Romania’s Coal U-Turn Risks EU Cash

Romania’s Chamber of Deputies voted 180 to 9 on 5 August to rewrite the country’s coal-closure law. The change removes fixed shutdown dates for coal and lignite plants. Instead, a plant would stay open until replacement low-carbon capacity is built, connected to the grid and operating commercially (Agerpres, Europa FM).

That matters because the original law was not just domestic energy policy. It was one of the reforms Romania used to unlock money from the EU’s recovery fund, the post-pandemic programme that pays member states after they complete agreed milestones. Within a day, the European Commission warned that the amendment could mean the reform "is no longer considered fulfilled" (HotNews, Ziare).

The bill is now on President Nicusor Dan’s desk. He can sign it, send it back to parliament, or ask the constitutional court to review it (Bursa). His choice will decide whether this remains a fight inside Romania’s governing coalition or turns into a formal clash with Brussels.

A closure date replaced by a promise with no deadline

The amendment was backed by PSD, Romania’s Social Democrats and the largest party in government, and by the nationalist AUR. Its effect is simple: a binding coal phase-out becomes conditional. No plant closes until replacement sources are installed, connected and commercially operational (Agerpres).

PNL, the centre-right coalition partner, and European projects minister Dragos Pislaru warned that the vote could put recovery-fund payments at risk (Stiripesurse).

Pislaru put the exposure at about €5 billion in future grants. He also pointed to roughly €600 million linked to a milestone Romania has already been paid for (Digi24). Those are his figures, not a published Commission calculation.

The Commission’s confirmed position is more precise. It will assess whether the new law reverses milestone 114, which had already been cleared in an earlier payment, and whether it blocks milestone 119A, the remaining coal-capacity closure. That milestone requires Romania to decommission 710 MW before receiving its final instalment (Agerpres, Libertatea).

The clock does the Commission's work

The Recovery and Resilience Facility does not punish countries instantly. Under Article 24 of the RRF Regulation, Romania first requests a payment. The Commission then checks whether the promised milestones have been met. If they have not, it can suspend all or part of the payment. Romania gets one month to respond. Permanent cuts come only after six months without correction.

For Malta, the mechanism is familiar in principle even if the sums are on a different scale: EU money is not a grant in the old sense. It is tied to reforms that become part of domestic law, and Brussels pays when the legal and administrative machinery is in place.

Bulgaria’s recent case shows how the Commission usually handles this. It released close to €900 million under Bulgaria’s fourth request while holding back money tied to unfinished milestones (Economic.bg, European Sting). Partial suspension, rather than a total blockage, is the normal route.

Romania’s problem is timing. All recovery-fund reforms must be completed by 31 August 2026, and final payment requests must be filed by 30 September (Brussels Times). If the law stands, Romania cannot show that it met milestone 119A. There is little time left to negotiate a workaround.

An energy argument the Commission already rejected

The energy concern behind the amendment is real. Coal plants across South-East Europe still provide winter heat and dispatchable power, meaning electricity that can be switched on when wind, solar or imports are not enough. Pislaru himself acknowledged that the Romanian government had told Brussels coal plants needed to remain online through winter while new capacity came on stream (Digi24).

The Commission has already rejected that argument for this milestone. Its position is that Romania’s electricity supply is stable, the market is functioning, and no emergency justifies rewriting the legal basis of a reform that has already been cleared (Euronews Romania, Agerpres).

There is a distinction here that matters. A government can keep plants available through winter as an operational decision. Changing the law changes the bargain Romania made to receive EU money.

If Dan signs the bill, the Commission will have to choose between suspending payments, negotiating a revised timeline, or tolerating a diluted reform. The last option would carry a wider cost: it would tell other member states they can collect recovery money and then soften the reform that unlocked it.

If Dan sends the law back, Romania’s parliament will have to weigh coal-region politics against billions in EU funding. The same argument about supply security is heard in Sofia and Warsaw. Brussels’ response will therefore be read well beyond Bucharest.