The industrial sector plays an essential role in the transition to the circular economy in Romania, having the opportunity to become an engine of innovation and sustainability, so the Strategy of Romania for the Circular Economy places a special emphasis on the transformation of this sector, realizing the significant impact it has on the use of resources and the environment.

Within the circular economy, the industrial sector is called upon to adopt practices that minimize the generation of waste and optimize the life cycle of products. A crucial aspect is ecological design, which aims to create products that are durable and easy to recycle. This involves innovations in the materials used, production processes and product design to facilitate subsequent disassembly and recycling.

The industrial sector can benefit from more efficient resource management, with an emphasis on recycling and reuse. Collaboration between companies to exchange secondary raw materials and cooperation in implementing circular practices are key aspects of this transition.

Another crucial element is the support given to innovation in the industrial sector. The Romanian government encourages research and development in clean technologies, as well as the adoption of innovative solutions to make production processes more efficient. This creates opportunities for companies to adopt less polluting technologies and invest in innovative ways of using resources.

Waste management and recycling is a fundamental pillar having a significant impact on the conservation of resources and the reduction of environmental pollution. In this sense, the aim is to improve the recycling infrastructure in order to increase the capacity to collect and process recyclable waste, so that a greater proportion of the waste can be reintroduced into the economic circuit.

The adoption of the document paves the way for key policies to support the transition to a circular economy.

The Circular Economy Strategy of Romania has identified the sectors with the greatest potential for achieving the circular economy, as follows: 

• Agriculture and Forestry

• Automotive industry

• Constructions and buildings

• Food and drinks

• Packaging

• Textile products

• Electronic and ICT products

• Waste

• Water and waste water

Extended Producer Responsibility (EPR) is one of the important tools for implementing the waste hierarchy according to priority starting from prevention, preparation for reuse, recycling, recovery and disposal. It is an effective tool whose main objective is to reduce the amount of waste generated and improve recycling rates.

This economic instrument, which transfers responsibility for waste management from public authorities to producers of goods, was introduced into EU law in 1994 and has gradually been applied to a wide range of products, namely packaging, batteries, electrical and electronic equipment, tires and vehicles, and in the near future also for textiles. EPR can encourage the change of behavior of the actors involved in the value chain of products from producers, traders, consumers, authorities, waste management operators, collectors, recyclers.

Extended Producer Responsibility is implemented through extended producer responsibility organizations that collect sums of money from producers, money that is used to finance waste management operations such as collection, sorting and recycling.

Although good results have been recorded in terms of recycling rates for packaging and WEEE there are still a number of challenges to be overcome. One of the challenges is the need to extend EPR to a wider range of products, but also to improve the efficiency of collection and recycling systems.

• Amendments to the Waste Framework Directive (new waste streams)

This initiative aims to contribute to the goal of the circular economy action plan to significantly reduce total waste generation and halve the amount of residual (non-recycled) municipal waste by 2030.

Lack of financing resources and technological solutions are the main bariers for progress towards to a circular economy. In order to overcome these bariers more actions are needed to remove identified regulatory barriers and address market failures by making legal  provisions clearer, more specific and harmonised.

The food and textiles sectors represent top resource intensive sectors causing significant negative environmental externalities as they are not in line with waste hierarchy, despite the legal requierements.

Reducing food waste can contribute to increased food security by improving supply chain efficiency and productivity. Increasing the efficiency of food systems and supporting consumer behavioural change to reduce food waste could contribute to food price decreases thereby improving  access to food for more people.

The textile sector is resource intensive and the waste management costs of used clothing and household textiles are not internalised in the price of new products. Currently a large volumes of textile wastes are disposed of in residual waste, the cost of disposal and the environmental externalities of that disposal including emissions from incineration and landfilling are also not internalised.

Specific objectives for WFD proposal as regards textile waste is to improve textile waste management in line with the ‘waste hierarchy’ prioritising waste prevention, preparing for re-use and recycling of textiles over other recovery options and disposal and implement the polluter pays principle.

This legal instrument is regulating all aspects of textile waste management, including the specific obligations to ensure separate collection, treatment and reporting requirements and also creating the conditions for the scaling up re-use and recycling of textiles infrastructure. The EPR obligations for textiles and economic incentives as “eco-modulation of fees” will make textile products more sustainable.

The separate collection obligation for textiles in the WFD is coming into force on 1 January 2025. According to information from Member States, it is estimated that the separate collection systems and the sorting and recycling infrastructures are unlikely to be ready to handle the expected additional amounts to be collected. Sorting is expected to take place in most Member States close to the waste collection points while recycling is not expected to take place in all countries and is likely to be located in regions close to the textile production centres and existing infrastructure bases.

• The impact of the Regulation on packaging waste

Packaging waste is increasing: Total packaging waste generated is forecasted to increase from 78 million tonnes in 2018 to 92 million tonnes in 2030, and 107 million tonnes in 2040. The consequences include increased use of non-renewable resources, inefficient waste management, negative climate impacts, littering, overuse of substances of concern in packaging, low quality recycling, and excessive landfill, incineration and export at end life.

Packaging is a key environmental concern as one of the main users of virgin materials (40 % of plastics and 50 % of paper used in the EU is destined for packaging) and accounts for 36 % of municipal solid waste.

The internal market for packaging is not fully functioning because the regulatory approaches differ within Member State at least in terms of labelling requirements, defining recyclable or reusable packaging, approaches to modulating extended producer responsibility (EPR) fees creating legal uncertainty for businesses, leading to lower investment in innovative and environment friendly packaging and new circular business models.

Three groups of interlinked problems have been identified for the packaging and packaging waste current situation: continuing growing generation of packaging waste, barriers to packaging circularity and downcycling.

As the failure of the PPWD it is necessary to have  more armonisation at European level and better tackle of the current problems. The new legal provision, as Regulation, is forseen to create competitive market and level playing field for better use of natural resources and good quality recycled materials.  

This regulation will ensure that all 27 Member States fulfil their obligations at the same time and in the same way. The same requirements for all market players will provide the necessary legal certainty, reduce distortion of competition, and send clear signals to non-EU market actors intending to place products on the EU market.

• Ecological design of sustainable products

More and more products are playing a vital role in our life and the constant number of obsolete or unwanted products are daily thrown away generating unnecessary adverse environmental impacts. By applying the Ecodesign approach is forseen to address the most detrimental environmental impacts of products.

The Regulation will broaden the scope of the Ecodesign Directive both in terms of products and new kinds of requirements, having as main objectives to reduce the negative life cycle environmental impacts of products and improve the functioning of the internal market. The ecodesign requirements are based on the sustainability and circularity aspects taking into account product durability, reusability, upgradability and reparability, the presence of substances of concern in products, product energy and resource efficiency, recycled content of products, product remanufacturing and high-quality recycling, and reducing products’ carbon and environmental footprints.

This Regulation also contributes to the objectives of EU industrial policy to boost the supply of and demand for sustainable goods, deliver on sustainable production, and ensure a level playing field for products sold on the internal market.

This regulation is part of a package of initiatives presented by the Commission relating to sustainable products and fostering sustainable product choices. The package includes targeted sectoral initiatives on textiles and construction products, which address products with most significant impacts on the environment and climate, and an initiative to empower the consumers in the green transition, through better protection against unfair practices and better information.

Greenwashing or ecological misinformation is a phenomenon that has gained momentum in recent years, given the increased appetite for products, services, loans or "ecological/sustainable" investments. Claims in companies’ reports have been increasingly scrutinized by NGOs and independent experts, factual support for consumer communication claiming environmental benefits has been debated and, not the least, applying robust criteria for traded “green products” and “green services” has become a priority, as it may impact the credibility of the environmental policies and economic instruments designed to underpin the European Union’s sustainability goals.

The phenomenon attracted attention especially after the European Commission proposed common criteria against greenwashing and misleading environmental claims. Under the proposed proposal, consumers will have more clarity, stronger assurance that when something is sold as green, it is actually green and better information to choose green products and services.

Businesses will also benefit as those that make a real effort to improve the environmental sustainability of their products will be more easily recognized and rewarded by consumers and will be able to increase their sales – rather than face unfair competition. In this way, the proposal will contribute to a level playing field when it comes to information about the environmental performance of products.

The penalties expected for the companies' deviations can reach considerable amounts, therefore the subject will certainly generate a lot of attention from the business environment.

There is, however, a wider concern in this field, especially regarding loans, investments or "sustainable" insurance. We will discuss all this with the experts in the field.

The stability of the earth’s climate is under threatening. We continue to produce carbon much faster than nature can absorb it. What can we do?

Decarbonization is the process of reducing or eliminating carbon emissions. Net zero carbon is a goal that means fundamental transformation of sectors as the power, industry, mobility, buildings, agriculture, forestry and other land use, and also waste. A very complex approache is needed to put in place a sustainable transition.

Who and how will pay for the transition?

Companies are already taking into consideration innovative technologies such as renewable fuels, carbon capture and storage as solution for decarbonization. According to the International Energy Agency, direct CO2 intensity of cement production increased about 1.5% a year between 2015 and 2021 but will need to decline by 3% every year through 2030 to reach net zero.

Fossil fuels are the largest contributor to global climate change, beings responsible for more than 75 percent of global greenhouse gas emissions and nearly 90 percent of carbon dioxide emissions.

The International Renewable Energy Agency (IRENA) estimates that 90 percent of the world’s electricity can and should come from renewable energy by 2050. As the cheapest power option in most parts of the world today, renewable energy has a potential that has not yet fully valorized beings in the same time it is a real opportunity for low carbon energy sources.

International Energy Agency (IEA) estimate that net number of jobs will increase in energy sector with about 9 mil., some jobs will be lost in fossil fuel sector, but many more will be created in green energy sector. More over within related sectors new workers will be needed to manufacture electric vehicles and new appliances.

Energy security is also one of the most important gain, helping countries to be more independent by diversifying power supply options.

Energy efficiency means using less energy to do the same.

Energy efficiency is a fundamental principle of EU energy policy and must be considered by EU countries in all relevant policy and major investment decisions taken in the energy and non-energy sectors.

The public sector has to play an exemplary role in enhancing energy efficiency practices by reducing with 1.9% annual energy consumption and extention of the obligation 3% annual buildings renovation for all levels of public administration. The public sector will also play a driving role in the development of the energy services market. The new legislation also promotes local heating and cooling plans in larger municipalities.

Energy management systems is becoming a default requirement for large energy consumers exceeding 85 TJ of annual energy consumption and will be subject to mandatory audits in the event of non-compliance and enterprises. Companies with an energy consumption above 10 TJ will have to perform an energy audit and prepare an action plan for the different recommendations.

Romania’s recovery and resilience plan has responded to the urgent need to foster a strong recovery, while making Romania’s economy and society more resilient and future ready. In response to the energy market disruption caused by Russia's invasion of Ukraine, the Commission launched the REPowerEU Plan. The Recovery and Resilience Facility is at the heart of its implementation and its funding. Under REPowerEU, EU countries have updated their recovery and resilience plans with new measures to save energy and diversify the EU’s energy supplies.

In the area of climate and environmental policies, Romania’s challenges include the greenhouse-gas emissions that are set to increase and could jeopardize the achievement of 2030 and 2050 energy and climate targets. In addition, while Romania’s circular economy has potential, there is a particular need to improve infrastructure for water, waste, wastewater and air pollution management through additional investments.

We will discuss about the opportunities raised by the funds to be disbursed under PNRR, and the opportunities to improve financing mechanisms aiming to improve the impact for the environment, businesses and communities.

The objective of economic instruments (EIs) is to encourage environmentally sound and efficient production and consumption through full-cost pricing. According to OECD, EIs include effluent taxes or charges on pollutants and waste, deposit-refund systems and tradable pollution permits. EIs are often used as part of a larger economic policy, and can be an effective way of achieving specific policy goals such as enabling the producer responsibility concept.

The key economic instruments in Romania are operationalized through the Environment Fund legislation, i.e. E.O. 196/2005. Since 2005, the legal provisions have been improved, adapted to fit European requirements and the administrative capacity to secure enforcement has dveloped considerably.

However, a lot remains to be done, as Romania’s performance in many areas, especially circular economy, is still lagging.

Also, Romania is accumulating experience in implementing EIs for other categories of policies, e.g. the trade of carbon credits certificates.

What are the lessons learned until now? How could EIs be improved in the future? What will be the impact for the responsible economic actors? A healthy debate is expected.

Sustainable finance is an overarching term referring to the investment process accounting for and promoting environmental and social factors. It covers a broad swath of activities, hence the debate about standards and most effective policy tools. In this context, the corporate sustainability reporting directive (Corporate Sustainability Reporting Directive - CSRD) will soon have to be implemented in Romania as well. This new directive modernizes and strengthens the rules on social and environmental information that companies must report. A wider set of large companies, as well as listed SMEs, will now be required to report on sustainability. Is it just a new complicated compliance exercise or is it going to enable the transformation of business models towards a reduced environmental impact? What are the complementary policy drivers expected to push for sustainable financing?

The new rules will ensure that investors and other stakeholders have access to the information they need to assess companies' impact on people and the environment, and for investors to assess the financial risks and opportunities arising from climate change and other sustainability issues. Finally, reporting costs will be reduced for companies in the medium and long term by harmonizing the information to be provided.

The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.

The Government of Romania published by Government Decision the Methodology for sustainability reporting — the Romanian sustainability code, for voluntary reporting. After the initial euphoria, now the challenges for the entities in Romania appear. Many clarifications follow, and this debate is reserved for those who want to implement European legislation and use it as a potential management tool.