Romania’s coal vote puts €5 billion at risk

Romania's Chamber of Deputies voted 180-9 on 5 August to require coal-fired power plants to stay open until replacement low-carbon capacity is built and running (Capital). The bill lands on President Nicușor Dan's desk at the worst possible moment. What he does with it will decide whether Romania can collect roughly €5 billion in remaining EU recovery grants before a hard August deadline shuts the window. The amendment could undo a reform that Brussels already accepted and paid for.

The president can still stop it

The law is not yet in force. Under Romania's constitution, Dan has 20 days to sign it into law, send it back to parliament for another vote, or refer it to the Constitutional Court (CCR). On 4 August he signalled he could use "all constitutional prerogatives" to block it (Romania Insider). The government, through interim investments minister Dragoș Pîslaru, formally asked him to do so (Observator).

If Dan sends it back, parliament must reconsider. If he signs, the European Commission must decide whether the amendment reverses milestone 114 — the coal phase-out commitment tied to Romania's recovery payments (Digi24). So far, the Commission has said only that it is "following developments closely" (Stiripesurse).

Why this threatens billions

Romania's recovery plan (the PNRR) works differently from older EU funding. Under the Recovery and Resilience Facility, governments don't submit receipts. They prove they've completed agreed reforms and hit investment targets. Only then does money flow (Regulation (EU) 2021/241, Council of the EU). If the Commission judges a completed reform has been undone, it can suspend future payments.

The deadline leaves almost no room to fix a mistake. All milestones must be completed by 31 August 2026, with final claims filed by 30 September (Commission closing guidance). Romania has drawn about €12.97 billion so far, roughly 60% of its total allocation (Romania Insider). Pîslaru estimates that about €2 billion in grants sits in the fifth payment request and €3 billion in the sixth — the final two claims for EU money (Digi24 Economic).

A real grid problem, the wrong fix

The coal concern is genuine. Romania committed to withdrawing 1,045 MW of coal capacity by end-2025 and another 710 MW by 31 August 2026 (Agerpres). The amendment passed precisely because replacement capacity is not ready. A Danube drought recently forced emergency measures to keep Cernavoda nuclear plant cooled, exposing how thin the power margin already is (EUalive). Keeping coal plants that can be switched on when needed is a real safety concern.

The PSD–AUR alliance that pushed the amendment framed it as protecting energy security and jobs at plants like Rovinari and Turceni (Libertatea). But acting Prime Minister Bolojan warned that rewriting the milestone risked penalties above €1 billion and could block final payments, even after the government had renegotiated better terms with Brussels (ActMedia).

Poland shows what the alternative looks like. It runs the EU's most coal-dependent grid, with coal generating about 61% of electricity in 2023 (IEA). But Warsaw kept the coal-security issue inside a capacity-market scheme (where the government pays power plants to stay available), approved by Brussels under EU rules on when governments may subsidise companies (European Commission). Poland avoided reopening reforms that EU recovery money was already tied to.

Who pays

If the amendment survives and the Commission treats it as a reversal, the damage reaches well beyond energy. Recovery grants finance hospitals, schools, roads and digitalisation across Romania. Replacing lost grants with borrowing would be costly — Romania's government already pays high interest rates on its debt, and fiscal pressure is mounting (To Brief). Coal regions, which the amendment claims to protect, could lose twice: they keep ageing plants running a while longer but forfeit the EU transition funding meant to build what comes next. The winners are narrow — incumbent coal operators and politicians who can claim to defend regional jobs through the next election.

Romania's grid-security problem is real. Parliament turned a solvable scheduling dispute into a fiscal crisis with 26 days left on the clock.