European Commission approves EUR 500 mln state aid in Romania for biofuel production

The European Commission announced on Monday, October 7, that it has approved, under EU state aid rules, Romania's EUR 500 million scheme to support investments in new biofuel production capacities.

Under the scheme, which Romania plans to finance through the EU's Modernisation Fund, the aid will be provided in the form of direct grants. The measure will support investments in new production capacities for advanced biofuels, including bioethanol, sustainable aviation fuels, and hydrotreated vegetable oil.

According to the European body, by promoting advanced biofuels, the measure aims to significantly reduce greenhouse gas emissions while minimizing the impact on agriculture compared to conventional biofuels produced from food crops.

The Commission determined that Romania's scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework (TCTF) for state aid. Specifically, the aid will accelerate the development of renewable energy and contribute to achieving the EU's environmental and energy goals.

As a result, the Commission concluded that Romania's scheme is necessary, appropriate, and proportionate to accelerate the green transition and facilitate the development of certain economic activities crucial to the REPowerEU Plan.

The aid must be granted no later than December 31, 2025.

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