Romanian renewable industry demands a revision of the agricultural land law

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The proposed amendments in the field of legislation with an impact on agricultural land sales do not take into account Romania’s interest in attracting investments in clean energy, and their adoption in its current form would prevent the development of renewable energy projects, endangering the attraction of European funds worth 10 billion euro, with an impact on energy security and economic competitiveness, say the most important associations in the renewables sector – the Romanian Wind Energy Association (RWEA) and the Employers’ Organization of Renewable Energy Producers in Romania – PATRES.

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RWEA and PATRES member companies request the re-examination of the Draft Law (PL-x 336/2018) in Parliament to amend and supplement Law no. 17/2014 on some measures to regulate the sale-purchase of agricultural land located outside the built-up area and to amend the Law no. 268/2001 regarding the privatization of the commercial companies that hold in administration lands of public and private property of the state with agricultural destination and the establishment of the State Domains Agency.

In the event of the enactment of the bill in its current form, adopted in Parliament, the activity of investors in the renewable industry will be severely disrupted, as they will be unable to acquire or otherwise legally secure unincorporated land for development of energy projects, say investors.

Moreover, Romania risks being unable to meet the targets assumed towards the European Institutions, as the application of the law will determine a reluctance from investors or even their impossibility to invest in new renewable energy production capacities in the investment period 2020-2030. The entry into force of this law will have as main negative consequence the loss (again) of the confidence of the investors from the renewable energy industry in the legislative framework and in the legislative power of the Romanian state.

“We hope that, following the steps of RWEA and PATRES, as well as other associations in the energy sector, this law will not be applicable in the form adopted in Parliament,” say the two associations.

History and some comments

The initial project dates back to May 2018 and it was initiated by 164 parliamentarians, almost exclusively members of PSD and ALDE. The arguments in the explanatory memorandum refer to the need to consolidate the Romanian land market, simultaneously with supporting young people to have access to the land market and “reducing the purchase of land for speculative purposes.” In April 2020, the project received the support of the Orban Government, subject to the adoption of amendments that were already in the position expressed by the Dăncilă Government, in the point of view issued in September 2018. Mainly, they refer to possible violations of the Constitution as a result unclear wording. As a general observation, “the restrictive acquisition of property rights, the imposition of conditions to the buyer […] beyond their uncertain and unpredictable nature, lead to a change in the legal regime of ownership of agricultural land and can be qualified as measures restricting the exercise of certain rights and freedoms”. Possible infringements of European law on the right of citizens of EU Member States to acquire ownership of agricultural land have also been noted.

Beyond the political option to support agriculture against other economic activity, the law explicitly favors the large owners of agricultural land already present in Romania, the only ones able, based on their financial, logistical and administrative force, to act in the sense of merging agricultural land, to the detriment of all economic agents in other sectors, including energy. What PSD failed to do when it controlled the Government, it can now achieve, ignoring the objections of the executive, but with the consent of the Constitutional Court.

Adopted in Parliament on June 3, the law was challenged in the Constitutional Court by a group of deputies belonging to the parliamentary group of the National Liberal Party and the Save Romania Union (USR). On July 14, the Plenum of the Constitutional Court ruled that the objection of unconstitutionality was unfounded. Now, the only way to stop the application of this law is the Presidency to send it back to Parliament.

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