Romania’s big industry reaches ‘critical point’ over energy costs

Newsroom 14/02/2014 | 16:48

Representatives of big industrial consumers warned the liberalization of the energy markets and the renewable subsidies have built up their costs to unsustainable levels, which may result into industrial relocations and job losses in Romania. They are seeking exemptions from paying green taxes and are calling for a transition period on energy costs deregulation.

In an open letter addressed to the high ranking officials, including the president and the prime minister, trade organizations accounting for 500,000 employees and 3,500 said the country needs to redesign its electricity and gas policies to avoid the loss of industry.

Steel maker ArcelorMittal Galati and aluminum producer Alro are among the biggest companies that signed the letter.

“Romanian industrial consumers do not have to be punished for trying to develop their businesses in Romania and should not pay more than it is fair for green energy or gas,” said the letter.

“If Romania does not quickly implement substantial measures for solving the issues in the electricity and gas sectors, the risk of relocation becomes reality, shortly. The burden of huge and artificial costs that threaten producing industries also has potential irreparable consequences on the national economy,” added the companies in the letter.

The liberalization of the domestic gas markets will lead to a 70 percent spike in bills in less than two years, according to the companies. The industrial sector is calling for a transition phase, as the current gas market lacks the possibility of really changing the supplier. 

On electricity, industrial consumers have paid last year 21 percent more for each MW compared to 2010. Local companies pay an average of USD 80/MWh for electricity, which includes green taxes, transport and infrastructure tariffs.

Local companies are saying their competitors in Germany pay USD 50/MW, while in France and the US, costs hover around USD 60/MW and USD 40/MW, respectively.

Companies point out that EU regulations grants member states the option to except big industrial consumers from paying green taxes. This can go as high as 80-85 percent, as part of Europe’s strategy to support reindustrialization.

Ovidiu Posirca

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