerations, such as emission reductions, are incorporated into transport sector strategies (Government Decision No. 43/2020). Similar to responsibilities for stationary emission sources, the Ministry of Finance is the responsible authority for designing, implementing, and enforcing tax legislation.
This section provides an overview of the role of existing tax policies on GHG emissions and air pollution within the broader policy mix in Romania. As for the previous section, emissions are separated between stationary sources and non-stationary sources. The stocktake reviews relevant tax and non-tax policies, covering updates until November 2025. This section also provides an overview on environmentally related tax revenues and on effective carbon rates across sectors. A comprehensive list of environmental taxes beyond the two sectors is provided in Annex A, Table A A.1.
Environmentally related taxes raise the cost of polluting products or activities and thereby discourage their consumption and production, regardless of the tax’s stated purpose. Environmental taxes are instruments explicitly designed to protect or improve the environment, whereas environmentally related taxes are defined by a tax base linked to environmentally harmful activities, irrespective of whether environmental protection is the primary policy objective (OECD, 2010[54]). They are part of a broader policy mix that also includes fees, subsidies, tradable permits, deposit-refund schemes, and voluntary approaches. The main environmentally related tax bases include energy products, including vehicle fuels, motor vehicles and transport services, measured pollution emissions to air and water, waste management, noise, and ozone-depleting substances, natural resource use, including water, land, forests, biodiversity, and fish stocks. These taxes apply across multiple environmental domains, such as climate change, air pollution, biodiversity, circular economy, and natural resource management. Despite their growing importance (see Annex A, Table A A.1 for a complete list), Romania has not yet adopted a formal definition of environmentally related taxes.
Romania’s environmentally related tax revenue largely consists of energy tax revenues. Overall, environmentally related taxes in Romania made up around 1.9% of GDP in 2022 (Figure 1.12). Energy taxes (incl. vehicle fuels) accounted for approximately 92.0% of it. In contrast, transport-related tax bases (excl. energy) contributed a modest 7.8%, while pollution-related taxes represented a negligible 0.1%. The heavy reliance on energy taxation indicates a narrowly focused environmental fiscal framework that may not fully capture the broader spectrum of environmental externalities. Broadening the tax base and increasing tax rates for pollution-related taxes could enhance revenue generation, foster sustainable practices, and better align Romania’s environmental fiscal policy with EU best practices.
Source: Author’s elaboration based on OECD (2025[55]).
Beyond GHG emissions and air pollution concerns, it is worth nothing that unlike many other OECD and EU member states, Romania currently does not tax resources, e.g. by taxing extraction, abstraction, harvesting, including freshwater resources, forest resources (e.g. timber), fisheries resources, natural biological resources (e.g., wild plants and animals), minerals (excluding oil and natural gas; including exploration activity), and landscape changes (e.g., cutting of trees) (OECD, 2023[56]).
The need for fiscal reform in Romania has become urgent. Romania’s general government deficit rose to 9.3% of GDP in 2024, driven by substantial increases in public sector wages and pension outlays (EU, 2025[57]). Romania has been subject to the EU Excessive Deficit Procedure (EDP) since 2020, requiring the submission of a credible, multi-annual fiscal adjustment plan to reduce the deficit below the EU’s reference threshold of 3% of GDP. EU finance ministers approved Romania’s National Medium-Term Fiscal-Structural Plan (MTP), which aims to bring the deficit below the 3% ceiling by 2031 (European Commission, 2024[58]). The Romanian Parliament adopted a fiscal consolidation package at the end of 2024, estimated to be worth approximately 2% of GDP. The consolidation measures included a nominal freeze on public wages and pensions, as well as revenue measures amounting to 0.3% of GDP (EU, 2025[57]). As a result, the deficit is projected to decline to 8.6% of GDP in 2025 and, under unchanged policies, to 8.4% in 2026 (EU, 2025[57]).
Romania’s National Medium-Term Fiscal-Structural Plan includes plans to amend the current Fiscal Code (European Commission, 2026[59]; European Commission, 2024[60]). The objective is to reduce or eliminate certain tax incentives. The plan also proposes extending environmental taxes to better reflect the environmental costs of certain activities, however without mentioning explicit taxes or proposals. The MTP estimates that a tax reform will lead to an increase in government revenue of 1.1% of GDP in 2025, net of the impact from increasing the tax-free portion of pensions. To achieve this target, new measures were implemented in 2025, resulting in an estimated full-year increase in government revenue by 1.7% of GDP.
In June 2025, the European Commission issued a recommendation concluding that Romania missed to take effective corrective action (European Commission, 2025[61]). As a result, the Commission is obliged to suspend payments or commitments under the European Structural and Investment (ESI) Funds and the Recovery and Resilience Facility (RRF). In response, in July 2025 the Romanian Government published a draft law outlining a package of fiscal reforms.
Environmentally related taxes can contribute to raising fiscal revenue but need to be carefully designed. To analyse and design a potential environmentally related tax reform taking stock of existing measures is key to this report. Relevant measures, including the proposed increase in the VAT rate on energy products, are therefore discussed in the section below.
1.4.1. Stationary sources: Energy use in residential buildings
This section provides an overview of existing tax and non-tax policies that are related to GHG emissions and air pollution from energy use in the building sector in Romania. In Romania, tax policies applicable to the residential building sector form part of a broader policy mix that also includes energy labelling, performance standards, and subsidies. Table 1.8 presents the current tax policies applicable to the residential building sector, while Table 1.9 lays out related non-tax policies, such as subsidies, performance standard, and energy labelling. The stocktake builds on the structure and policies included in the (OECD, 2024[62]).
Note: The exchange rate refers to the average rate in 2024 of 4.97. The analysis covers updates to the legal framework until November 2025. (*) Note that excise duties on energy products increased in January 2026.
Source: Author’s elaboration.
As part of the EU’s Fit for 55 legislative package, the EU has introduced a new Emissions Trading System (EU ETS2) to complement the existing ETS scheme (Directive (EU) 2023/959). The EU ETS2 targets emissions from road transport and buildings. Upstream fossil fuel suppliers will be required to surrender allowances equivalent to the emissions generated by sold fuels used in activities covered by ETS2. The new system has begun with the monitoring and reporting phase in 2025, followed by the start of emissions trading in 2028 (European Council, 2025[63]). ETS2 is structured as a cap-and-trade mechanism without free allowances, under the expectation that costs will be passed through to consumers via higher fossil fuel prices. To address this, revenue from the ETS2 will finance the Social Climate Fund (SCF) — in force and running as of 2026 — to support vulnerable households and investments under member states’ Social Climate Plans (EEA, 2026[64]). The SCF will run from 2026 to 2032 to allow member states early access to revenue before the ETS2 is active. This will allow the potential impacts to be anticipated and mitigated early. It is expected that a total of EUR 65 billion will be raised for the SCF from revenue from both the ETS2 and the ETS1. This will be complemented by at least 25% national co-financing, mobilising at least EUR 86.7 billion in total by 2032. The ETS2 cap is set to achieve a 42% reduction in emissions from buildings and road transport by 2030 compared to 2005 levels. The scope of ETS2 covers a broad range of fuels, including petrol, gas oil, kerosene, LPG, natural gas, heavy fuel oil, coal, and coke, as defined in Article 2(3) of the Energy Taxation Directive. Peat, waste, solid biomass, and charcoal are currently excluded.
The increase of household’s energy and transport prices due to the ETS2 would be addressed through several complementary measures. The SCF focuses on structural investments that address the root causes of energy and transport poverty, reduce fossil fuel dependence and strengthen long-term resilience; it also allows some funding for short-term direct support (up to 37.5% of resources are available for temporary direct income support). Romania will be one of the largest beneficiaries of the SCF funding (Bertelsmann Stiftung, 2026[65]). Other EU funds, such as the Modernisation Fund, Just Transition Fund, European Structural and Investment Funds, Recovery and Resilience Facility and InvestEU, as well as national or regional funding and ETS1 and ETS2 revenue distributed to member states can also be used for climate action with a social dimension. In National Social Climate Plan member states lay out national measures to addresses the distributional impacts. In Romania, the Ministry of Investment and European Projects is responsible for establishing and implementing the plan, which was due in June 2025. To limit price volatility at the EU-level, the system will include a rule-based market stability reserve (MSR), allowing the release or withdrawal of allowances based on market conditions (Council of the European Union, 2026[66]). During the initial implementation phase (2028–2030), the European Commission aims at maintaining prices below EUR 45 per tonne of CO₂ in 2020 prices. However, if member states do not accelerate emissions reductions in the covered sectors, an ex-ante study by Günther et al. (2025[67]) shows that carbon prices could vary between EUR 71 EUR and EUR 261 EUR per tonne of CO2 in 2030 under given assumptions. Price variations will depend on the stringency of energy efficiency and renewable energy policies in member states.
Romania levies an excise duty rate on energy products used in residential building (Law no. 227/2015 on the Fiscal Code Title VIII – Section 6, Art. 355; Exceptions Art. 394 et seq.). The excise tax rates levied in Romania are close to the minima set by the EU Energy Taxation Directive (European Commission, 2025). Exemptions include the energy products natural gas, coal and solid fuels used for household heating, as well as firewood (Fiscal Code, Art. 399). The main objective of excise duties on energy products is to generate revenues to the state budget. The tax revenue from excise duty is administered by the Ministry of Finance and goes into the state budget. In 2023, the revenue from excise duty on energy products made up 4.2% of the total annual tax revenue (European Commission, 2024[68]). The National Tax Authority acts as the administrating authority of the duty, of which revenues are not earmarked.
In addition to excise duties, energy products are also subject to a VAT, including reduced rates and exemptions (Fiscal Code TITLE VII, Chapter VIII, Art. 291). Until 31 July 2025, a standard rate of 19% VAT applied to the consumption of energy products, with certain reductions and exemptions. Firewood for heating were taxed at the reduced rate of 5% before the VAT reform. On 3 July 2025 the Romanian Government published a draft law, announcing a fiscal reform that includes VAT rate increases. The standard rate rises to 21% while the reduced rates of 5% and 9% both rise to 11%. Similarly to the excise duties on energy products, revenues are administered by the Ministry of Finance and are not earmarked. Following the European Commission Council Directive on the common system of the VAT (Council Directive 2006/112/EC), EU countries will no longer be allowed to provide reduced VAT rates on fossil fuels and energy sources with similar impacts on GHG emissions, such as peat and firewood, after January 2030.
Reduced VAT rates were available for the installation of specific low-carbon technologies until August 2025 (Fiscal Code TITLE VII, Chapter VIII, Art. 291). A reduced rate of 9% applied to solar panels, heat pumps, and PV. The reduced VAT rate also applied to solid fuel boilers, continuing to incentivise the use firewood as a main heating source. However, as of 1 August 2025, these supplies were removed from the reduced rate list by Law no. 141/2025 and are now subject to the standard VAT rate of 21%.
Some municipalities apply a reduced property tax rate if buildings meet certain energy efficiency criteria (Fiscal Code Title IX, Chapter II, ART. 456). So far, a reduction of the property tax rate for energy efficient buildings is only available in the cities of Cluj-Napoca and Zalău, while the city of Iași implemented the reduction only from 2019 to 2021. In Cluj-Napoca, for example, owners of buildings rated as category A under the mandatory Energy Efficiency Certificates and certified under either of three Standards, LEED, BREEAM, and DGNB, can since 2013 apply for this 50% tax break, reducing the property tax substantially.
In Romania, tax policies applicable to the residential building sector form part of a broader policy mix that also includes energy labelling, performance standards, and subsidies. Table 1.9 summarises the main non-tax policy measures currently in place targeting energy use in the residential building sector.
Note: The analysis covers existing policies as of November 2025.
Source: Author’s elaboration.
The EU Ecodesign regulation establishes requirements for product sustainability in the EU market. This framework aims to reduce energy use and environmental impacts across the product life cycle by specifying minimum Ecodesign requirements. Together, these regulations form a coherent set of Ecodesign standards that guide product manufacturers and support energy efficiency objectives across the residential and tertiary sectors.
The Ecodesign Directive (2009/125/EC): defining minimum energy efficiency conditions and pollutant emission limits for products placed on the market, such as air heating products, cooling products, high temperature process chillers and fan coil units.
The Energy Labelling Directive (2010/30/EU): for any product related to energy, providing information on its consumption level and performance.
The Revised Ecodesign Regulation (2024/1781/EU): includes an extension in the scope, covers the entire life cycle of covered products. Within this framework, certain minimum requirements are imposed. One of the changes is that the Ecodesign Directive 2009/125/EC ("Ecodesign Directive") was replaced by the “Ecodesign Regulation”. It applies directly in every EU member state, and there is no need for transposition into national law.
The energy and insulation requirements or buildings under the EU EPBD apply to buildings, parts of buildings and constructions. Regulated entities, are those engaged in property development, whether they are households, firms, or governmental agencies. In Romania, these provisions are transposed through Regulation Mc 001 – the Methodology for Calculating the Energy Performance of Buildings – which establishes minimum energy performance requirements for new buildings, including nearly zero-energy buildings (NZEBs), as well as for major renovations, with thresholds differentiated by building type (Regulation Mc001, 2022[69]).
Another measure under the EU EPBD is the requirement for energy performance certificates (EPCs) for new and existing buildings. EPCs are energy performance ratings of buildings and a key tool for informing about the efficiency of buildings and for steering the real estate market towards greener, more energy-efficient properties. The EPBD requires the implementation of EPCs for new and existing buildings. EPCs became mandatory for new buildings, as well as for buildings that were sold or rented, starting in 2007. Romania implemented the EPBD through the adoption of the Law No. 372/2005 on the energy performance of buildings, which was later updated to align with the EU directives. The 2024 revision of the EPBD Directive introduces a single EU-wide energy rating scale from A, the net-zero emission standard to G, worst performing. An optional A+ class is foreseen for buildings with energy use at least 20% below the zero-emission threshold. This harmonised system aims to facilitate cross-border comparison, promote energy efficiency investment, and accelerate the renovation of worst-performing buildings.
The energy quota obligation requires electricity suppliers and producers to increase their share of renewables (Law No. 220/2008, Official Gazette no. 743/ 03 Nov. 2008). The Energy Regulatory Authority (ANRE) is responsible for determining electricity companies obliged to meet the quota. Gradually increasing, this quota level was set at 20% of renewables in 2020.
The Green House programme is a state support specifically for extending the use of photovoltaic installations in Romania. The “Casa Verde Photovoltaice” programme provides a subsidy of up to RON 30 000 (EUR 6 003.609) for PV acquisition and installation, whereby a small contribution from households is a requirement. The programme is renewed annually and has continuously increased its budget over the years since its implementation through Order 1287/2018 in 2018. The performance of the program is measured by GHG reduction induced by the photovoltaic installations.
In 2025, a draft law was published on the launch of a "Scrap for Stoves" Program. The subsidy, initially launched as a pilot programme in March of the same year, is targeting citizen in the 834 mountainous localities of some 27 municipalities, supporting the purchase of home heating appliances for more rural areas (Order no. 606 of March 04, 2025 for the approval of the Financing Guide of the Program on providing support for the purchase of home heating appliances, for localities in the mountain area). Which areas are deemed mountainous is defined in the Mountain Law No. 197/2018. Eligible stoves include those burning biomass, if these comply with the EcoDesign Directive of >80% efficiency and a particulate matter threshold below 40mg/m3. 70% of the expense and a maximum of RON 10 000 (EUR 2 012.07) of expenses can be covered, in exchange for an old coal or wood stove.
The house heating support is intended to cover a share of the costs heating for low-income households (Law no. 226/2021 (Romanian Government, 2021[70])). The main eligibility requirement is to have a net monthly income below a certain level: The average income per family member must be below RON 1 386 (EUR 278.87), or for single persons below RON 2 053 (EUR 413.07). The benefit is also calculated based the type of heating system. The percentage compensation is 100% for the beneficiaries with the lowest incomes and at least 10% for those whose incomes are at the maximum limit. The reference values to which the percentage compensation applies are:
Heating with natural gas: RON 250 (EUR 50.30) per month;
Heating with electricity: RON 500 (EUR 100.60) per month;
Heating with solid or liquid fuels: RON 320 (EUR 64.39) per month;
Centralised heating: the reference value is established on a monthly basis taking into account the average consumption of the population and the local price of the thermal energy.
These benefits are allocated during the cold season, from 1 November to 31 March. Energy suppliers deduct the amounts of the heating aid from the invoice certifying the value of the monthly consumption.
An energy consumption support aims at covering part of the household's energy consumption throughout the year households (Law no. 226/2021). This benefit can be combined with the house heating support as well as the support for the purchase, within a dwelling, of energy-efficient equipment (described below). The average monthly net income up to which the energy supplement is granted is RON 1 386 (EUR 278.87) per person for a family, and RON 2 053 (EUR 413.08) for a single person. The amounts of the support are as follows:
RON 10 (EUR 2.01) per month for thermal energy consumption (centralised heating);
RON 10 (EUR 2.01) per month for natural gas consumption;
RON 30 (EUR 6.04) per month for electricity consumption;
RON 20 (EUR 4.02) per month for the consumption of solid or liquid fuels;
RON 70 (EUR 14.08) per month if the household uses only electricity as a source of heating.
Introduced in response to the 2022/2023 energy crisis, the Romanian energy price caps set price limits on electricity and natural gas prices until June 2025 (Emergency ordinance (OUG) 119/2022; Emergency Ordinance No. 6/2025 extended the caps). The caps were designed to protect Romanian households from spiralling costs due to the energy crisis triggered by Russia's war of aggression against Ukraine and are untargeted. The Romanian energy price cap was staggered across monthly consumption volumes of electricity. Until 100kWh electricity consumption, the price is capped at RON 0.68 (EUR 0.14) per kWh, between 100.01 and 255 kWh it is RON 0.8 (EUR 0.16) and finally a maximum price of RON 1 (EUR 0.20) until 300kWh applies. All natural gas consumption however is capped at a steady maximum RON 0.31 (EUR 0.06) per kWh, with VAT included. According to GEO 6/2025, electricity prices were capped until June 30, 2025 and the instrument is no longer operational.
1.4.2. Non-stationary sources: Road transport
This section provides an overview of existing tax and non-tax policies that are related to GHG emissions and air pollution from non-stationary sources in Romania, focusing on road transport. In Romania, tax policies applicable to the transport sector form part of a broader policy mix, discussed in the section below. The stocktake of non-stationary sources follows the same structure as for stationary sources and builds on OECD (2024[62]). Table 1.10 presents the current tax policies applicable in road transport.
Unlike most EU countries, Romania does not impose a vehicle acquisition tax on all vehicles. Instead, the country has implemented a purchase tax on luxury vehicles, a recurrent vehicle ownership tax, an excise duty on energy, and a vignette system for road usage. Additionally, Romania has a well-established vehicle scrapping programme, which incentivises the replacement of older vehicles based on criteria such as European emissions standard, fuel type, and vehicle age.
Note: The analysis covers updates to the legal framework until November 2025. (*) Note that excise duties on certain products increased in January 2026.
Source: Author’s elaboration.
Energy excise duties (“Accize pentru produse energetice”) are levied on all energy types consumed in the transport sector. As of November 2025, the tax rate is set at RON 3.27 (EUR 0. 66) per litre for gasoline, RON 2.55 (EUR 0.51) per litre for diesel, RON 18.81 (EUR 3.78) per GJ for natural gas and 3.62-7.24 (EUR 0.73-1.46) per kWH for electricity. Historically, the rates have been relatively low compared to the minimum levels permitted under the European Tax Directive (ETD and have been increasing since 2024. They are now close to the EU average (see Figure 1.13). The law adopted in July 2025 to improve the budget schedules a 20% increase for 2026 compared to the beginning of 2025 (Romanian Government, 2025[71]). The administrating authority is the Ministry of Finance and revenues are not earmarked (PINE, 2024[72]).
Note: Energy taxation includes fuel excise taxes and carbon taxes; tax rates as of November 2025
Source: Author’s elaboration based on European Commission (2025[73])
Over past years, the Government of Romania regularly enacted temporary support for energy purchases in the transport sector for diesel consumed by trucks. During the energy price crisis, gasoline and diesel sellers receive a compensation of RON 0.25 (EUR 0.05) per litre from the state budget in case they grant a price reduction to final consumers of RON 0.5 (EUR 0.10) per litre. The measure was initially adopted from July to September 2022, but later extended until the end of 2022 (Romanian Ministry of Energy, 2022[74]). Additionally, a support for diesel used by freight transport vehicles has been enacted in 2024 of RON 0.2 (EUR 0.04) per litre. More recently, a refund was granted from October to December 2025 at a similar level and raised to RON 0.6 per litre for January to March 2026. This refund program is administrated by the Ministry of Finance and is implemented by the Romanian Road Authority. It aims to address energy prices increases (including through taxation) and avoid fuel tourism in neighbour countries.
The VAT on energy products used in road transport is levied at the standard rate and no reductions apply. As for vehicles’ purchase and maintenance costs, the energy prices are fully deductible for fuel consumed by company vehicles when fully used for business purposes. If not fully used for business purposes, limited deductibility of VAT (50%).
The forthcoming EU ETS2 will cover transport sector emissions, with accompanying support for green transition and low-income households. The aim is to attribute 75% of the revenues from auctions to national governments to finance public investments such as public transport, public procurement for greening the fleet owned by administration, EVs charging infrastructure, cycling infrastructure and rail. The Social Climate fund will be funded by twenty-five percent of the revenues to mitigate the impact on households and micro-enterprises, such as through support for EVs leasing schemes, subsidies for public transport or targeted and time-limited subsidies for low-income drivers.
The scrappage programmes offer subsidies for the purchase of a new electric (“Rabla Classic”) or fuel efficient (“Rabla Plus”) cars when accompanied by scrapping one or two cars that have been registered in Romania for at least six years. The subsidy amount increases with the environmental performance of the new car, as well as with the number, age and pollutant emission levels of the scrapped old vehicles. “Rabla Classic”, which was implemented in 2005, and finances the purchase of new thermic cars, with a bonus for those emitting less than 120 g/km, against the scrappage of at least one car over 8 years. “Rabla Plus” started in 2016 and focuses on supporting the uptake of fully electric or plug-in hybrid electric vehicles in case of scrappage of a car over 6 years. These grants, which are some of the largest electric vehicles (EV) purchase grants in Europe, are available for both private households and firms. An additional voucher is available with the scrappage of a second old car. The Ministry of Environment administers both programs, which are financed by the Environment fund, as well as partly by the European Regional Development Fund (ERDF) for “Rabla Plus”.
A luxury car tax (“impozitul special pe bunurile imobile și mobile de valoare”) entered into force in 2024. The tax is levied for the first five years of ownership of such cars following the registration in Romania. The tax rate is set at 0.3% of the price above RON 375 000 (EUR 75 452.72).
VAT is levied on the purchase of vehicles, which is fully deductible for corporate vehicles when fully used for business purposes. The standard rate of 19% (21% from August 2025 onwards) applies to the supply of vehicles purchased. Also, a special VAT regime is applicable for second hand vehicles (VAT is calculated on the profit margin). The VAT is fully deductible for corporate vehicles, such as heavy-duty trucks used for freight. If the car is used for both business and private purposes, 50% of the VAT can be deducted.
Romania implemented several taxes on imported cars between 2007 and 2017 which have been considered unconstitutional by the Court of Justice of the European Union (CJUE). The Environmental Stamp Duty ("Timbrul de Mediu pentru autovehicule”) was the latest tax, implemented between 2013 and 2017 (Government of Romania, 2013[75]). This duty was levied on new and second-hand cars at the time of their first registration in Romania. The formula was complex, varying by CO2 emissions, European emission standards and cylinder capacity, the most emitting and bigger vehicles being more taxed. Additionally, a discount rate increasing with the age of the vehicle was applied. The CJEU found that the duty violated the EU rules on free movement and non-discrimination (Article 110 of the Treaty on the functioning of the EU), as imported cars were treated differently from cars available in Romania. While the duty exempted the transfer of ownership for second-hand vehicles already registered domestically, it applied to second-hand vehicles imported from other EU member states at the time of their registration. This discrepancy created a competitive advantage for vehicles already on the Romanian market, as it discouraged importing similar vehicles from abroad.
The tax on means of transport ("Impozitul pe mijloacele de transport") is an annual tax on cars and will vary with air pollution emission levels as of 2026. The tax has been introduced in 2004 and its calculation depends on vehicle type (i.e. motorcycles, cars, buses, and trucks). For trucks the rate varies by weight and axle count. For cars, the tax varies according to engine capacity, and, as of 2026, by European emission standards in line with the National Recovery and Resilience Plan (PNRR) (Green report, 2025[76]). Until the end of 2025, a half rate is offered for plugin-hybrid vehicles, and an exemption for battery electric vehicle (BEV). Since 2026, a small tax is levied on BEV (c.a. EUR 8 per vehicle) and the reduction for PHEV has been lowered to a 30% discount.
All drivers on Romanian roads are required to pay a fixed road use charge via a vignette system (“Rovinieta”). Implemented in 2002, the charge varies based on vehicle type (e.g., car, light-duty truck, heavy-duty truck, bus), and validity period (e.g. 1 day, 7 days, 30 days, 90 days, or 12 months). The rovinieta pricing structure varies with weight and axle number for trucks to reflect the vehicle’s impact on road infrastructure. No environmental parameter is included as of the end of 2025.
An ambitious reform of the vignette has been legislated in 2023 to better reflect vehicle-related externalities for trucks. Starting from 2026, the taxation should be differentiated according to additional parameters according to the law 2023/226 (Parliament of Romania, 2023[77]). For heavy trucks, i.e. trucks with a gross permissible weight higher than 3.5 tons, a toll system called TollRo will enter in force in substitution to the vignette. TollRo will be based on kilometres driven, which will be a more accurate proxy than the duration for GHG emissions and road damage. Additionally, TollRo will be interoperable with similar systems in other EU member countries. Romania has postponed TollRo to July 2026 in order to finalise the deployment of the infrastructure (libertatea, 2025[78]).
The tax treatment of company car provides no environmental incentive. The benefit in kind for personal use of a company car is calculated at a flat 20.4% annually prorated to the number of km driven for personal use if the vehicle is employer-owned or based on the rental fee if leased through a third party. In addition to lower the cost of owning and driving a car, the BIK treatment does not consider fuel type or CO2 emissions as a criterion in Romania.
In Romania, tax policies applicable to the transport sector form part of a broader policy mix, that includes non-tax policies like regulations and public investments. Table 1.11 summarises the main non-tax policy measures currently in place in the transport sector.
Note: The analysis covers existing policies as of November 2025.
Source: Author’s elaboration.
Law 155/2023 plans the implementation of low emission zones (LEZs) in several Romanian cities (Parliament of Romania, 2023[79]). LEZs are restricted areas for vehicles complying with certain Euro emissions standards. The local authority is responsible for determining the restrictions and whether the access can be free or granted with a fee. In the latter case, at least 75% of the revenues must be recycled for air quality improvement and sustainable mobility projects. The designs are currently under development in the 13 cities10. Bucharest’s LEZ is the most advanced and foresees the entry in force in 2027. The cost of the Bucharest LEZ is projected to EUR 15 million, funded through the EU National Recovery and Resilience Plan (PNRR), and an InvestEU loan. Under the current proposal, vehicles up to Euro 2 standards would be banned and a pollution vignette would be required for the Euro 3 or Euro 4 (Profit, 2025[80]).
Romania also has an ambitious plan for deploying EV charging stations. Romania committed to the deployment of 30 000 charging stations by 2026 under the National Recovery and Resilience Plan (PNRR), with a budget of over EUR 1.6 billion. The environmental fund administration is responsible for part of deployment through support to local authorities and private operators with grants covering up to 80% of eligible costs. Financing can go up to EUR 2 500 or EUR 30 000 depending on the capacity of the chargers.
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← 1. A substantial body of literature estimates the economic damages of climate change and the resulting social cost of carbon (Burke et al., 2023[81]; Moore et al., 2024[84]). The social cost of carbon represents the estimated present discounted value of present and future economic damages from emitting one tonne of CO₂ into the atmosphere today. Estimates vary considerably due to different modelling assumptions, for example, how much future consumption is valued compared to current consumption, and which set of damages is considered.
← 2. Welfare cost estimates reflect premature mortality only, based on the value of a statistical life and the number of deaths attributable to exposure to PM2.5. They exclude morbidity effects (e.g. productivity losses, treatment costs, and willingness to pay to avoid illness) as well as non-health impacts (e.g. damage to buildings, agriculture, and ecosystems). As a result, the total social cost of fine particulate exposure exceeds the reported mortality costs (OECD, 2020[11]).
← 3. For non-residential buildings, the EPBD introduces minimum energy performance standards, requiring the renovation of the 16% worst-performing buildings by 2030 and 26% by 2033. Certain building categories, such as heritage buildings and holiday homes, may be exempted.
← 4. The TEN-T policy is based on Regulation (EU) 2024/1679 (European Union, 2024[83]). The regulation defines the network and sets out the requirements for our infrastructure to ensure a coherent quality throughout the EU.
← 5. Approved with amendments and completions by Law no. 105/2006, with subsequent amendments and completions.
← 6. The amounts are specified in Annex No. 1 of Government Emergency Ordinance no. 196/2005 on the Environmental Fund, approved with amendments and completions by Law no. 105/2006.
← 7. In particular it related to “Reform 2. Strengthening coordination at the Center of Government through an integrated and coherent approach to climate change and sustainable development initiatives, Component 14. Good governance” of the NRRP.
← 8. Article 75 of the Emergency Ordinance No. 57 of 3 July 2019 on the Administrative Code (consolidated text, Official Gazette of Romania no. 555 of 5 July 2019, as amended).
← 9. The exchange rate refers to the average rate in 2024 of 4.97 and is applied throughout the chapter.
← 10. The cities include Bucharest, Brașov, Cluj‑Napoca, Constanța, Craiova, Iași, Ploiești, Timișoara, Galați, Bacău, Brăila, Pitești, Baia Mare.