Romania risks losing €2.13 billion in EU funds as Just Transition Plan stalls

Romania’s ambitious plan to secure €2.13 billion in non-reimbursable EU funding for its most carbon-intensive regions is on the verge of collapse, as administrative deadlocks and lack of transparency have left critical projects in limbo for over three years, EUalive’s partner PressOne reports.

Despite formal approval of the Just Transition Programme (JTP) in 2021, Romania has yet to effectively access the funds aimed at supporting the green transformation of six heavily industrialised counties: Gorj, Hunedoara, Dolj, Galați, Prahova, and Mureș.

Designed to facilitate an equitable transition towards climate neutrality, the JTP is supposed to finance job creation, professional reskilling, green investments, and social measures to soften the socio-economic impact of decarbonisation. However, as of mid-2025, only one out of the 16 planned calls for project proposals has been launched and finalised – a scheme for small and medium-sized enterprises (SMEs). The rest of the programme remains frozen, prompting warnings from civil society and the European Commission about the risk of fund decommitment.

Eliza Barnea, an expert with Bankwatch Romania and a member of the programme’s Monitoring Committee, highlighted the systemic lack of transparency surrounding project selection and fund allocation. “We don’t know what is actually being financed. The lists published by the Ministry of Investments and European Projects offer only generic descriptions like ‘production diversification’, which tell us nothing about the real environmental or economic impact,” Barnea told PressOne.

The programme’s sluggish pace has already attracted criticism from Brussels. A recent audit by the European Commission revealed that by June 2025, only 2.64% of Romania’s allocation had been disbursed, all of which stemmed from the programme’s initial pre-financing tranche. Actual absorption remains at 0%, as no certified expenditures have been submitted for reimbursement.

The administrative paralysis is compounded by a weak institutional framework at the local level, particularly in regions historically dependent on coal and heavy industry. According to Barnea, counties like Gorj and Hunedoara lack the technical capacity and strategic vision to design transformative projects that could replace their fossil-fuel-based economies.

“For over a century, these regions have been locked into a single economic model. Shifting towards a diversified, green economy in just a few years is an enormous challenge, especially without coherent leadership,” she noted.

While initiatives like the Integrated Territorial Investment (ITI) in the Jiu Valley showcase how targeted interventions can drive sustainable development, similar efforts are largely absent in other counties. Projects in the Jiu Valley include green mobility plans, a robotics hub, photovoltaic panel manufacturing, and industrial heritage restoration. However, replication of this model in regions like Prahova or Mureș has been minimal.

The delays have tangible consequences for local communities. “People have been hearing about the Just Transition Fund for six or seven years, but they have yet to see viable alternatives on the ground,” Barnea warned. Meanwhile, industrial layoffs are already occurring, as seen with the recent dismissal of over 400 workers at an automotive parts factory in Gorj.

The opacity of the selection process also raises concerns about the programme’s environmental credibility. Although regulations explicitly prohibit funding for polluting sectors such as fossil fuels, tobacco, and arms, civil society lacks access to detailed data to verify compliance.

Barnea identified multiple structural obstacles stalling the programme’s implementation: leadership changes at ministerial level, poor communication, low transparency, and a profound lack of understanding of green transition benefits at the local level. Furthermore, she criticised the top-down approach of national authorities, which has left regional actors waiting for directives instead of proactively engaging with the programme.

Another key issue is Romania’s marginal participation in European knowledge-sharing platforms, which limits its access to best practices and innovative project models developed elsewhere.

As the EU shifts its funding focus towards net-zero technologies in the next Multiannual Financial Framework (MFF), the current JTP may be Romania’s last significant opportunity to secure dedicated transition funds. Failure to capitalise on this window risks repeating the chaotic deindustrialisation patterns of the 1990s, with severe socio-economic fallout: rising extremism, demographic decline, and deepening inequalities.

A coherent transition strategy, rooted in transparency, cross-institutional coordination, and local empowerment, is essential if Romania is to avoid this scenario. “The transition is happening, whether we like it or not. The only question is whether we manage it proactively or let it spiral out of control,” Barnea concluded.

More Romania coverage here.

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Caption: A Romanian labor union representative blows a plastic trumpet while waving a placard reading `You closed coal energy facilities, and now energy is more expensive` during a trade union protest of miners, steelmakers, and energy sector workers held in front of the government headquarters in Bucharest, Romania, 17 October 2024.