Government seeks solutions to cover the costs with the CO2 allowances of Oltenia Energy Complex

In the Government meeting of 13 September, a Memorandum was approved on Financial mechanisms necessary to cover the costs with CO₂ allowances of Oltenia Energy Complex, in order to ensure electricity supply security and maintain energy capacities in the short and medium term, in the process of transition to decarbonization in the energy sector.

The document, prepared based on the request of Oltenia Energy Complex (CEO), has two components, Doru Visan, State Secretary within the Ministry of Energy, mentioned.

• Long-term measures: empowerment of the Ministry of Energy by the Government to start negotiations with the European Commission on the national energy security that is affected, the problem being common for other states as well;
• Short-term measures: starting negotiations between Oltenia Energy Complex and Eximbank, for a loan to cover the cost of CO₂ allowances, to avoid incurring penalties.

The Memorandum submitted to the Government represents the document under which it takes note of the problem of increase in the price of CO₂ allowances and their impact in the activity of Oltenia Energy Complex, and also on the national energy security,” Sorin Boza, President of Directorate of Oltenia Energy Complex, commented.

“Government supports and agrees with the establishment of financial mechanisms to compensate the deficit of CO₂ allowances of Oltenia Energy Complex. Currently, several financial mechanisms are identified, but before being approved and applied they must be agreed with the European Commission, the Memorandum being the formal document through which these discussions and negotiations can start,” Sorin Boza added.

Discussions with the European Commission will be carried out according to community practices, at the level of Government representatives. The discussions will also be attended by representatives of CEO.

As Vice-President of the Euracoal association (The voice of coal in Europe), Sorin Boza has recently attended a meeting for informing the European public opinion on the high costs of emission allowances that coal-fired energy producers must pay, organized by Poland’s Energy Minister.

In late August, the price of CO₂ allowances had exceeded EUR 20/unit, reaching a value over three times higher than last year.

The President of CEO Management Board has repeatedly warned in the past on the negative effect of the cost of these allowances on company’s revenues. He has also talked about the lack of mechanism through which CEO would get back some of this money, to emit less in the future and invest in retrofitting.

For the energy sector, especially for CEO, it is very important to find solutions in order to ensure the financing of acquisition of CO₂ allowances, whose prices have exploded lately, endangering the activity of the company.