CURRENT STATUS OF HYDROGEN PROJECTS

In 2023, Romania started developing a strategy document in response to the EU Hydrogen Strategy and, on 31 May 2023, the Ministry of Energy in Romania published a consultation on the first version of the National Hydrogen Strategy and the Action Plan (“NHSAP”) for implementation between 2023-2030.

The NHSAP has been drafted to reflect the role hydrogen will play as a key energy carrier within the Romanian energy sector as well as the strategic importance of hydrogen within the wider context of European decarbonisation.

The draft NHSAP, which is in the final stages of adoption, estimates an investment requirement of €4.8 billion to produce 152,900 tonnes of hydrogen from renewable sources per year by 2030. Of this, 47.3% is to be used in transport, 37.2% in existing industrial activity and 15.5% in new industrial applications, such as in the steel industry. The draft NHSAP has undergone various iterations during the consultation process and now proposes an approach in line with the objectives of decarbonising the Romanian economy by phasing out the use of hydrogen for heating in the residential sector and in combined cycle natural gas turbines.

In terms of hydrogen projects developed in Romania, OMV Petrom SA (as Beneficiary) has concluded financing contracts with Romania’s Ministry of Energy for the development of two key projects which are to be located at the Petrobrazi refinery:

  • the construction of a green hydrogen production plant using water electrolysis (20MW); and
  • the expansion of green hydrogen production capacity through the construction of a 6kNm3/hr hydrogen plant (35MW).

The projects commenced development on 29 December 2023 and are financed by non-reimbursable funds under the National Recovery and Resilience Plan (“NRRP”).

Alongside the OMV Petrom S.A. projects, another 12 projects have been approved, following an evaluation phase under the NRRP “call for projects”. 1  The “call for projects” was launched through the Ministry of Energy Order no. 573/17.05.2024 for the re-establishment of the State aid scheme aimed at supporting investments in the construction of projects for the production of green hydrogen.

RECENT POLICY CHANGES

Law 237/2023 on the integration of renewable and low-carbon hydrogen in the industry and transportation sectors was passed and published on 20 July 2023 and entered into force on 23 July 2023. The purpose of this law is to establish measures for fuel suppliers and industrial hydrogen consumers to integrate hydrogen from renewable and low-carbon sources in the industrial and transportation sectors.

Pursuant to Law 237/2023, fuel suppliers will be obliged to secure non-biological renewable fuels from hydrogen suppliers. From 2030, fuel suppliers will also be required to ensure that the energy value derived from fuels:

  • from non-biological renewable sources supplied on the market in Romania, and
  • used in the transport sector in any one year,

is at least equal to 5% of the energy content of all fuels supplied for consumption or use in Romania.

In addition, each fuel supplier is required to ensure that the energy value used for electro-mobility in Romania, either from non-biological renewable fuels and/or electricity from renewable sources, meets at least the following percentages of energy content of all fuels placed on the market in Romania:

  • 0% in 2024;
  • 0.5% in 2025;
  • 1% in 2026;
  • 2% in 2027;
  • 3% in 2028;
  • 4.5% in 2029.

Not complying with these targets will result in a fine calculated by multiplying each megajoule (MJ) of fuel from non-biological renewable sources not achieved to reach minimum percentages with a value yet to be established by the government but which will not be less than RON 0.25 per MJ.

RECENT DEVELOPMENTS

Development 1

The National Recovery and Resilience Plan

The NRRP was approved by the European Commission in the second half of 2021 and will play an important role in achieving the objectives of the Paris Agreement. The NRRP includes ambitious growth targets for a robust development of the economic sectors producing or using hydrogen 2 .

The NRRP aims to develop a regulatory framework for future technologies, including hydrogen and storage solutions, with a view to achieving projects compatible with the "do no significant harm" principle established under the EU regulation on Taxonomy of sustainable activities. 3 According to the NRRP, Romania must define and approve legislative changes that remove the barriers to the large-scale production and use of green hydrogen.

The NRRP includes an analysis of the relevant areas of hydrogen development, based on the current situation in Romania, with examples of best practices from other countries inside and outside Europe. The strategy outlines the development vision of the hydrogen economy, by defining objectives backed by concrete actions. Potential funding sources have been identified, as well as proposals for governance mechanisms to support the strategy implementation.

For example, Romania shall be contributing to the objectives of the EU flagship initiatives, as per NRRP, by investing in renewable gas distribution infrastructure (using natural gas in combination with green hydrogen as a transitional measure), as well as green hydrogen production capacities and/or its use for electricity storage. The aim is to have 90,000 consumers connected to the blended gas/hydrogen distribution network by Q2 of 2026. The NRRP plans to develop a strategic and regulatory framework for integrated hydrogen production and use, while supporting ambitious pilot projects in this sector. 

Development 2

Law 237/2023 on the integration of renewable and low-carbon hydrogen in the industry and transportation sectors

As mentioned above, Law 237/2023 on the integration of renewable and low-carbon hydrogen in the industry and transportation sectors was passed and published on 20 July 2023 and entered into force on 23 July 2023.

Pursuant to Law 237/2023, every industrial consumer of hydrogen, for both energy and non-energy purposes, will be required to ensure that:

  • from 2030, a minimum of 50% of that hydrogen will be from non-biological renewable sources or will be low-carbon hydrogen and a minimum of 42% will be from non-biological renewable resources; and
  • from 2035 onwards, at least 75% of that hydrogen will be from non-biological renewable sources or will be low-carbon hydrogen and at least 65% from non-biological renewable resources.

The National Energy Regulatory Authority will issue certificates for the supply of renewable hydrogen and for the supply of low-carbon hydrogen, upon application by suppliers. 

Development 3

Future hydrogen projects

Transgaz gas/hydrogen blending

The national natural gas transporter Transgaz is anticipated to expand its activities in the field of hydrogen transportation. To do this, a limited liability company will be set up to manage and oversee the transport of hydrogen, with Transgaz as its sole shareholder.

According to a 2023 report, Transgaz's list of projects includes a pilot project for the measurement and utilisation of a natural gas mixture with hydrogen. The project will look to design, execute and install the infrastructure required to blend natural gas with hydrogen and will analyse the effectiveness of materials, measuring systems and combustion equipment.

Transgaz also signed a memorandum of understanding with E.ON in 2023 to collaborate in order to integrate hydrogen into gas networks in Romania. As of June 2024, the project remains at early stages of development.

Hydrogen HY SAPE 10

Societatea de Administrare a Participațiilor în Energie (“SAPE”) announced on 11 September 2024 that it had obtained funding under the NRRP for “Hydrogen HY SAPE 10”, an energy storage project using green hydrogen. The project will cost 54.63 million lei, with SAPE receiving funding of 29.95 million lei through the NRRP. The project is expected to be completed by the end of 2025.The new polymer membrane electrolysis (PEM) hydrogen plant will use 3 MW of renewable energy to produce 1.83 MWH2. The amount of green hydrogen produced annually is estimated to be 425 tonnes/year, requiring 23,438 MWh/year of renewable electricity.

The Hydrogen HY SAPE 10 project shall be developed in the village of Dârvari, Valea Călugărească commune, Prahova County, where SAPE has two photovoltaic plants, allowing SAPE to participate in balancing the energy system by delivering energy into the system when it is needed or store when demand is lower than the supply.