Biofuels under the Modernisation Fund: €500 million for bioethanol, SAF and HVO

On 22 September 2026, the Ministry of Energy published the updated version of the state aid scheme for investments in new biofuel production capacity. The scheme is funded from the Modernisation Fund, under Key Programme 8, and was revised following the public consultation. The version put out for consultation in April provided for an estimated budget of 500 million euro: 100 million euro for bioethanol and 400 million euro for SAF+HVO. The aid can cover up to 70% of eligible costs. The call is not yet open. The scheme takes effect only after approval by the European Commission and after the funding decision, and the submission period has not been announced.

In brief

• Programme: Modernisation Fund, Key Programme 8 – Alternative fuels. The support is intended for the production of biofuels and bioliquids.
• Authority: Ministry of Energy.
• Beneficiaries: businesses of any size that build new bioethanol or SAF+HVO production capacity in Romania.
• Total budget: 500 million euro, estimated in the April 2026 version. Of this amount, 100 million euro is for bioethanol and 400 million euro for SAF+HVO.
• Value per project / intensity: up to 70% of eligible costs. The ceiling is 50 million euro for a bioethanol plant and 133.3 million euro for a SAF+HVO plant.
• Submission period: not yet announced. It will be published on energie.gov.ro, and applications will be submitted in MySMIS2021.
• Status: scheme updated after the consultation and pre-notified to the European Commission. The call has not been launched.

What changed after the public consultation?

Together with the scheme, the Ministry published a summary of the comments received. According to the responses in that document, the main changes are:

• the minimum capacity for bioethanol fell from 50,000 to 20,000 tonnes per year, while the ceiling of 50 million euro per plant remained unchanged;
• newly established companies, for example companies created specifically for the project, are no longer excluded;
• a disqualifying condition has been introduced: the technology must have a maturity level of at least TRL 8, proven by the feasibility study, technical data sheets and conformity documents;
• for SAF+HVO, the thresholds of 20,000 tonnes per year of SAF and 90,000 tonnes per year of HVO are now explicitly formulated as minimums and must be met simultaneously. The ceiling of 133.3 million euro remains the same;
• the scheme now states that beneficiaries could later also receive operating support, notified separately. However, the Ministry specifies that it is not currently considering such a mechanism.

The Ministry's announcement shows that the scheme has already been pre-notified to the European Commission. For this reason, new comments can only concern the consistency of the text and clarifications, not substantive changes. Comments should be sent to programcheie8fm@energie.gov.ro. The announcement does not specify a deadline for them.

Who can apply?

Commercial companies of any size can apply, from micro-enterprises to large enterprises. The company must be registered with the ONRC (Trade Register) by the time the funding contract is signed. The articles of association must include CAEN Rev.3 code 2051 – Manufacture of liquid biofuels. Credit institutions and other financial institutions are excluded.

The application is submitted by a single legal entity. Consortia are not recognised as such, so partners must organise themselves into a joint legal entity. Agricultural or energy cooperatives with legal personality can apply directly. Newly established companies can prove their financial capacity through a bank comfort letter.

Which projects and costs are eligible?

• Newly installed capacity only. Retrofitting and conversion of existing plants are excluded. So is co-processing of HVO in an existing refinery if production cannot be separated. In brownfield projects, only the new components are eligible.
• Feedstocks from Annex IX of Directive (EU) 2018/2001, part A and part B: waste, residues, algae, cellulosic biomass, used cooking oils, animal fats. Virgin vegetable oils (rapeseed, sunflower, soya) are not eligible.
• A greenhouse gas emission reduction of at least 65%, verified through ISCC, RSB or equivalent certification.
• Not eligible: operating costs, studies, FEED engineering, technology licences and certification costs. These are borne by the beneficiary.

At the time of submission, a real right over the land must be proven. Renting, leasing and loan for use are not accepted. A strategy for sourcing certified feedstocks is also mandatory.

How is the money allocated and what obligations follow?

The funds are awarded through a competitive auction, in separate procedures for bioethanol and for SAF+HVO. The main criterion is the aid requested per tonne of biofuel. The bid with the lowest value per tonne receives the maximum score. The Ministry estimates around 6 beneficiaries.

The investment must be completed and put into operation by 31 December 2030 at the latest. After the consultation, the 48-month deadline from the granting of the aid was removed from the scheme. After commissioning, production must reach 50% of the committed capacity in the first year, 75% in the second and 100% from the third year. Monitoring lasts 5 years. If the thresholds are not met, the beneficiary repays, with interest, between 25% and 100% of the aid.

What this means for your business

Our recommendation: the scheme suits industrial investors with large projects, technology already proven at commercial scale and secured co-financing. The own contribution is at least 30% of eligible costs, plus all ineligible costs. The feasibility study, the documentation submitted for the environmental permit and the land must be prepared from your own resources before submission. For an SME or a start-up, the realistic option is to join a project structure with an industrial partner.

Farmers and cooperatives can approach the scheme from two directions. They can become suppliers of residual biomass for the future plants. They can also take part as associates in a joint legal entity. The most common pitfalls are ineligible feedstock, lack of certification, land without a real right and technology still at pilot stage. If you want to see which programmes suit you now, try the eligibility check.

Frequently asked questions

Can applications for the biofuel scheme already be submitted?

No. The scheme was updated on 22 September 2026, but it takes effect only after approval by the European Commission and after the funding decision from the Modernisation Fund. The submission period has not yet been announced. It will be published on energie.gov.ro.

How much can a project receive?

Up to 70% of eligible costs. The ceiling is 50 million euro for a bioethanol plant and 133.3 million euro for a SAF+HVO plant. The exact amount results from the bid submitted in the auction.

Can I use rapeseed or sunflower oil as feedstock?

No. Only feedstocks from Annex IX of Directive (EU) 2018/2001 are eligible, such as waste, residues, used oils and animal fats. Virgin vegetable oils are excluded.

Can a recently established company apply?

Yes. After the consultation, newly established companies are no longer excluded. Financial capacity can be proven through a bank comfort letter.

Can upgrades to existing plants be funded?

No. The scheme funds only newly installed capacity. Retrofitting, conversion and co-processing without separate production are not eligible.

Official sources

• Ministry of Energy – Update of the state aid scheme for biofuels (22.09.2026)
• Announcement on the publication of the state aid scheme (PDF)
• Summary of comments from the public consultation – Key Programme 8 (PDF)
• State aid scheme – version put out for consultation in April 2026 (PDF)
• Ministry of Energy – Modernisation Fund, Key Programme 8

Information checked on 26 September 2026. Conditions may be amended by the managing authority — check the guide in force before submitting.