State Aid Scheme to Support Advanced Biofuels Production in Romania

(Energy Industry Review) The European Commission approved on October 4, 2024, a state aid scheme worth EUR 500 million to support investments in the production of advanced biofuels in Romania. To support this investment measure, the Ministry of Energy will request funding from the Modernization Fund resources at the Spring 2025 Investment Committee meeting. In this regard, the Ministry has already prepared the documentation for the request for financial support, which, in a first stage, will be EUR 100,000,000, and then the remaining amount will be requested in stages.

“We need to develop the tools to put into practice the achievement of the common targets agreed at European level. We live in a dynamic, fast-moving world, but this freedom and efficiency come at a cost. Nearly a quarter of the world’s greenhouse gas emissions come from the transportation sector, whether by road, air or sea. And because it is an area heavily dependent on fossil fuels, the introduction of advanced biofuels will increase the share of renewable energy sources in the fuel mix and inevitably have a positive impact on reducing greenhouse gas emissions. Romania has the potential and the capacity to develop this field and we, at the Ministry of Energy, will support this type of investment. The preliminary consultation we had was very important in this respect, the feedback received from the economic operators concerned being harmonized and integrated into this new state aid scheme that we will launch,” said Sebastian-Ioan Burduja, Minister of Energy.

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

The total estimated budget of the state aid scheme is around EUR 500,000,000, with the first call to be launched having a budget of EUR 100,000,000. The amount of state aid will be a maximum of 45% of the total investment costs, but not more than EUR 45 million/bioethanol plant and EUR 91.25 million/SAF/HVO plant.

The estimated production capacity of the advanced biofuel plant (tons/year) is at least 50 thousand tons of bioethanol and 20 thousand, respectively 90 thousand tons per combined SAF and HVO plant.

Eligible applicants under the state aid scheme are public or private law entities (micro, small, medium and large enterprises, including start-ups), legally registered for tax purposes in Romania at the time of submitting the application for funding.

For state aid to be granted for the production of advanced biofuels, they must comply with the sustainability and greenhouse gas emission reduction criteria laid down in Directive (EU) 2018/2001 and its delegated or implementing acts. READ MORE