Energy federations: Romania must act urgently to combat energy poverty and reduce market volatility

A possible reduction in VAT on energy is a fair measure, with the potential to mitigate the effects of market volatility, and Romania must urgently adopt more concrete and fair measures to combat energy poverty, the Federation of Energy Utility Companies' Associations (ACUE) and the Energy Employers' Federation (FPE) consider."The proposal recently launched by the energy authorities to reduce VAT on energy represents a rapid and fair measure, with the potential to mitigate the effects of market volatility. Its adoption would contribute to Romania's alignment with the policies promoted at European level and we believe that it would represent one of the desirable courses of action for the protection of all consumers. In fact, in February 2025, the European Commission presented a plan for reducing energy costs in the EU, which also includes the recommendation that member states reduce national electricity taxes to support consumers and the economy. The measure was applied by most European states," a joint statement from the two organizations states.The document draws attention to the fact that Romania must urgently adopt more concrete and fair measures to combat energy poverty, reduce pressure on the public budget and capitalize on the resources available to protect vulnerable consumers. Current interventions through generalized caps on electricity and natural gas prices have proven inefficient, costly and generating distortions in the functioning of the energy market, emphasize ACUE and FPE.According to them, the package of measures must not lack the correct definition of the vulnerable consumer, which is not properly updated and does not sufficiently reflect the criteria imposed by the European Commission. Identification and support tools are not implemented efficiently, and coherent and interconnected databases between institutions are missing."In the context of discussions about insufficient budgetary resources, we point out that Romania is losing non-reimbursable European funds due to the administrative inability to correctly define and identify vulnerable consumers of electricity and natural gas. The European Commission has issued clear warnings that, without a clear framework, the amounts allocated through numerous programs will not be disbursed," the statement reads.The document also recalls that Romania has requested around 1.4 billion euros through REPowerEU, part of the funds from the Energy Component of the PNRR (e.g. subsidies for energy efficiency at the household level), which are conditioned, however, by the implementation of the protection of vulnerable consumers.The European Social Climate Fund provides financial support to support vulnerable households, vulnerable micro-enterprises and vulnerable transport users. Romania can benefit from an allocation of between 5.05 and a maximum of 6.01 billion euros, starting with 2026, if it finalizes the Social Climate Plan (including establishing the number of vulnerable households and micro-enterprises) by June 30, 2025 at the latest, the press release states."The national budget is already facing major pressures. Without urgent reforms and targeted policies, Romania risks losing access to important European funds and worsening imbalances in the energy sector," the two federations warn.ACUE is a representative federation in the electricity, oil, gas and energy mining sectors, representing the interests of major companies in the fields of production, distribution, supply of electricity and natural gas and related services. ACUE represents 23 companies in the energy sector, which amounts to over 25,000 employees and an annual turnover of over 5.5 billion euros.The Energy Employers' Federation, founded in 1991, represents 95% of Romania's oil and gas industry.