Powering Europe’s Clean Future: Romania’s Role in Hydrogen and Carbon Capture and Storage Infrastructure

Romania’s hydrogen and CCS leadership will be critical for Europe’s energy independence, ensuring a cleaner, more resilient, and affordable future beyond fossil fuels.

Europe's commitment to achieve net-zero emissions by 2050 necessitates robust infrastructure to support a hydrogen economy and carbon capture and storage (CCS) technologies. While all Member States have significant roles to play in broader decarbonisation, Romania in particular can play a transformative role in Europe's clean energy future. With its unique geological features and strategic geographic location, the country has the potential to become a pivotal player in both hydrogen production and CCS. Studies conducted by PWC in 2022 and Bellona Foundation in 2012 underscored the country’s geographical ability for CO2 storage, highlighting pathways to leverage CCS for industrial decarbonisation and energy security. However, realising this potential will require a coordinated effort and substantial investment from the European Union (EU), Romania, and carbon-producing countries that would export CO2 to Romania.

Romania’s Hydrogen Infrastructure

The European Commission has set ambitious targets for hydrogen, aiming to produce 10 million tonnes of renewable hydrogen and import an additional 10 million tonnes by 2030, with projections rising to 20-35 million tonnes by 2040 to cover up to 10% of Europe’s energy demand. The North Sea currently serves as the primary storage region; however, capacity constraints in areas like the northern Adriatic and Greece necessitate alternative solutions.  Romania's abundant renewable resources and strategic location make it an ideal candidate for hydrogen production and export, particularly to high-demand markets like Germany. By investing in renewable hydrogen infrastructure, Romania not only strengthens its own energy resilience but also contributes to Europe's broader goal of reducing dependence on fossil fuels, enhancing energy security, and building a stable, reliable energy system for the future. 

Romania, for instance, aims to produce 153,000 tonnes of renewable hydrogen per year by 2030 using 2.1 GW of electrolyser capacity. Romania’s proximity to major European markets, coupled with increased accessibility via the Danube river, enhances its potential as a key supplier in the region. Currently, Romania’s existing gas network is more likely to be adaptable for hydrogen with the help of some judicious investments. Transgaz, Romania’s national gas transmission operator, has joined the European Hydrogen Backbone initiative and plans to develop hydrogen-ready pipelines for natural gas-hydrogen blends. Its Ten-Year Network Development Plan includes a €2.3 billion hydrogen pipeline corridor alongside the BRUA pipeline by 2030 and a €1 billion connection to the Black Sea. These projects highlight Romania's commitment to a hydrogen economy, alongside its goal to generate 70% of power from renewables by 2030.

Romania’s CCS infrastructure 

Romania's extensive geological sequestration capacity, estimated conceptually at 4 gigatonnes in depleted hydrocarbon deposits and an additional 18.6 gigatonnes in deep saline aquifers, positions it as a leading regional hub for CO2 storage. Romania's advantageous position is further underscored by its mature hydrocarbon basin, with over 23,300 wells drilled and significant reserves discovered, offering unique advantages for CCS development. These depleted or declining hydrocarbon fields present well-characterised CO2 storage sites, a critical component in achieving the EU’s decarbonisation goals. By developing this infrastructure, Romania not only supports Europe’s climate objectives but also boosts its industrial competitiveness, fostering innovation and creating high-quality jobs in emerging sectors such as clean energy technologies and carbon management.

To fully leverage its CCS potential, Romania must address challenges posed by aging infrastructure. Many hydrocarbon wells, while abundant, require reconditioning to prevent leakage risks associated with CO2 injection, and existing gas or oil pipelines need modifications to handle dense-phase CO2 safely. Most industrial facilities, key emitters of CO2, also demand retrofitting to integrate capture technologies efficiently. Recommendations from the CCS4CEE report highlight the need for modernising infrastructure, establishing standards for well reuse, and enhancing institutional capacity to manage these upgrades effectively.

Our ADP model results, which leverage energy models to examine net-zero scenarios and provide insights into technology deployment, investment needs, and policy alignment at both EU-wide and Member State levels, show that Romania’s obligations mandated under the EU’s Net-Zero Industry Act (NZIA) could make it an important geological CO2 storage hub. To meet these national and EU climate targets, Romania’s needs to develop the capacity to store 10 million tonnes of CO2 annually by 2035 and 15 million tonnes by 2050, half of which is imported according to our model (see Figure 1). Key players like OMV Petrom and Romgaz will be tasked, as per NZIA obligations, with achieving 9 million tonnes of storage per year by 2030, nearly 20% of the EU's 50-million-tonne annual CCS target. With a mature hydrocarbon basin, Romania offers well-characterised CO2 storage sites, supporting its role as a leader in regional decarbonisation while providing critical CCS services to carbon-intensive industries across Europe.

FIGURE 1. CO2 capture and use per year over time.

Funding Challenges 

Despite its strategic advantages, Romania faces significant funding challenges in developing hydrogen and CCS infrastructure. Globally, renewable and low-carbon hydrogen production struggles to compete with grey hydrogen due to high costs, a challenge Romania shares with other nations striving to transition to cleaner energy alternatives. On the CCS front, although Romania has significant storage capacity, national funding is insufficient to develop the necessary pipeline and storage infrastructure (Figure 2). Emergency Government Ordinance 64/2011, which transposes the EU CCS Directive (Directive 2009/31/EC) into national law was recently updated in 2024 to allow for issuance of storage permits directly to oil and gas concession holders, facilitating the integration of  CCS activities within existing hydrocarbon exploration and production frameworks.

FIGURE 2. Romania’s cross-country CO2 pipeline needs over time.

However, significant obstacles persist. Romanian Petroleum Law (Law No. 238/2004) still requires modernisation to fully accommodate CCS operations. There are several other gaps in the regulatory framework, particularly regarding the development and regulation of CO2 transport infrastructure. The process of issuing authorisations has historically been time consuming, although there are hopes that the NZIA may address this issue. Another challenge is the lack of proactive planning for a comprehensive CO2 transport network. This absence of strategic foresight could hinder the efficient development of CCS projects and their integration with existing industrial infrastructure.

Difficulties Accessing EU Funding

While Romania is eligible for EU innovation programs such as Horizon Europe and the Innovation Fund, it faces unique hurdles that limit its ability to secure funding effectively. These challenges include a less developed innovation ecosystem, administrative deficiencies, and limited research and development (R&D) capabilities compared to economically stronger EU Member States. According to the European Commission’s Policy Support Facility, fragmented public organisations and gaps in policy-relevant evidence have hindered Romania’s research and innovation efforts (Policy Support Facility: Romania).

Leveraging EU Support to Seize Opportunities in Romania

The EU has an obligation to ensure all Member States, including those with structural challenges like Romania, can contribute equitably to achieving net-zero. To uphold the principles of the just transition, the EU should actively address Romania’s capacity gaps by providing technical assistance to improve administrative capabilities, allocating targeted R&D funding to strengthen innovation ecosystems, and tailoring funding mechanisms like the Recovery and Resilience Facility, as well as the upcoming new Multiannual Financial Framework (MFF) to better support countries with low absorption rates. To fully unlock the onshore CO2 storage potential, Romania must modernise its aging infrastructure and the EU needs to support infrastructure upgrades, coupled with funding mechanisms, which will be essential in facilitating Romania’s role as a regional hub for CCS. By enabling Romania to fully participate, the EU not only supports its own principles of equity but also ensures that Romania can play its vital role as a hydrogen exporter and CCS hub, contributing to the success of Europe’s clean energy transition as a whole.

Financing at EU level: 

Existing EU funding mechanisms, but in particular the new 2028-2034 EU budget (MFF) should prioritise continued funding for the deployment of innovative clean technologies, including hydrogen and CCS, ensuring that these funds are accessible and implementable across all Member States. Notably, the new MFF should prioritise ensuring adequate funding through the Connecting Europe Facility to support cross-border hydrogen and CO2 transport infrastructure,  essential for connecting Romania with key neighboring markets effectively. MFF should also focus on tightening climate conditionalities in Cohesion Policy funding, whereby clean industrial materials bought with these funds for infrastructure development could launch CCS in cement production for example. 

These funds should be designed without specific barriers for Central and Eastern European (CEE) countries, like Romania, and should avoid reallocating funds from other vital areas. The funding mechanisms must also comply with EU state aid and competition policies, facilitating a balanced approach to innovation and decarbonisation across the EU. In addition to better tailoring EU funding mechanisms, a strong emphasis should also be placed on the key role that private financing must play in fostering the development of CCS and hydrogen infrastructure in Romania (and the whole of the EU), as public funding alone will not suffice. To this end, the EU should explore the use of public guarantees and other investment de-risking mechanisms via the European Investment Bank (EIB) to crowd in private investments.

Shared Pipelines Costs:

Romania should adopt a Storage-as-a-Service Model, offering long-term contracts tailored to infrastructure costs with tiered pricing based on distance and volume. A critical first step would be to conduct comprehensive transport master planning to define whether Romania opts for a national CO2 transport network or dedicated transport facilities for standalone projects. Integrating a carbon credit mechanism, aligned with the newly finalised Article 6.4 of the Paris Agreement at COP29, could incentivise broader participation by offering high-integrity credits to investing countries, ensuring alignment with global emissions reduction goals.

Legislative Reforms: 

EU Member States, including Romania, should modernise their regulatory framework to streamline permitting, incentivise private-sector investment, and enable large-scale CCS deployment, in line with the overarching EU legal framework. While Member States can make adjustments within their national legislation, collaboration with EU policymakers is essential to tackle remaining regulatory barriers. For example, Romania could update its CO2 transportation regulations and modernise certain provisions. Similarly, other Member States need to ensure their legal frameworks facilitate the scalability and competitiveness of CCS projects, aligning with EU directives to accelerate the clean energy transition. Legislative efforts to enhance the utilisation of Romania's offshore storage capabilities in the Black Sea region would also be beneficial.

However, the EU CCS Directive (Directive 2009/31/EC) heavily emphasises offshore CO2 storage, which is more applicable to countries like Norway and the UK, while Romania’s nationally secure CCS potential is predominantly onshore. To support onshore CCS development effectively, Romania requires tailored legislative provisions. Poland’s leadership in onshore CCS regulation, which integrates tailored permitting processes and stakeholder engagement, provides a useful model for Romania. This approach includes refining permitting processes, establishing robust monitoring and safety protocols on a national level for onshore storage sites, and incentivising the repurposing of existing oil and gas wells for CO2 injection. Additionally, while funding mechanisms such as the Innovation Fund and Connecting Europe Facility have supported CCS initiatives—particularly large-scale, cross-border, or offshore projects—the EU should ensure these programs explicitly address the needs of onshore-focused projects. Challenges such as tailored application requirements and regional disparities in storage approaches must be addressed to enable equitable access and ensure broad participation in advancing CCS technologies across Member States.

Romania and other Member States should balance public investments in CCS, hydrogen, and clean technologies like nuclear with efforts to facilitate private financing. Investment strategies should be tailored based on each country’s stage in the emissions reduction journey, its specific legislative targets, and the economic and competitive advantages of particular technologies. This approach recognises that not every Member State will lead in all clean technologies but instead should focus on areas where they can maximise impact and align with EU-wide net-zero goals. Expanded EU-backed public funding mechanisms and policies that attract private capital are critical to building a diverse and regionally balanced cleantech portfolio.

Public-Private Partnerships (PPPs): 

Romania, other Member States, and the EU should adopt a more nuanced approach to PPPs by incentivising cross-border partnerships with the private sector to create an integrated CCS and hydrogen network. This collaborative multi-level effort should leverage private funds for public good, ensuring alignment with national and pan-European decarbonisation goals while maximising the potential of shared infrastructure and expertise.

Technical Assistance: 

The EU should expand existing technical assistance programs, such as the Technical Support Instrument (TSI), to help Member States address the challenges in developing hydrogen and CCS infrastructure. These programs could be tailored to enhance administrative capabilities, streamline regulatory processes, and build institutional knowledge. By offering targeted support, such as project feasibility studies, best practice guidance, and expertise on legal frameworks, the EU can help Member States effectively use available funding and accelerate its clean energy transition.

Conclusion

Romania’s strategic location, abundant renewable resources, and geological capacity uniquely position it to support Europe’s hydrogen and CCS ambitions. By scaling hydrogen and CCS, Romania reduces Europe’s reliance on volatile fossil fuel markets, enhancing energy security while fostering regional resilience. Addressing structural and funding challenges through EU-wide coordination, equitable resource allocation, and robust capacity-building efforts will enable Romania and other Member States to overcome barriers to decarbonisation. Romania’s success in deploying hydrogen and CCS technologies will not only advance its own climate objectives but also bolster Europe’s collective energy transition, ensuring a competitive, resilient, and inclusive path to net-zero by 2050.

 

¹ Miu, L., Nazare, D., Cătuți, M., Dudău, R., Postoiu, C., & Bălan, M. (2021). Assessment of current state, past experiences and potential for CCS deployment in the CEE region. CCS4CEE (Nov 2021).