The Romanian government is discussing a proposal to provide state aid to the steel industry in response to the sector's challenges with the high costs of decarbonization. 

This initiative, outlined in a memorandum from the Ministry of Economy and quoted by Profit.ro, comes after steel companies reported significant economic difficulties, citing soaring energy prices, disruptions from the war in Ukraine, and competitive disadvantages due to state subsidies in other countries. 

Key industry players, including Liberty Galați, TenarisSilcotub, and Erdemir Romania, met with Minister of Economy Stefan-Radu Oprea in March to discuss the financial strain caused by decarbonization efforts. 

Liberty Galați, Romania's largest steel producer, reported a substantial loss of RON 2.2 billion last year, nearly triple that of 2022. The company attributes these losses to high energy costs and the competitive pressures from cheaper imported steel.

The Ministry of Economy currently has a budget of approximately EUR 80 million earmarked for this support scheme. However, the memorandum notes that this amount is likely insufficient. It suggests increasing the budget to around EUR 280 million, which could be considered in the upcoming budget revision. 

The proposed state aid would be granted between 2025 and 2030, pending approval from the European Commission. 

The document emphasizes the importance of this support to prevent the Romanian steel industry from falling behind its counterparts in other EU countries, which have already received significant state aid for decarbonization.

andrei@romania-insider.com

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