Green Buildings in Romania: Taxes and Legislation

Romania, an East European country with a population of around 18 million people, member of European Union since 2007, has now 4 cities & 1 village where green buildings receive tax reduction from the municipality through a de-minimis funding program. This is a huge success for Romania after long efforts of Romania Green Buildings Council and other local stakeholders.

Right now there are 83 buildings LEED certified & in progress, 57 BREAM certified or in progress and 20 buildings Green Homes certified or in progress. The level of ambition for top office buildings is very high, being a challenge for who has the most sustainable office buildings in Romania with the highest score.

The good thing is that this tax exemption is encouraging people to discuss more about green buildings. The bad thing is that to get a 20% tax exemption is very easy as getting the BREAM GOOD certification is not that difficult. Hopefully, in the following years, the level of ambition will increase.

Check the report with Romania’s Greenest Buildings created by Romania Green Building Council.

Timișoara: 300,000 people

  • 20/35/50% tax exemption for companies’ green buildings (20% for Good / Silver)
  • Total Budget: 2,000,000 euros (max 25,000 euro/applicant)
  • Duration: 2014-2019
  • Certification accepted: LEED, BREAM, DGNB, CASBEE, Green Star
  • Level of ambition: low

More info (Romanian language): HCL nr. 41/29.07.2016

Cluj Napoca: 300,000 people

  • 20/35/50% tax exemption for companies’ green buildings (20% for Good / Certified)
  • Total Budget: 567,000 euros (max 25,000 euro/applicant)
  • Duration: 2017-2019, 2019-2020
  • Certification accepted: LEED, BREAM, DGNB, CASBEE, Green Star
  • Level of ambition: low

More info (Romanian language): HCL nr. 20/2016

Iași: 320,000 people

  • 20/35/50% tax exemption for companies’ green buildings (20% for Good / Bronze)
  • Total Budget: 610,000 euros (max 20,000 euro/applicant)
  • Duration: 01.2019 – 12.2021
  • Certification accepted: LEED, BREAM, DGNB, CASBEE, HOE, GBRestore, WELL
  • Level of ambition: low

More info (Romanian language): HCL

Zalău: 43,000 people

  • 20/35/50% tax exemption for companies’ green buildings (20% for Good / Certified)
  • Total Budget: 241,000 euros (max 25,000 euro/applicant)
  • Duration: 2019-2020
  • Certification accepted: LEED, BREAM, DGNB, LBC
  • Level of ambition: low

More info (Romanian language): HCL 310/27.09.2018

Tunari: 3,000 people (a village nearby Romania’s capital city, Bucharest)

  • 50% tax exemption for households for Green Homes cerification
  • Total Budget: unlimited
  • Duration: 2018+
  • Certification accepted: Green Homes (RoGBC)
  • Level of ambition: medium

More info (Romanian language): HCL/26.10.2017

 


Thanks, RoGBC and Adrian Pop for providing some of the info.

Overview of Romania Energy Industry (Bad news)

by Mihai Toader-Pasti, Cofounder @ energiaTa.org and Teodora Vasâlca-Cimpoi, Editor-in-Chief @ NewsEnergy.ro

Romania today is facing various challenges on multiple domains, energy being one of them. As the country struggles with corruption problems, a backlash from the private sector for the last fiscal changes, everything appears to fail and the EU presidentship got the country’s representatives as unprepared as this winter.

Political, legal and economical instability became the national status quo during the last years, resulting in the lack of investment of any kind, whether we are referring to starting new projects, upgrading existing infrastructure or even performing the necessary preventive maintenance activity. Together with the lack of expertise and leadership at decision levels and too many and abrupt legislation changes without a real understanding of the industry culminated with the biggest crisis in the last 30 years for Romania’s Energy Industry.

Therefore there are a few good news, some bad and a lot of very bad news. The industry leaders and experts, energy associations and federations were too passive during all these years, while they should have been more vocal and engaged, but fear or the love of status quo kept them and still keep them out of the game. This is not going to end well for anybody.

Good news:

    • Romania took, for the first time in its history, the Presidency of the Council of the European Union.
    • As of 1st of January, prosumers are a reality in Romania as all its laws and regulation in place for that, but utility companies are still struggling to adapt.
    • The bureaucracy was also reduced for prosumers in terms of fiscal requirements, the adjustments made on the monthly bill.
    • Prosumers are able to sell the energy with a price of approximately ⅓-¼ from the final price paid in the electricity bill.
  • 100 million euros (European money) for Romanian households prosumers (approx 24.000 beneficiaries x 4.200 euros/system) are available in 2019.

Bad news:

    • Romania had the highest annual inflation rate in the EU last year.
    • We still don’t have a final energy strategy. The last one was deleted before being adopted and a new one was put into public discussion facing big critiques from the experts in the industry.
    • Our target for 2030 is 27% RES, under 32% target of EU and decarbonization is not one the priority of the Government, saving the coal industry jobs is one of them.
    • Lack of available installed capacity in the system: the data show that we have 24,000 MW, from which only 14,000 MW is operational. Still, some of considered available installed capacities were unavailable for different reasons (needed repairs, investments, resources). As a result, from the beginning of the year, we were net electricity importers to cover the internal consumption which was below 10,000 MW.
    • A one week miners’ strike at the largest coal energy producer forced the company which provides more than 20% of internal production to close some of its units. The risk for further shutdowns is still high, because of insufficient lignite stocks.
  • In November, the Government decided to postpone until 2021 the implementation of more favorable legislation for vulnerable consumers.

Very bad news:

    • Romania’s Government changed the fiscal laws for 800 times during 2018, the last one on 28th of December, surprising the energy sector with a tax of 2% on turnover without previous consultation with the business environment.
    • This will generate an increase with at least 5% in monthly electricity bills for consumers, as the tax applies to every sector – from generation, to transport, distribution and sales.
    • The latest emergency ordinance also radically changed the rules on the gas and electricity market, as it forces the biggest state-owned electricity companies to sell up to 65% of their production with regulated prices. Also, the Government put a price cap of 68 RON (14,5 euros) per MWh for internal gas production, until February 2022.
    • The measure comes after many other legal changes for gas producers, adopted last autumn by the Parliament, which introduced higher fiscal obligations and forced the companies to sell 50% from their production on the gas centralized market. As a result, the investors in the Black Sea offshore fields postponed the final investment decisions for an undefined data.
    • We went from a free market to a very regulated one in one month
    • The new surprising fiscal legislation drastically reduced the value of the shares of the main listed energy companies, which were among the biggest losers. OMV Petrom, Electrica, Transgaz, Romgaz and Transelectrica recorded depreciation of about 9% to almost 20%.
    • Over 3 billion euros has lost Romania in a single day – called „the red Wednesday” – which brought the second highest daily decline of the Romanian stock exchange history.
  • Last week we had the most expensive energy on spot market in Europe.

Romania @ World Urban Forum 9 in Kuala Lumpur

update: Read the Kuala Lumpur Declaration of World Urban Forum.

Between 7 and 13th February, I will be attending world’s most important forum for urban development which is taking place in Kuala Lumpur. I will try as much as possible to write daily about the challenges countries and cities are facing in regard to:

1. SUSTAINABLE URBAN DEVELOPMENT FOR SOCIAL INCLUSION AND ENDING POVERTY

2. SUSTAINABLE AND INCLUSIVE URBAN PROSPERITY AND OPPORTUNITIES FOR ALL

3. ENVIRONMENTALLY SUSTAINABLE AND RESILIENT URBAN DEVELOPMENT

In 2016 was adopted The New Urban Agenda, a historic event, the COP21, but for cities

The New Urban Agenda was adopted in October 2016 at the United Nations Conference on Housing and Sustainable Urban Development – Habitat III in Quito, Ecuador. It is a result of a unique consensus among all participating states. The document sets out a common vision and global standards for urban development in the coming decades.

The New Urban Agenda comes in at a critical moment when the first time in history over half of the world’s population is residing in urban settlements. Cities, if planned and managed well, will become the main tool for sustainable development and has a potential to be a solution to many of the challenges our planet is facing today. The New Urban Agenda lays out the vision for future cities based on the science of urban development providing tools in crucial areas.

The Theme of WUF9 is “Cities 2030, Cities for All:

Implementing the New Urban Agenda” – places the Forum’s focus on the New Urban Agenda as a tool and accelerator for achieving Agenda 2030 and the Sustainable Development Goals.

WUF9, therefore, provides an excellent opportunity to garner the efforts of all relevant actors to deliberate on, identify and commit to implementation of concrete solutions for the transformative commitments made in the New Urban Agenda (which are also fully aligned with the Sustainable Development Goals):

More information here.