New Romanian law introduces tax on green energy producers

A recent law that sets up a scheme to compensate consumers for high energy prices also introduced a tax of 80% on additional income generated by electricity producers. However, the tax applies only to green energy producers, as fossil fuel producers are exempt.

”Overtaxing the income of producers from renewable sources and exempting final users from paying green certificates will create serious financial problems for operators, potential insolvencies and possibly even the closure of renewable energy production capacities,” read an open letter signed by three organisations representing the renewable energy industry.

One immediate effect could be delays or even abandonment of new renewable energy investments when Romania needs new power facilities, the industry associations warned.

”Over-taxation of income will create immediate losses for producers from renewable sources who may become insolvent – as the costs they currently incur are not taken into account. Thus, they will pay more than they will receive,” the press release said.

The associations propose that authorities change the tax on income to taxation of unjustified profits.

Green energy producers say that the short-term tools offered by the European Commission’s set of measures offer a wide range of solutions for the Romanian authorities to mitigate the impact on the most vulnerable consumers and energy-intensive industries.

”In the medium and long term, the focus is on stepping up investment in renewable energy, which offers the lowest prices for consumers, and accelerating the green transition to reduce Europe’s dependence on energy imports, which is the best insurance policy against price shocks like the one we are currently facing,” they added.

(Bogdan Neagu | EURACTIV.ro)