Hydrogen law and regulation in Romania

1. CURRENT STATE OF HYDROGEN PROJECTS IN ROMANIA

In 2018 Romania signed the Hydrogen Initiative. By signing this proposal, Romania committed to continuing research and innovation into how it will use hydrogen as an energy source for the future. Hydrogen and its associated technologies are being explored for use in the electricity storage sector, the transport sector and in industry. 

According to the Integrated National Plan in the field of Energy and Climate Change 2021-2030 (“PNIESC”), submitted to the European Commission in April 2020, Romanian authorities are considering the implementation of a number of pilot and demonstration projects to promote the use of hydrogen in the production of electricity and in the industrial sectors.

In order to promote decarbonisation and the adoption of these new technologies, there will need to be a consolidation of the legal framework, intensifying dedication to research and innovation (in both state-owned and private companies), increasing and diversifying funding sources and developing educational resources, as well as supporting projects that promote the increased use of hydrogen.

Energy & Industry

At present, hydrogen is used mainly in the chemical industry, specifically in refineries and for ammonia production. In Romania there are currently 13 industrial producers of hydrogen (all from fossil fuels), and the hydrogen market comprises of two main types of players: captive producers, which produce hydrogen for their direct customers or their own use; and by-product hydrogen resulting from chemical processes, the chlor-alkali industry. 

The Societatea Națională de Gaze Naturale Romgaz SA Mediaș (“Romgaz”), the largest natural gas producer in Romania, plans to build an electricity plant that will integrate hydrogen into the production of electricity through a 200MW natural gas power plant in Turnu Severin – Halanga.

In June 2020, Romgaz and Liberty Galați, the largest integrated steel plant in the country, signed a memorandum for the construction of a gas plant alongisde wind and solar PV capacities. The aim of the €1.2 billion project is to develop greenfield investment projects, specifically the development of natural gas-fired electricity generation and hydrogen, to be used by the steel plant. The investment should make the Galati steel plant carbon-neutral by 2030. 

Research and education

Several public universities and research institutes in Romania are involved in hydrogen and fuel cell research and development. In particular, a number of projects are conducting intensive investigations on various issues related to hydrogen energy, particularly in relation to hydrogen storage. Public funding for the research and development of hydrogen is available through the Executive Unit for the Financing of Higher Education, Research, Development and Innovation (“UEFISCDI”) subordinated to the Ministry of Education and Research. From public estimations, Romanian research authorities have spent more than €20 million for hydrogen and fuel cell related research since 2000.

The National Hydrogen and Fuel Cell Centre (“ICSI”) develops and implements projects on new technologies (including hydrogen projects). The ICSI was a partner to the HyUnder project and has collaborated with the Joint Technology Initiative on Hydrogen and Fuel Cells Research Group and N.ERGY Group.

In 2012, the Romanian Association for Hydrogen Energy (“AEHR”) was founded. The AEHR aims to support actions related to the hydrogen economy and fuel cells, as well as the infrastructure and renewable energy associated with them. This will be achieved through: technology transfer, promoting Romanian contributions, close cooperation with international and national associations, supporting the implementation of educational policies and research and the promotion of education.

The “Choose Renewable Hydrogen” initiative currently includes companies and associations which are also active in Romania, such as EDP, Enel, Iberdrola, MHI Vestas. The initiative is expected to develop renewable hydrogen projects under the scope of the European Green Deal.

2. MARKET PROSPECTS FOR HYDROGEN 

Financial support and incentives

The use of pricing tools to provide incentives for low-carbon transport will be useful in helping deploy hydrogen in the transport sector in Romania. This deployment can be achieved by encouraging the purchase of “green” cars, the use of low-carbon fuels and reducing the use of cars, generally. Specific tools already implemented to achieve these objectives are represented in the application of tax reductions for green vehicles (e.g. hydrogen, methane and electric vehicles).

Hydrogen based projects may also be eligible for the Contract for Difference mechanism. This is currently being developed by the Ministry of Economy, Energy and Business Environment (“MEEMA”) as a viable option for implementing a support scheme for the development of the new low-carbon generation sector in Romania.

The InvestEU programme also provides support in developing infrastructure for alternative fuels: electricity, hydrogen and liquefied or compressed natural gas mixed with bio-methane (> 50%) and other low and zero emissions technologies.

Several companies that are active in wind energy production have proposed a number of storage projects to be financed by European funds, through the 10d mechanism - Modernization Fund. One of the projects, with a value of €50 million, “uses PEM electrolysers (alkaline electrolysers with proton exchange membranes - ed.) in order to balance the production of wind energy and to produce hydrogen from excess (or cheap) electricity, which will be introduced into the natural gas network or used in industrial applications for the decarbonisation of industrial processes (steel industry, ammonia, petrochemical industry)”.

3. CHALLENGES FACING HYDROGEN PROJECTS IN ROMANIA

Legal framework

Romania has yet not developed hydrogen specific legislation. This will be instrumental for the further deployment of hydrogen. 

It is also important that the country removes any barriers that may affect hydrogen production at fuel supply level; this is because hydrogen production is classified as an industrial production activity, regardless of its origin of production.

4. REGULATION OF HYDROGEN 

Policy and government programmes

According to PNIESC, in order to achieve energy security, Romania needs to “diversify its resources, including the development of new capacities of renewable energy and integration with other markets in the region as well promoting the use of hydrogen”.

The Romanian Government has recently adopted a Memorandum initiated by the Ministry of European Funds and supported by the Ministry of Education and Research. The Memorandum proposes funding, in the next programming period (2021-2027), for Romania’s first hub dedicated to hydrogen, for research and development in respect to the use of hydrogen in transportation, district heating and nuclear energy generation, as the “fuel of the future”.

Primary legislation

An amendment was made the Energy Law on 24 July 2020 in order to include hydrogen production provisions (“Law 155”). 

In accordance with Law 155, the general regulatory framework on hydrogen will be established by the energy regulator, ANRE. ANRE will elaborate on the technical and commercial regulations regarding the operation of a hydrogen terminal and the methodology of related tariffs, within 6 months from receiving an application to authorise the construction of the terminal. Tariffs for services provided by the hydrogen terminal operator, regarding the operation of the terminal (e.g. hydrogen storage facilities), are established by the economic operator concerned. These will be approved by ANRE and published on the operator's own web page.

Generation

Law 155 introduced the requirement for a license to be held for the commercial generation of hydrogen. Secondary legislation is soon expected which will provide further regulatory provisions in respect of licensing and the operation of hydrogen production.

Connection and distribution 

According to Law 155, ANRE will need to establish the conditions and standards for the injection of hydrogen into existing natural gas networks. This will facilitate hydrogen blending into the gas grid.

Transport, import and export of hydrogen

In March 2017, the National Policy Framework for Market Development Regarding Fuel Alternatives in the Transport Sector and for the Installation of Relevant Infrastructure in Romania was established. The national legislation and policy framework do not include any specific number of hydrogen filling stations that are to be developed as demonstration projects. 

In Romania, no specific legal framework has been developed regarding the design, authorisation, construction and operation of hydrogen filling stations.

The policy on the installation of the infrastructure for the alternative fuels sets out the minimum requirements for the creation of alternative fuel infrastructure, including recharging points for electric vehicles and refuelling points for compressed or liquefied natural gas and hydrogen. It also outlines common techniques for recharging and refuelling points, as well as requirements for user information.
Separately, the law 37/2018 on the promotion of the ecological transportation provides that local public authorities, autonomous utilities and private companies which supply transport services (e.g. taxi companies) are obliged to ensure that at least 30% of their total future fleet are “green” transport solutions. These may include electric, hybrid, hybrid plug-in or hydrogen (“FCV”) vehicles, motors powered by compressed natural gas, liquefied natural gas propulsion engines and biogas propulsion engines.

Secondary legislation and other legal documents

The draft of Romania’s National Energy and Climate Plan includes various references to hydrogen. There have also been a number of recent public speeches from various stakeholders advocating for a transition to a hydrogen economy from a carbon-dependent one. 

Regulation of hazardous activities

Hydrogen is classified as a dangerous substance for transport and is included in the list of dangerous goods as per the European Agreement concerning the International Carriage of Dangerous Goods by Road (“ADR”), which has been implemented at a national level. From a legal and administrative perspective, the same regulations apply for the storage of hydrogen as the storage of other flammable and dangerous gases.

5. REGULATORY BODIES 

The Romanian Energy Regulatory Authority is responsible for the drafting of the regulatory framework regarding technologies such as hydrogen. 

Regulatory BodyRole
Local Authority / Town and Country Planning Authority
  • Regulates the use of land
  • Undertakes Environmental Impact Assessment
  • Usually has the role of the hazardous substance authority in relation to storage
National Agency for Mineral Resources
  • Manages the national pipeline system of oil and natural gas transportation
Transgaz
  • Technical operator of the national gas transmission system and is responsible for its operation. It monitors quality, safety, efficiency and environmental conditions.

6. UPCOMING DEVELOPMENTS 

Over the next few years it is anticipated that the government will promote and foster the decarbonisation of economy, industry and business by supporting the introduction of new technologies, such as hydrogen and fuel cells, in order to reduce emissions and protect the environment.

There is discussion amongst decision-makers to reshape the existing energy legislation and as such it is expected that the legislation and rules supporting decarbonisation will be updated and simplified in the near future. At a national and local level, decision-makers should find appropriate ways to promote new technologies, such as hydrogen, in order to attract international as well as domestic investment. 

Portrait of Varinia Radu
Varinia Radu
Partner
Bucharest
Portrait of Raluca Diaconeasa
Raluca Diaconeasa
Associate
Bucharest