Renewables

Romania rolls out agricultural land law amid renewables producers outcry

Romania agricultural land law renewables

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Published

August 20, 2020

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Published:

August 20, 2020

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RWEA and PATRES have warned the rules coming into force on October 13 would make it nearly impossible to develop renewable energy projects on land outside cities. Romania introduced a string of categories of individuals and entities that will have priority in buying agricultural land and it can’t be repurposed.

President of Romania Klaus Iohannis enacted a legislation package restricting the conditions for transactions of agricultural land outside buildable areas. Following a parliament vote in June, as the three-year procedure was coming to a close, the Romanian Wind Energy Association (RWEA) and the Employers Organization of the Producers of Energy from Renewable Sources in Romania (PATRES) made a last-ditch attempt to convince him to return the amendments to lawmakers for reconsideration.

Use of European funds is jeopardized

As the law stipulates the purpose of the land can’t be changed, green energy companies asserted it will be nearly impossible to invest in new capacity. They asserted it makes them unable to acquire or legally obtain land outside cities, jeopardizing the absorption of European funds of over EUR 10 billion. The legislation will come into force on October 13.

Co-owners, spouses and relatives have priority in purchases. Investors in agricultural projects located on the land that is being sold are ranked second, followed by owners and lessors of neighboring agricultural land. Further on, farmers of up to 40 years of age, the Academy of Agricultural and Forestry Sciences and research entities that own plots nearby all have pre-emption rights.

The amendments are scheduled to come into force on October 13

Individuals from the area and the Romanian state are the last ones in the row that can buy the property before it can be placed in the open market. After that, priority is given to investors that have been active for at least five years, particularly in agriculture.

If land is resold after less than eight years, buyers must pay an 80% tax on the difference in price. The new rules also affect the privatization of companies that control agricultural land and Romania will establish its State Property Agency.

Consumers face possible energy price hikes

RWEA and PATRES have stressed the government risks noncompliance with European targets in the field of renewable energy. However, the Constitutional Court of Romania rejected a complaint filed by the opposition.

Producers of green energy warned of the impact on energy security, competitiveness and investor confidence. They claimed the decision may lead to a rise in energy prices for consumers at a time when the country is a net power importer.

The Constitutional Court of Romania rejected a complaint filed by the opposition

Romania targets a share of renewables in final energy consumption of 30.7% for 2030, the associations noted and added it translates to more than 7 GW in new capacity.

RWEA represents operators of wind power plants of 3 GW in total, compared to 1.8 GW in installed capacity controlled by the members of PATRES.

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