Romania and other Eastern European countries call for increased EU funding for the green transition

Romania, together with several Central and Eastern European countries, is urging the European Union to increase financial support for the energy transition, warning that climate targets will become increasingly difficult to achieve without additional funding.

Twelve member states seek a stronger Modernisation Fund

According to a letter sent to the European Commission and reviewed by Reuters, 12 EU member states, including Romania, Poland, Bulgaria and Estonia, are calling for the strengthening of the Modernisation Fund, the main financial instrument that helps less-developed member states phase out fossil fuels.

The document was also signed by Greece, the Czech Republic, Croatia, Hungary, Latvia, Lithuania, Slovakia and Slovenia.

More than €20 billion invested since 2021

The Modernisation Fund is financed through revenues generated by the European Union Emissions Trading System (ETS). Since its launch in 2021, the mechanism has directed more than €20 billion toward clean energy projects and the modernization of energy infrastructure in beneficiary countries.

These investments have supported the development of renewable energy, improved energy efficiency and reduced dependence on fossil fuels.

Beneficiary countries warn of growing challenges

In their letter to the European Commission, the signatory governments argue that the current economic and geopolitical climate requires a significant increase in funding.

“In the current political and economic context, marked by growing uncertainty and geopolitical risks, predictable financing mechanisms remain an essential condition for the success of the EU’s energy transition,” the letter states.

The countries are requesting an increase in funding levels to reflect the rising costs associated with transforming energy systems and meeting the European Union’s climate objectives.

Debate over the future of the ETS system

The request comes as the European Commission prepares a review of the ETS, scheduled for July. The reform aims to align the system with the EU’s 2040 climate targets.

However, the discussion has become more complex due to concerns about Europe’s industrial competitiveness. Some countries, including Italy and the Czech Republic, have called for a relaxation of certain ETS rules to reduce short-term costs for domestic industries.

Such measures could reduce revenues generated through carbon allowance trading and, consequently, limit the funding available for green transition projects.

A key instrument for less-developed EU economies

In addition to the 12 signatory countries, Portugal also benefits from the Modernisation Fund. The mechanism is designed to reduce economic disparities across the European Union and ensure that less-developed member states can keep pace with the bloc’s climate ambitions.

For Romania, the fund remains one of the most important sources of financing for renewable energy investments, energy grid modernization projects and efforts to reduce reliance on fossil fuels.