Commission Staff Working Document: Analysis of the recovery and resilience plan of Romania amending the approval of the assessment of the recovery and resilience plan of 29 October 2021

ity. Investment 3. Boosting energy efficiency of public buildings – This investment scales up the existing investment C5.I1 – Establishment of a renovation wave fund to finance works to improve the existing building stock, concerning energy-efficiency renovations in public buildings, under component 5 – Renovation wave, by increasing the number of energy-efficiency renovations of public buildings. This contributes to addressing CSRs 2023.3 and 2022.3 to reduce overall reliance on fossil fuels and increase the pace and ambition of renovations to advance the energy efficiency of the building stock. Investment 4. Grant Voucher Scheme to accelerate the deployment of renewable energy by households – This investment aims to increase the deployment of renewable energy by private households by providing vouchers for the installation of photovoltaic panels and battery storage systems. The investment is expected to add a total capacity of 180 000 kW of solar panels on residential buildings, and battery storage systems with a total electricity storage capacity of 300 000 kWh. This contributes to addressing CSRs 2023.3 and 2022.3 to reduce overall reliance on fossil fuels and accelerate the energy transition, in particular by deploying renewable energy faster. Investment 5. Digitalisation, efficiency and modernisation of the national electricity transmission network – This investment aims at improving the security and resilience of Romania’s electricity 12 transmission network. It consists of three strands. The first aims at improving the energy efficiency of critical network infrastructure by installing solar panels and storage units for the sole use of power stations. The second aims at equipping the transmission network operator to rapidly address bottlenecks in the network and facilitate the connection of new renewable plants. The third aims at improving the digital safety of the network through the installation of equipment to tackle cybersecurity attacks. The investment contributes to addressing CSRs 2023.3 and 2022.3 to reduce overall reliance on fossil fuels and accelerate the energy transition, in particular by upgrading energy transmission grids and increasing the interconnection. Investment 6. Pilot project for the installation of 20 MW of floating solar panels on irrigation channels – This investment aims at installing 20 MW of floating solar panels on already refurbished irrigation channels owned by the State. The measure addresses CSRs 2023.3 and 2022.3 through the deployment of additional renewable energy capacity. Investment 7. Grant Voucher Scheme to make energy efficiency improvements to households – This investment aims to decrease energy demand of households, by supporting energy-efficiency renovations of single-family residential buildings, with a focus on energy-poor and vulnerable energy consumers (at least 50% of the estimated budget of the measure being earmarked for them). Under the investment, households can apply for vouchers to finance energy-efficiency renovations that achieve at least 30% primary energy savings compared to pre-renovation state. Vouchers for energy-poor and vulnerable energy consumers also cover the installation of solar panels. This contributes to addressing CSRs 2023.3 and 2022.3 to reduce overall reliance on fossil fuels and increase the pace and ambition of renovations to advance the energy efficiency of the building stock. Table 1 – New and modified components and associated costs. Component Status Costs (EUR million) C1: Water management Modified 1 415.8 C2: Forests and biodiversity protection Modified 903.9 C3: Waste management Modified 1 233.4 C4: Sustainable transport Modified 7 384.0 C5: Renovation wave Modified 2 200.0 C6: Energy Modified 760.0 C7: Digital transformation Modified 1 835.0 C8: Tax and pensions reforms Modified 456.9 C9: Business support, research, development and innovation Modified 2 443.5 C10: Local fund Modified 1 825.0 C11: Tourism and culture Modified 449.0 C12: Healthcare Modified 1 709.8 C13: Social reforms Modified 196.7 C14: Good governance Modified 165.6 C15: Education Modified 3 515.4 C16: REPowerEU New 2 017.5 13  2.3. Other elements not covered by assessment criteria The description of the consistency with other programmes, administrative organisation, the contribution of the RRP to gender equality and equal opportunities for all, security self-assessment for investments, and planned communication strategy as reflected in the previous Staff Working Document SWD (2021) 276 remains valid. State aid and competition rules fully apply to the measures funded by the Recovery and Resilience Facility. Union funds channeled through the authorities of Member States, like the RRF funds, become State resources and can constitute State aid. When this is the case and State aid is present, these measures must be notified and approved by the Commission before Member States can grant the aid, unless those measures are covered by an existing aid scheme or comply with the applicable conditions of a block exemption regulation, in particular the General Block Exemption Regulation (GBER) declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 TFEU2. When State aid is present and it requires notification, it is the duty of the Member State to notify State aid measures to the Commission before granting them, in compliance with Article 108(3) TFEU. In this respect, the State aid analysis carried out by Romania in the RRP cannot be deemed a State aid notification. In as far as Romania considers that a specific measure contained in the RRP entails de minimis aid or aid exempted from the notification requirement, it is the responsibility of Romania to ensure full compliance with the applicable rules. 3. SUMMARY OF THE ASSESSMENT OF THE PLAN 3.1. Comprehensive and adequately balanced response to the economic and social situation The original RRP put forward a balanced set of reforms and investments addressing both the consequences of the COVID-19 pandemic and the main structural socio-economic and environmental challenges affecting Romania, pursuing cohesion objectives, and contributing towards all of the six pillars referred to in Article 3 of the RRF Regulation. The focus of the RRP remains unchanged, as the green transition and the digital transformation are at the core of the RRP. The green reforms and investments included in the RRP are boosted by the new REPowerEU measures. Digital reforms and investments are expected to help modernise Romania, supporting areas with the largest investment gaps through the digitalisation of public services and support for hospitals and schools. 2 Commission Regulation (EU) 2023/1315 of 23 June 2023 amending Regulation (EU) No 651/2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty and Regulation (EU) 2022/2473 declaring certain categories of aid to undertakings active in the production, processing and marketing of fishery and aquaculture products compatible with the internal market in application of Articles 107 and 108 of the Treaty, OJ L 167, 30.6.2023, p. 1–90, available at: https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=CELEX%3A32023R1315. 14 The REPowerEU chapter impacts significantly the contribution of the RRP to the first pillar on green transition. The nature and extent of the modifications to the RRP do not have an impact on the previous assessment of the plan representing to a large extent a comprehensive and adequately balanced response to the economic and social situation, and on its appropriate contribution to all six pillars referred to in Article 3 of the RRF Regulation. The measures in the REPowerEU chapter contribute to achieving the Union’s 2030 climate targets and the objective of EU climate neutrality by 2050 as they aim to accelerate the deployment of renewables by introducing measures to streamline permitting and administrative procedures. The chapter also includes an investment in new renewable energy capacity. In addition, the new REPowerEU measures include support for energy efficiency renovations of buildings and education and skills development for the green transition. All measures included in the REPowerEU chapter are expected to significantly contribute to the green transition, or to addressing the corresponding challenges. Table 2 – Coverage of the six pillars of the Facility by the new or modified RRP components Health, and Smart, Social and economic, Policies for Green Digital sustainable territorial social and the next transition transformation & inclusive cohesion institutional generation growth resilience Pillar I - Green transition 1 —Water ● ○ ○ management 2 — Forests and ● Biodiversity protection 3 — Waste ● ○ ○ management 4 — Sustainable ● ● ● ○ transport 5 — Renovation ● ○ ○ Wave Fund 6 — Energy ● ○ Pillar II – Digital transformation 7 — Digital ● transformation Pillar III Smart, sustainable and inclusive growth 8 — Tax pension ○ ○ ● ● ○ reforms 9 — Business ● ● Support, research, development and innovation 15  Health, and Smart, Social and economic, Policies for Green Digital sustainable territorial social and the next transition transformation & inclusive cohesion institutional generation growth resilience Pillar IV – Social and territorial cohesion 10 — Local Fund ● ○ ● 11 — Tourism and ○ culture Pillar V - Health, and economic, social and institutional resilience 12 — Healthcare ○ ○ ○ ● 13 — Social reforms ○ ● ● 14 — Good ● governance Pillar VI – Policies for the next generation 15 — Education ○ ● ○ ○ ● 16 - REPowerEU ● ○ ○ ○ ○ Key: “●” investments and reforms of the component significantly contribute to the pillar; “○” the component partially contributes to the pillar *** Taking into consideration all reforms and investments envisaged by Romania its modified recovery and resilience plan continues to represent, to a large extent, a comprehensive and adequately balanced response to the economic and social situation, thereby contributing appropriately to all six pillars referred to in Article 3 of the RRF Regulation, taking the specific challenges and the financial allocation of Romania into account. This would warrant a rating of A under criterion 2.1 in Annex V to the RRF Regulation. 3.2. Link with country-specific recommendations and the European Semester The modified plan continues to effectively address a significant subset of the challenges identified in the relevant CSRs. The modified plan still maintains to a significant extent the ambition of the investments and reforms, while also introducing new reforms and investments under the REPowerEU chapter that help maintain the coverage of a significant subset of the challenges identified in the CSRs. As the maximum financial contribution for Romania has been adjusted downwards, the 2022 and 2023 recommendations not related to energy challenges, are not considered in the overall assessment. 16 The REPowerEU chapter reinforces the ambition of the plan as regards most of the relevant CSRs in the field of energy (CSRs 2023.3 and 2022.3), notably to reduce reliance on fossil fuels and to accelerate the energy transition. Several measures included in the REPowerEU chapter aim at deploying renewable energy faster. This includes both reforms (C16.R1 on the creation of the legal framework for the use of state land as acceleration areas for RES investments, and C16.R2 establishing one-stop-shops (OSS) to provide energy advisory services for energy efficiency renovations and energy production from renewable sources for prosumers), and investments C16.I2 (New capacities for electricity generation from renewable sources), C16.I4 (Grant Voucher Scheme to accelerate the deployment of renewable energy by households) and C16.I6 (Pilot project for the installation of 20 MW of floating solar panels on irrigation channels). Moreover, investment C16.I5 (Digitalisation, efficiency and modernisation of the national electricity transmission network) aims at improving grid capacity to allow the new-built capacity to operate in the market. Reform C16.R2 (Setting up one-stop-shops (OSS) to provide energy advisory services for energy efficiency renovations and energy production from renewable sources for prosumers), and investments C16.I3 (Boosting energy efficiency of public buildings) and C16.I7 (Grant Voucher Scheme to make energy efficiency improvements to households) aim to increase the pace and ambition of renovations to advance the energy efficiency of the building stock. The introduction of renovation offices under C16.R2 specifically addresses the recommendation to provide better access to information and sustainable finance options. Finally, investment C16.I1 (Training for green energy skills) aims to increase the provision and acquisition of skills and competences needed for the green transition. *** Taking into consideration the reforms and investments envisaged by Romania, its modified recovery and resilience plan is expected to contribute to effectively addressing all or a significant subset of challenges identified in the country-specific recommendations, or challenges in other relevant documents officially adopted by the Commission under the European Semester, and the modified recovery and resilience plan represents an adequate response to the economic and social situation of Romania. This would warrant a rating of A under criterion 2.2 in Annex V to the RRF Regulation. 3.3. Growth potential, job creation, economic, institutional and social resilience, European Pillar of Social Rights, mitigating the impact of the crisis, and social territorial cohesion and convergence The modified RRP, including the REPowerEU chapter, continues to contribute to economic cohesion and to address vulnerabilities of the economy. The main contributions to growth and employment are expected to come from investments and reforms concerning education, including digital skills and vocational training, the decarbonisation of industry, the digitalisation of enterprises and the formalisation of domestic work. Measures in the REPowerEU chapter are also expected to contribute to sustainable growth. It is the case for instance for the support to green skills and to the development of renewable energy sources. 17 Th