Preliminary assessment of the fourth payment request of Romania

boost the use of clean vehicles and fleet renewal programmes Provision in the legal act(s) indicating the entry into force of the legal act(s) to boost the use of clean vehicles and fleet renewal programmes The following legal acts to boost the use of the clean vehicles and fleet renewal programmes entered into force: • Ministerial Order No. 323 of 27 February 2020 for the approval of the Funding Guide of the Programme regarding the reduction of greenhouse gas emissions in transport, through the promotion of transport vehicles (hereinafter referred to as “Rabla Plus Ministerial Order”) was published in the Official Journal No. 174 of 3 March 2020. The Rabla Plus Ministerial Order entered into force on the same date in accordance with Article 12(3) of Law No. 24/2000 establishing rules of legislative techniques. More precisely, the default rule as described in Article 12 (1) establishes that legal acts enter into force 3 days after publication. • Ministerial Order No. 1231/2025 for the approval of the Financing Guide of the Programme for the reduction of greenhouse gas emissions in transport by promoting non-polluting and energy-efficient road transport vehicles 2025-2030 (hereinafter referred to as “Programme on the Reduction of Greenhouse Gas Emissions in Transport Ministerial Order”) was published in the Official Journal No. 364 of 24 April 2025. The Programme on the Reduction of Greenhouse Gas Emissions in Transport Ministerial Order entered into force on the same day in accordance with Article 12(3) of Law 24/2000 establishing rules of legislative techniques. • Ministerial Order No. 2261/2022 approving the Financing Guide of the Programme regarding on the scrapping of used vehicles (hereinafter referred to as “Rabla Local Ministerial Order”) was published in the Official Journal No. 832 of August 24, 2022. The Rabla Local Ministerial Order entered into force on the same day, in accordance with Article 12(3) of Law 24/2000 establishing rules of legislative techniques. • Ministerial Order No. 324/2020 approving the Financing Guide for the Programme to stimulate the renewal of the national vehicle fleet 2020-2024 (hereinafter referred to as “Rabla Ministerial Order”) was published in the Official Journal No. 175 of 3 March 2020, Part I. The Rabla Ministerial Order entered into force on the same day, in accordance with Article 12(3) of Law 24/2000 establishing rules of legislative techniques. • Law No. 239/15 December 2025 establishing measures to recover and streamline public resources and for amending and supplementing certain normative acts (hereinafter referred to as “Law No. 239/2025”) was published in the Official Journal No. 1160 of 15 December. The Law No. 239/2025 entered into force 1 January 2026 in accordance with Article XIII of the Law and the provisions of Article 4(2) of the Law No. 227/2015 40  approving the Fiscal Code stipulating that any amendments to the tax rates will enter into force at the beginning of next fiscal year after their approval). • Nine Local Council Decisions mentioned in the Evidence table (points 6-14) of different municipalities entered into force the date of their publication in accordance with Article 198(1) of the Administrative Code. By exemption, Tulcea Local Council Decision entered into force 30 days after its publication according to Article IV of the decision. The primary objective of the legal acts is to boost the use of clean vehicles and fleet renewal achieved through increasing the number of zero-emission vehicles and scraping polluting vehicles, EURO 3 and below. The two objectives are embedded in the legal framework defined by the above-mentioned legal acts (Evidence Nos. 2-15). In particular, the design of the schemes, the eligibility criteria, the financial and fiscal incentives, their structure and differentiated support for electric/hybrid/traditional vehicles and mandatory scrappage conditions attached to these schemes demonstrate that the legislation is aimed at boosting the use of clean vehicles and supporting fleet renewal. The legal act(s) shall include financial and fiscal incentives to: - increase the number of zero-emission vehicles; - scrap polluting vehicles (EURO 3 or below) Financial incentives Fiscal incentives Increase the number of zero- Ministerial Order No. 323/2020, Law No. 239/2025. emission vehicles with all subsequent amendments. Nine Local Council Decisions Ministerial Order No. 1231/2025. of different municipalities, as mentioned above. Scrap polluting vehicles (EURO Ministerial Order No. 323/2020, Law No. 239/2025. 3 and bellow) with subsequent amendments. Ministerial Order No. 1231/2025. Ministerial Order No. 324/2020, with subsequent amendments. Ministerial Order No. 2261/2022, with subsequent amendments. As regards the financial incentives to increase the number of zero-emission vehicles, the Romanian authorities implemented two programmes providing financial incentives to increase the number of zero-emissions vehicles, namely the Rabla Plus Programme and the Programme on the Reduction of Greenhouse Gas Emissions in Transport (2025–2030). Both programmes provide financial incentives to purchase zero-emission vehicles and to scrap polluting vehicles (EURO 3 and below). The Rabla Plus Ministerial Order approved the Rabla Plus Programme (Evidence No. 2). Article 3(1)-(3) establishes the purpose of the programme, namely, to provide financial incentives from the Environment Fund, in the form of an eco-voucher, for the purchase of new electric or hybrid vehicles in exchange for the scrapping of used vehicles. 41 According to Article 2, letter g) of the Rabla Plus Ministerial Order, electric vehicles are considered zero emission vehicles. In terms of eligible beneficiaries, Article 8 outlines the rules for individuals (Romanian residents) to receive the eco-voucher. Article 9 This article lists the types of legal entities (e.g., schools, NGOs, businesses, and public institutions) that can apply for the programme. To qualify, they must meet specific conditions, such as deregistering an old vehicle, working with an approved producer, and complying with administrative steps like destruction and registration proof. Article 7(4) provided that all users purchasing new electric or hybrid vehicles would receive an eco-voucher of variable value depending on the type of vehicle purchased. This value varied during the implementation of the programme, as follows: • for a new electric vehicle or a new vehicle with a hydrogen fuel cell: RON 45 000 in 2020, RON 51 000 from 2022 and RON 25 500 from 2024 • for hybrids or electric motorcycles: RON 20 000 in 2020, RON 26 000 from 2022 and RON 13 000 from 2024. Based on Article 7(5), during 2022 and 2023, beneficiaries scrapping two used vehicles could benefit from an eco-voucher with an increased value of RON 54 000 for full-electric vehicles and of RON 29 000 for hybrid vehicles, compared to the value of the eco-voucher for one car scraped. Furthermore, an additional amount equal to RON 1 500 was added to the eco-vouchers for scraping vehicles with manufacturing date older than 15 years with EURO 3 or lower emission standard. By exemption, according to Article 7(2) of the Rabla Plus Ministerial Order beneficiaries, like public institutions and administrative territorial units, would benefit from an eco-voucher of RON 120 000 when purchasing a new vehicle, without being required to scrap an old vehicle. The programme was implemented between 2020-2024. The Programme on the Reduction of Greenhouse Gas Emissions in Transport Ministerial Order approved the continuation of the previous Rabla Plus programme, with similar main characteristics (Evidence No. 5). Article 2 defines the objective of the Programme as the renewal of the vehicle fleet by granting non-reimbursable eco-vouchers for the purchase of new vehicles in exchange for the scrapping of older ones. According to Article 5, letter i) of Programme on the Reduction of Greenhouse Gas Emissions in Transport Ministerial Order electric vehicles are considered zero-emission vehicles. The financial incentive consists in eco-vouchers offered for the purchase of new vehicles, differentiated by type of vehicle, that strongly favour low and zero-emission vehicles, as provided by Article 8(4): RON 10 000 for internal combustion vehicles, RON 12 000 for hybrids, RON 15 000 for plug-in hybrids, RON 37 000 for pure electric or hydrogen vehicles and RON 120 000 for pure electric or hydrogen vehicles purchased by public institutions/local authorities. According to Article 5, letter f) which defines the new vehicles that can be purchased under this programme, eligibility is strictly conditioned on quantified CO₂ emission thresholds, and diesel vehicles are explicitly excluded from the programme. With respect to the financial incentives to scrap polluting vehicles (EURO 3 or below), the Rabla Plus Programme and the Programme on the Reduction of Greenhouse Gas Emissions in Transport (2025–2030) also introduced financial incentives to scrap polluting cars, as explained above, since according to the eligibility conditions, the eco-voucher for the purchase of a new vehicle is conditional to the scrapping of an used vehicle (Article 7(1) of the Rabla Plus Programme Ministerial 42 Order and Article 2(1) of the Programme on the Reduction of Greenhouse Gas Emissions in Transport Ministerial Order). For both programmes, the used vehicles to be scrapped have to be at least EURO 3 category. Article 2 point i) iii) of the Rabla Plus Programme Ministerial Order (Evidence No. 2) defines used vehicle as those with a seniority of at least 6 years from the year of manufacture. Article 2, letter k), point 2 of the Programme on the Reduction of Greenhouse Gas Emissions in Transport (2025–2030) Ministerial Order (Evidence No. 5) defines used vehicle as those with a seniority of at least 8 years from the year of manufacture. In addition to the Rabla Plus Programme and the Programme on the Reduction of Greenhouse Gas Emissions in Transport (2025–2030), Romania also used the Rabla Programme and the Rabla Local Programme to provide financial incentives to scrap polluting vehicles. The Rabla Local Ministerial Order approved the Rabla Local Programme providing financial incentives in the form of eco-voucher for scrapping old vehicles (Evidence No. 4). The Ministerial Order was subsequently amended by Order No. 864/2023. According to Article 2 of the Rabla Local Ministerial Order non-reimbursable financial incentive will be granted for used vehicles that are at least 15 years old with respect to the manufacturing year in exchange for their scrapping. The seniority condition for the used vehicles to be scrapped provided by Article 2 corresponds to vehicles EURO 3 and below, as explicitly mentioned by Article 10 letter c) of the same Order. Article 8(1) defines the value of an eco-voucher equal to RON 2 400 for each scrapped vehicle. Furthermore, Article 9(1) letter g) requires eligible applicants to agree not to buy the next 3 years a new vehicle with EURO 5 or above. The programme was implemented in 2022 and 2023. The Rabla Ministerial Order approved the Rabla Programme (Evidence No. 3). Article 3(1) establishes the purpose of the programme, namely, to provide non-reimbursable financing in the form of an eco-voucher, for the purchase of new, less polluting vehicles in exchange for the scrapping of used vehicles. Differently from the Rabla Plus Programme (whose objective was the purchase of new vehicles – electric and hybrids), this programme allowed the purchase of new vehicles, classics or hybrid vehicles (with a maximum price of EURO 60 000). According to Article 2, letter f) a vehicle to be scraped is a used one at least 6 years old with respect to the manufacturing year, which corresponds to EURO 5 and below. Initially, according to Article 6 (1), the value of the eco-voucher was RON 6 500 for scrapping an old vehicle and RON 3 500 for scrapping an old motorcycle, modified in 2022 to RON 6 000 for one scrapped vehicle and RON 9 000 for two scrapped vehicles and increased starting with 2023 to RON 7 000 for one scrapped vehicle and RON 10 000 for two scrapped vehicles. The programme was implemented starting 2020 until 2024 (included). With respect to the fiscal incentives to increase the number of zero-emission vehicles, the Romanian authorities addressed the milestone requirements concerning the fiscal incentives, by adopting new provisions in the Fiscal Code and several regulations at local level. 43 In December 2025, Romania adopted Law No. 239/2025 changing the fiscal provisions related to car taxation (Evidence No. 15). Article XII, point 43 of Law No. 239/2025 amends Article 470(2) of the Fiscal Code, introducing a new formula for the taxes on vehicles’ ownership changing the way in which taxes on the ownership of passenger vehicles are designed. In particular, it modifies the criteria and the calculating method of the annual vehicle’s ownership tax, differentiating the tax level depending on both cylinder capacity (the only criterion previously considered in the tax calculation) and pollution standards. Lower tax rates are applied to vehicles meeting more stringent pollution norms (electric vehicles with zero- emission and hybrid vehicles with tailpipe emissions above 50 g CO2/km), and progressively higher tax for larger engines and lower environmental performance. With these amendments, resulting in lower tax coefficients for vehicles with improved environmental performance, the differentiated fiscal treatment provides fiscal incentives for the acquisition of zero-emission vehicles, respectively electric vehicles which are taxed the lowest. Additionally, Article XII, point 46 of Law No. 239/2025 introduces a new article 470(31) in the Fiscal Code providing an additional fiscal incentive: a fixed annual vehicle tax (flat tax) of RON 40 for electrically powered vehicles, representing a preferential tax treatment for zero-emission vehicles directly into the tax system compared to all other vehicles that are taxed in a progressive manner depending on engine capacity and pollution norm. Also, based on Article XII, point 45 of Law No. 239/2025 hybrid cars with CO2 emissions lower than 50g/km benefit from a tax reduction up to 30%, depending on local authorities’ decision. Furthermore, the Romanian authorities adopted several communal legal acts (nine in total – Bucuresti, Timisoara, Focsani, Ploiesti, Alba-iulia, Piatra-Neamt, Tulcea, Buzau, Constanta) between 2021 and 2025 introducing fiscal incentives to increase the number of electric vehicles (defined by the above specific legal acts as zero-emission vehicles), in addition to the ones provided by the Fiscal Code (Evidence Nos. 6-14). These local legal acts provide indirect fiscal incentives for the purchase of zero-emission vehicles by granting exemptions or reductions on the parking fee in public spaces for hybrid and/or electric vehicles like allowing them to use public paid parking without paying the parking fee in 9 main cities in Romania. With respect to the fiscal incentives to scrap polluting vehicles (EURO 3 and below), Law No. 239/2025 also introduces fiscal incentives to exchange polluting vehicles with less polluting ones. Article XII, point 45 of the Law provides for a reduction of up to 30% of the tax on vehicles’ ownership for hybrid vehicles, combined with the establishment through Article XII, point 46 of the Law of a very low fixed tax (RON 40) for electric vehicles and thus generating a substantial tax differential compared with EURO 3 or below vehicles. Thus, the amendments to Article 470(3) of the Fiscal Code establish a differentiated tax burden based on emission class, age, or environmental impact which provide an incentive for exchanging a polluting vehicle with a less polluting one. The Law No. 239/2025 reshapes ownership costs to make retaining old polluting vehicles progressively more expensive relative to less polluting ones. By differentiating the level of taxation according to the vehicles’ environmental performance, the law increases the total cost of ownership of old polluting vehicles (EURO 3 and below) treating zero-emission and low-emission vehicles more favourably. Through this cost increase for holding old polluting vehicles, the resell value of these vehicles is set to decline as well. This change in relative and absolute prices although not always suffi