Investing in the future? Romania’s National Recovery and Resilience Plan

On 28 October 2021 the European Council greenlighted Romania’s plan for the use of billions of Euro in Covid recovery funds. The National Recovery and Resilience Plan (NRRP) lays out how the country plans to use the €29.18 billion available to Romania as part of the EU’s Recovery and Resilience Facility, which was agreed last year by EU leaders as a stimulus for an EU economy hit by the Covid pandemic.

The investment, representing more than 10% of the Romanian GDP over the next years, presents an unprecedented opportunity to promote long-term sustainable development in the country and address the overarching challenges of climate change and biodiversity loss. At the same time, however, poor use of the funds could have the opposite effect.  
WWF has been following the development of the plans for Romania, Bulgaria and of other countries in Europe and contributing to the process with recommendations, some of which are reflected in the final plans. Our focus has been on areas with the greatest potential to contribute to reaching Romania’s climate and environmental objectives, or impacting them negatively. 

Investments in the future?

The final package approved by the European Commission and endorsed by the European Council includes a number of key investments and reforms relevant for achieving climate neutrality and environmental integrity, from  water management, forests and biodiversity to transportation and energy. The extent to whether they meet their promise will very much depend on whether and how they are implemented -- a process that WWF will be following closely in the next years of implementation. 

In general, the plan lacks more ambitious targets on environmental and climate components, better integration of nature-based solutions in reforms as well as investments, and faster phasing out of fossil fuels. The challenge will be how the reforms and investments will be implemented and this depends on the maturity of the proposed projects.

Water management 

Modernization of the water management system, including reconfiguration of the economics of the Romanian National Water Administration and inclusion of nature-based solutions as measures for adaptation to climate change, can help address environmental and climate change challenges. But the risks have to be addressed systematically from the beginning of implementation.

Regarding  reform of the Romanian Waters National Administration, the new EU funding should support studies for Romania’s 11 river basins as well as legislative amendments to the country’s Water Law (107/1996) that will regulate new economic mechanisms for water resources, with the potential to include payments for ecosystem services that improve water quality and the condition of water bodies.

Climate change adaptation measures include a number of potentially problematic investments that WWF will be monitoring closely. Depending very much on what is meant in practice, “modernizing” complex dams, increasing storage capacity and rehabilitating existing reservoirs and dams can have significant negative impacts on ecosystems. The Romanian plan thankfully mentions that feasibility studies shall include an assessment and comparison of the benefits and impacts of alternatives to dam renovation in order to prevent flood risks, “including the possible removal of dams and their replacement with nature-based solutions”. Indeed, in some cases, removing dams and restoring degraded ecosystems may have greater benefit for local communities in terms of climate change adaptation as well as other ecosystem goods and services. 

Romanian rivers are studded with hydrotechnical works that are no longer used, abandoned and degrading. Their removal can improve safety, while contributing to achieving “good ecological status” of rivers as required by the EU Water Framework Directive. Legislative and regulatory reforms are still needed to ensure the sustainability of such investments.

Forests and biodiversity protection 

The central problem for Romanian forest protection and management for the past 30 years has been the lack of vision and the lack of a forestry strategy, as underlined by WWF on numerous occasions. In terms of regulation, the NRRP continues necessary legislative reforms, including the adoption of a Forestry Strategy, the modification or completion of subsequent normative acts starting with the Forestry Code as well as realization of the forest cadastre.

However, the plan allocates insufficient resources for the sustainable management of forest resources. Efforts to address illegal logging are reduced to a harsh punitive system, without any measures for prevention. Investments are missing for intelligent video monitoring systems and IT / AI solutions that allow the digital measurement and establishment of the volumes of wood harvested from forests.

The NRRP includes investments in developing the infrastructure for surveillance and monitoring of forests and timber transports, integrated in the country’s SUMAL wood tracking system. Although the wording is not specific, it seems that the plan contains WWF's proposals for the sustainable management of the country’s forests, including a system for declaration and location of entry points according to the requirements of the due diligence system. These investments must be complemented by video monitoring systems to help address illegal logging. 

Also missing in the plan are investments in warehouses and primary sorting facilities  and the related logistics for storing and sorting wood, which could facilitate the application of environmentally friendly technologies. Investment in such facilities could also help draw greater economic value from the forests by making it possible to sell distinct varieties of wood rather than standing timber. 

The Forestry Strategy will establish sustainability criteria for forest biomass intended for use for energy purposes, a very important aspect for the responsible management of forests that will require the involvement of responsible energy authorities and relevant stakeholders.

WWF has consistently supported the creation of a framework for the designation of a network of representative ecosystems that contribute to biodiversity conservation, maintaining ecological connectivity and natural processes, meeting the objectives of the new EU Biodiversity Strategy 2030. In this respect, the inclusion in the NRRP of investments for updating the approved management plans of protected natural areas and the identification of potential areas of strict protection including primary and secular forests, in order to implement the EU Biodiversity Strategy for 2030, is a positive measure.
The Romanian NRRP responds to WWF’s call to harmonize natural resource management plans with the management plans of the national protected areas with which they overlap. . The plan foresees, by 2022, establishing an inter-institutional commission for analysing the legal framework of  high-impact sectors like forestry and agriculture. 

The plan also responds to WWF’s recommendation to implement an integrated IT system to support sustainable development, improve infrastructure and environmental quality, protect nature and conserve biodiversity. The system will facilitate reporting relevant for nature conservation and the EU Natura 2000 network, including management plans of protected areas, authorization of harvesting of wild flora and fauna, ecosystem services, by-catch of strictly protected species. 

Sustainable transport 

The NRRP includes investments in land transport within the framework of the Trans-European Network for Transportation (TEN-T). Unfortunately, it does not take into account the need to identify and designate ecological corridors as part of the Natura 2000 network -- a missed opportunity to promote safety and safeguard transport corridors for fauna. Fragmentation of habitats by roads and other infrastructure is a leading pressure on wildlife populations and biodiversity in Romania.

Another missed opportunity are measures for improving transport safety and sustainability, such as a digital platform for monitoring animal collisions, identifying critical sectors, and mapping ecological barriers as a reference for future defragmentation (following the model of other European countries). Such a platform already exists, developed and tested within the WWF-led TRANSGREEN project, where both the Romanian Ministries of Transport and Environment have been associated partners. 

Energy ambitions 

Through its positions and comments on the National Integrated Energy and Climate Change Plan, WWF supported the need for a timetable for removing coal from the energy mix. Through the NRRP, the government has set 2032 for the phasing out of coal and 2026 for the decommissioning of 3780 MW of installed capacity for the production of electricity from coal and lignite. In parallel, the installation of the new 3000 MW capacity by 2026 will increase the capacity to produce renewable energy by about 70% and can bring us closer to the targets for 2030.

Plans for a pilot project on gas and hydrogen distribution infrastructure -- though improved compared with the first draft submitted by the government -- is still problematic. It is not very clear how the transition from a 20%-80% hydrogen-gas mix in 2026 to 100% hydrogen in 2030 will be made. Moreover, we believe that it should be granted priority for direct electrification with renewable energy sources, and the use of green hydrogen should be limited to sectors where decarbonisation cannot be achieved in other ways (e.g. steel and chemical industry).

Achieving the objectives of the Paris Agreement would have required the earlier elimination of coal and significant investments in new electricity generation capacity from renewable resources, in storage capacity (over 400 MW), as well as in energy transmission infrastructure, which is one of the main obstacles to the construction of new capacities for the production of electricity from renewable sources. Unfortunately, further investment in gas and the late elimination of coal will only slow decarbonisation of the economy.

Next steps

A new Romanian government took power at the end of November, after a political crisis that lasted almost three months. Prime Minister Nicolae Ciuca has said that implementing the National Recovery and Resilience Plan will be the main focus for his government. The fact that Romania's new ruling coalition controls two-thirds of the Parliament should facilitate implementation of reforms and investments, although this could be undermined by the wide divergence of policies between the coalition members. 

The Romanian National Recovery and Resilience Plan is worth approximately €29.18 billion, of which €14.24 billion is in the form of a grant, with the rest provided as loans. The European Commission will make available a pre-financing of 13% of the loan (about €1.94 billion), after the agreement enters into force.

On 26 November the new Minister of Finance signed  a loan agreement for approximately €15 billion through the Recovery and Resilience Mechanism concluded between the European Commission and Romania. The money will come in 10 installments that will be paid out if the country meets targets and milestones set out in the agreement. Every six months the entire program can be blocked if the country does not deliver on the milestones. 

The EU support made available for Romania’s National Recovery and Resilience Plan is unprecedented in size as well as opportunity. It is imperative that these investments put Romania on a pathway toward climate neutrality and environmental integrity. To ensure this, good monitoring systems are needed that can ensure full respect of the principle of “Do No Significant Harm”. A dedicated monitoring committee for the Romanian NRRP is needed that fully involves stakeholders, including civil society, and oversees implementation of the reforms and investments. 
For more information: Orieta Hulea, WWF Romania Director,