Selected Issues Papers

Romania is on track to become ‘fit for 55’—reducing its absolute emissions by 55 percent (relative to 1990) by 2030, consistent with the European Green Deal. However, becoming carbon-neutral by 2050 in an economically resilient and competitive manner would require an accelerated decarbonization path, especially in the transport and building sectors—two emission-intensive sectors that are projected to raise Romania’s carbon footprint over time. The analysis presented in this paper shows that complementing the existing decarbonization measures with further national carbon pricing instruments in these sectors could put Romania on track to carbon neutrality. Crucially, these complementary measures would incentivize green private investment and boost energy security, while enhancing Romania’s resilience and unlocking its potential in the global green value chains.