Romania’s coal vote risks €5 billion

Romania’s Chamber of Deputies voted 180-9 on 5 August to force coal-fired power plants to remain open until replacement low-carbon capacity is built and operating (Capital). The bill now sits on President Nicușor Dan’s desk, and the timing could hardly be worse. His decision may determine whether Romania receives roughly €5 billion in remaining EU recovery grants before the August deadline closes. In EU terms, the danger is precise: parliament may have undone a reform Brussels had already accepted and paid for.

The president can still stop it

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

If Dan sends the bill back, parliament must reconsider it. If he signs, the European Commission will have to judge whether the amendment reverses milestone 114, the coal phase-out commitment attached to Romania’s recovery payments (Digi24). For now, Brussels is staying careful, saying only that it is "following developments closely" (Stiripesurse).

Why this threatens billions

Romania’s recovery plan, known as the PNRR, does not work like the older EU funds Malta is used to seeing in roads, restoration projects and public works. Under the Recovery and Resilience Facility, governments are not paid back simply for presenting receipts. They receive money when they prove they have completed reforms and investment targets agreed in advance (Regulation (EU) 2021/241, Council of the EU).

That is why this vote matters. If the Commission decides that a completed reform has been reversed, it can suspend future payments. The mechanism is meant to stop governments from taking EU money for one policy and then quietly undoing it at home.

The calendar leaves almost no margin. All milestones must be completed by 31 August 2026, with final claims submitted by 30 September (Commission closing guidance). Romania has so far drawn about €12.97 billion, roughly 60% of its total allocation (Romania Insider). Pîslaru says around €2 billion in grants is tied to the fifth payment request and €3 billion to the sixth, the last two claims for EU money (Digi24 Economic).

A real grid problem, the wrong fix

Romania’s coal problem is not invented. The country committed to withdrawing 1,045 MW of coal capacity by the end of 2025 and another 710 MW by 31 August 2026 (Agerpres). The amendment passed because replacement capacity is not ready. A recent drought on the Danube forced emergency measures to keep the Cernavoda nuclear plant cooled, showing how tight the power system already is (EUalive). Keeping coal plants available for emergencies is a real grid-security concern.

The PSD-AUR alliance behind the amendment presented it as a defence of energy security and jobs at plants such as Rovinari and Turceni (Libertatea). Acting Prime Minister Bolojan, however, warned that rewriting the milestone could trigger penalties above €1 billion and block the final payments, even after the government had renegotiated better terms with Brussels (ActMedia).

Poland shows the cleaner route. It runs the EU’s most coal-dependent grid, with coal producing about 61% of electricity in 2023 (IEA). But Warsaw kept the coal-security question inside a capacity-market scheme, where the state pays power plants to remain available. Brussels approved that under EU rules on when governments may subsidise companies (European Commission). Poland protected supply without reopening reforms already tied to recovery money.

Who pays

If the amendment survives and the Commission treats it as a reversal, the damage will reach far beyond the energy sector. Recovery grants finance hospitals, schools, roads and digitalisation across Romania. Replacing lost grants with borrowing would be expensive, at a time when Romania’s government already pays high interest rates on its debt and fiscal pressure is rising (To Brief).

The coal regions the amendment claims to protect could end up losing twice. They would keep ageing plants running for a little longer, while risking the EU transition funding meant to build what follows. The immediate winners are narrower: incumbent coal operators and politicians who can say they defended regional jobs before the next election.

Romania has a genuine grid-security problem. Parliament has turned it into a fiscal crisis with 26 days left on the clock.