Energy projects, a priority for the Ciolacu government

The first quarter of 2025 ended with a March full of strategic decisions, with a mix of social support, economic investments, programs for industry and entrepreneurship, but also budgetary prudence measures. The decisions taken by the Government in the energy field during the past month outline for our country a regional actor profile in this field of activity and balance domestic needs with European and international commitments. However, at the national level we are facing a complex macroeconomic climate, marked by external tensions and internal adjustments, the challenge for the coming period being to maintain the balance between investments, fiscal sustainability and the protection of vulnerable categories.

• Energy, in the vision of Marcel Ciolacu: ‟Drill, Sebi! Drill!'

In terms of energy, the Government last month allocated 1.2 billion lei for 18 projects regarding the development of natural gas distribution networks, from funds generated from the sale of carbon emission certificates, projects that will contribute to the expansion of infrastructure in disadvantaged local communities.

Also in March, the Executive approved the granting of state aid in a maximum amount of 3.12 billion lei to the Societatea Complexul Energetic "Valea Jiului" S.A., for the phased implementation of the Mining Closure Plan, during the period 2025-31 December 2032.

The aid is granted in the form of grants and is part of the state aid for the closure of coal mines, in the amount of 3.9 billion lei, authorized by European Commission Decision no. C (2024) 7896 final, which also includes the amounts granted by GEO 79/2023 and GEO 129/2023. The two state aids received in 2023 were also in the form of grants, one in the amount of 70.5 million lei, for the closure and safety of coal extraction in the Lonea, Lupeni, Livezeni and Vulcan mines in October-November 2023, and one in the amount of approximately 705 million lei, for the period December 2023-December 31, 2024, for the closure and safety of coal extraction.

The state aid is intended to cover the exceptional expenses necessary to carry out the activities and measures included in the Mine Closure Plan within the company, namely for works for the safety of underground activity, rehabilitation of former mining perimeters, recultivation of surface soils, compensatory payments for personnel who are about to lose their jobs and professional retraining. The Ciolacu Cabinet also approved the granting of funding in the form of a grant for the Valea Jiului Energy Complex for 2025, in the amount of approximately 607.7 million lei, in the following structure, of which 7.8 million lei represent costs of compensatory payments granted to employees who lose their jobs, and 208,000 lei - expenses for professional retraining - 208,000 lei. The rest of the allocation will be spent on works regarding the safety of underground activity, the rehabilitation of former mining operations and the recultivation of surface soils.

In the last government meeting last month, the members of the Ciolacu Cabinet adopted an emergency ordinance through which large energy-consuming industrial companies in Romania will be able to access a state aid scheme that will help them maintain their competitiveness, in the context of national and European efforts to reduce greenhouse gas emissions. With a budget of 578.4 million euros until the end of 2031 (allocations of maximum 150 million annually), this support mechanism is in line with the European Action Plan for the Steel and Metals Industry.

The regulatory act adopted by the Government provides for the establishment of a scheme for granting state aid in the form of partial exemption from the payment of green certificate acquisition obligations. The state aid will be granted in the form of a percentage reduction of maximum 85%, respectively 75% of the costs generated by the acquisition of green certificates, depending on the activity carried out and in accordance with the provisions of Law no. 220/2008 and the Guidelines on State Aid for Climate, Environmental Protection and Energy (CEEAG). However, the reductions applied must not lead to the payment of a tax of less than 0.5 euro/MWh annually on account of the green certificate acquisition obligation.

The state aid scheme applies to economic operators operating in economic sectors exposed to a significant risk of carbon leakage and in sectors exposed to risks due to the energy intensity of the activities carried out and exposure to international trade. The estimated number of state aid beneficiaries that may be granted under this support scheme is 200 large energy-intensive companies.

Sebastian Burduja, Minister of Energy, stated that the state aid scheme established for these companies is the Government's commitment to support the industry, especially since our country is preparing to become extremely competitive in the energy sector, both in electricity production, where investments of over 17-18,000 Megawatts are in the works, of which 10,000 Megawatts represent green energy, solar and wind.

Also in the energy field, during March, the companies Romgaz and OMV announced that they had started drilling in the Neptun Deep perimeter, to exploit the natural gas existing in the respective area. For this reason, several NGOs working for environmental protection, including Greenpeace Romania, sued both the Ministry of Energy and Minister Sebastian Burduja. Under these circumstances, Prime Minister Ciolacu declared his support for Minister Burduja, who he said was being unfoundedly attacked by NGOs and political parties that play into Russia's hands, so that our country does not become one of the largest natural gas producers in the European Union. Therefore, Marcel Ciolacu, quoting Donald Trump, sent the Minister of Energy: ‟Drill, Sebi! Drill!‟

• Money for farmers and SMEs

During March, the Government approved over 1.5 billion lei to support farmers and livestock breeders, of which: 600 million lei for livestock breeders' requests in 2023, 400 million lei for farmers, 450 million lei for a new aid scheme in livestock.

The executive also discussed the launch this year of the new edition of the Start-Up Nation program for which it has allocated a budget of 440 million euros, exclusively from European funds, a program whose main objectives are the creation of over 15,000 jobs and the support of 7,500 entrepreneurs. In order to support companies, but also citizens, the Ciolacu Cabinet decided last month, at the proposal of the Financial Supervisory Authority, to extend the cap on RCA policies until June 30, 2025, in order to prevent the emergence of imbalances in the market and the increase in prices for these insurance policies. According to statistics published at the end of 2024, there were over 10.7 million vehicles in the national fleet. On March 13, 2025, 7.6 million were insured, a share that remains low compared to the size of the car fleet, an element that substantiates the Government's decision. The price cap for compulsory car insurance policies was initially set for April 2023, then, through successive amendments, it was decided to extend the period of application of the capped prices for RCA.

A significant moment last month was the announcement by Prime Minister Marcel Ciolacu and Bogdan Ivan - Minister of Economy, Digitalization, Entrepreneurship and Tourism, of the financing by the European Commission of 615 million euros for three critical mineral extraction projects in our country. This concerns the extraction of graphite, magnesium and copper, essential resources for strategic industries (auto, energy, defense). The Minister of Economy specified that it is primarily a financing of 200 million euros for a 100% Romanian project that will be carried out at Salrom SA for the exploitation of 15,000 tons of graphite annually, an ore necessary in the automotive industry, the defense industry and for energy storage.

The second project receives a financing of 115 million euros and aims at the extraction of "green magnesium", a critical material, which is used in the aeronautical and pharmaceutical industries. The third project, financed with 300 million euros, will be carried out in Hunedoara County and aims at the extraction and refining of copper and gold from the Romanian subsoil, which will automatically bring a reduction in the dependence of the entire cycle on everything that means the final processing of copper on imports. According to the Minister of Economy, our country currently depends on copper imports from countries outside the European Union. With the implementation of this project, which will produce 20,000 tons of copper concentrate annually, both the needs of the Romanian economy in everything that means the manufacturing industry, as well as a significant part of the European one, will be ensured, and European production will increase by 2.3%.

• Finances are borrowed to cover budget expenses

During March, the Government also decided to provide financial support of 800 lei, support that will be paid in two installments (April and December) and that will benefit 2.7 million pensioners with monthly incomes below 2574 lei per month.

In order to cover budget expenses, the Ministry of Finance was forced to resort to loans last month, launching new editions of the Fidelis and Tezaur government bond issuance programs. Through the Fidelis program carried out between March 7-14, over 2.2 billion lei were attracted to the state budget. As for the Tezaur Treasury program announces that between March 10 and April 4, the Ministry of Finance launched the first edition in which Romanian citizens who have an account on the Ghişeul.ro platform and hold a debit card had the opportunity to purchase government securities online, just one click away. In that edition, Romanians in the country and in the diaspora subscribed almost 720 million lei through the Ghişeul.ro platform, out of a total of 2.16 billion lei invested, placed in over 72,000 orders.

The respective loans were necessary as long as, according to the budget execution for February, published by the Ministry of Finance at the end of March, the budget deficit for the first two months of 2025 was 30.24 billion lei (1.58% of GDP). Total revenues amounted to 89.66 billion lei, while the expenditures of the general consolidated budget were 119.9 billion lei. Of the total expenditure, 28.1 billion lei represents personnel expenses - up 16.2% compared to the same period of the previous year, 14.74 billion lei represents expenses for goods and services - up 2.4% compared to the same period in 2024, 10.06 billion lei - interest expenses, up 3.39 billion lei compared to February last year, and 42.78 billion lei - social assistance expenses, up 10.4% compared to the same period in 2024. Regarding public investments, the budget execution at the end of February shows a decrease of 23.8% compared to February 2024 (13 billion lei - February 2025 compared to 17.1 billion lei in February 2024).

The need for financing the state budget is still high, if we take into account the fact that in the meeting of the Supreme Council for National Defense of the Country on March 28, it was decided to increase the defense budget in stages, to purchase a multi-role corvette for the Romanian Naval Forces in an emergency regime, and to increase the financial and military support provided by our country to Ukraine.