Romania - Pollution Control

Romania has only a relatively recent history of environmental protection. This issue was generally neglected both before and after the 1989 revolution. Prior to 1989, Romania lacked any environmental policy and post 1989 the transition to a market economy took precedence over all other issues. Currently, as a future member of the European Union (EU), Romania is undertaking significant measures to comply with Western standards in regard to environmental issues, which has created a demand for environmental products and services.

Currently, Romania faces acute problems concerning air, water and soil pollution, which requires large investment in the short and the long term and the participation of both the public and the private sector. Essential measures are needed in the fields of waste management, the improvement of water quality, and the enforcement of integrated pollution prevention and control. The environmental compliance costs for the accession to the EU is estimated at €20 billion representing approximately 50% for the water sector, and 25% for each of the waste and air sectors. These budget estimates are predicted to be spent over the next cycle and are an indication of the seriousness of the environmental problems that Romania has to face.

The best prospect areas are:

Water supply, waste water treatment, solid waste minimization, recycling and disposal, district heating, mining waste, emissions and effluent reduction and treatment, pollution prevention measures, hazardous waste disposal, energy utilization.

MARKET HIGHLIGHTS

As stated above, Romania generally neglected the environment before and after the 1989 revolution.

The Romanian environmental legislation is relatively new (enacted after 1995).

The applicable legislation is: Law no. 137/1995 on environment protection; Law no. 107/1996 on water protection; Forestry Code approved by Law no. 26/1996; and Law no. 111/1996 on the regulation of nuclear activities. The most promising sectors are related to traditional infrastructure technology (i.e. power plants, wastewater treatment facilities); end-of-pipe pollution control systems (bag houses, scrubbers, flue gas desulphurization units); environmental services (feasibility studies, EMS, ISO 14001) and software (database management systems, etc.)

There are a number of private consultants in Romania who now provide environmental services to business enterprises, but these firms tend to specialize in environmental audits. Given the growing interest in industry to implement EMS according to international standards (ISO 14001), there is a significant demand for consulting companies.

Romanian demand for environmental protection equipment and services is expected to witness a significant increase over the next years. Some of these increases will be linked to major programs for petroleum sub-sector rehabilitation projects for the National Oil Company PETROM; for the national gas company ROMGAZ; for power sector rehabilitation and modernization projects for the National Power Company CONEL, and for mine closing projects and the respective environment rehabilitation that will be required.

COMPETITIVE ANALYSIS

U.S. and Japanese companies are strong competitors of EU companies in Romania. In principle, competition should come first from local producers. However, Romanian industry does not manufacture sophisticated equipment, and much of the Romanian equipment manufactured is outdated. Therefore, generally the only competition coming from within Romania is for laboratory equipment such as: glassware weighing equipment, microscopes, ovens, etc. The needs for environmental equipment and services are immense.EU companies and their equipment and services are eagerly sought after by Romanian specialists.

END-USER ANALYSIS

Water / Wastewater Treatment

In the field of water quality protection, one of the main objectives of the government is to improve water quality and increase the supply of water resources, as well as the treatment of wastewater.

Water supply: Romania's water resources are relatively poor and unequally distributed in time and space, being formed of surface waters - inland rivers, lakes and reservoirs, the Danube River and ground waters. The water resources, though technically utilizable, cannot be used without the achievement of certain significant investments in complex development works of the hydro graphic basins and in treatment installations because:

- The major water resource, the Danube river, can only be used to a small extent, owing to its position, at the south-eastern edge of the country.
- The inland rivers are unequally distributed all over the territory, significant areas remaining with insufficient resources, presenting at the same time important flow variations.
- The pollution of certain inland rivers exceeds the legal limits, which makes their use difficult and sometimes even prohibitive.

Romania's water collection and distribution systems, and urban wastewater sewage and purification systems, is inadequate, because of their old equipment, fragmentation and low revenue base. The population's drinking water supply is in a particularly dangerous situation due to the lack of investments in water delivery, water treatment stations and distribution pipelines. There are no water treatment plants having a tertiary treatment step (for nitrogen and phosphorous elimination) and for this reason eutrophication is present in many lakes and reservoirs. Diffuse pollution due to fertilizer application as well as to that of pesticides and herbicides on the agricultural land is also a major concern. Most major cities in Romania still have no purification system for their urban wastewater, which flows directly into rivers and streams.

In conclusion, the major areas of concern are related to the improvement of the quality of supplied water and water resources and the development of new wastewater treatment plants and the modernization of the existing ones. There is also concern with the accumulations of heavy metals and organic compounds existing in sediments, and the reduction of the nitrogen, pesticides and other degradation product concentration in waters.

Air Pollution Control

There has been a drop in emissions of polluting substances since 1989, although this is largely due to the contraction of the economy during the period 1990-1994, serious problems still exist and the major sources of pollutants are: for SO2, thermal-power plants and power plants (70%); for NOx, thermal-power plants and road transport (60-65%); for CO, industry and combustion (75-80%); for CO2, thermal-power and industrial combustion (75-80%).

There are nine major cities with more than 250,000 inhabitants and they are the Romanian government priorities in the field of building-up belt roads in order to protect the population from traffic pollution. Other major areas of concern are related to production of electricity and thermal power, chemical and petrochemical industry, ferrous and non-ferrous metallurgy, urban air degradation by traffic, elimination of ozone depleting substances.

Waste Management - Contaminated Soil Remediation

At present, waste materials represent a major problem for environmental protection, due to their accumulation in large quantities and their inappropriate disposal over a long period of time. The deposits of industrial or domestic wastes that cover large areas are a permanent pollution threat to the environment (especially for underground waters) and for human health.

industrial and agricultural wastes - 95%, urban
wastes - 3%, agricultural waste - 2%. The main types of industrial and agricultural waste are: sterile from mining and quarrying, ashes from steam-generating stations, metallurgy wastes, industrial sludge, chemical
waste, metal waste. Although mining activities have been reduced in recent years, sterile wastes continue to be the most important category.

Other waste materials produced in huge quantities are the ashes from thermal processes. Ash and slag from steam-generating stations represent 80% of this quantity. Another important category of wastes is the one from the ferrous and non-ferrous metallurgy; metallurgical slug, metal dust and ashes, refractory materials, as well as mould crust, core and forms. Chemical wastes (organic and inorganic), include: residual acids, residues bases, salt waste, waste with metal content, with halogen content, waste with phosphorous, with nitrogen content, etc.

The total quantity of urban waste collected was 6 million tons, including: 75% proper domestic waste, 12% street waste, 9% sludge from residual urban water cleaning, 4% other, including hospital and construction waste.

Disposal of waste in Romania is an activity that does not presently meet EU standards. Municipal, bulk and many other type of waste are disposed of in landfills, none of which meets the EU engineering or operational standards. In addition, fly tipping is very common. There is no system for the safe handling or disposal of hazardous waste; generally, it is the producer who is required to store them. Clinical waste is either dumped in the landfill or burned in inadequate incinerators.

Waste treatment therefore represents a major weakness in the Romanian environmental infrastructure that exposes the population to serious problems of health and general quality of life. It is also a major opportunity for EU environmental firms.

A major area of opportunity is related to the construction, modernization or extension of domestic landfill sites, for large towns, or villages. Opportunities also exist for the construction of deposits for industrial wastes, the development of opportunities for their profitable re-use, the creation of secure centralized deposits for dangerous waste, and the establishment of incinerators for dangerous and clinical waste.

In conclusion, there is great potential for EU companies on the Romanian market taking into account that the demand for environmental equipment in Romania is potentially very large and EU companies are very well known and respected for their know-how and technology.

MARKET ANALYSIS

A long-term strategy with a qualified Romanian partner is recommended, as are experienced country managers with Central European or other developing country experience. Also recommended is that contacts be made with industry and Government. EU participation in Romanian trade shows, presence in demonstration projects is highly recommended. Other important strategies could be buying a local firm and using its projects as a base, committing to after-sales service.

Agents and distributors can contribute importantly to an EU company’s success on the Romanian market. Well qualified candidates exist in Romania.

Romanian specialists are educated, have a good understanding of technical matters, and, with a minimal training, can rapidly master new marketing techniques. Special note should be made of the fact that EU companies face competition from the U.S. on the Romanian market. Goods from the United States have an average of 15 percent duty rate disadvantage over similar goods from the European Union.

The Environmental Fund significantly assists and becomes an important vehicle to develop environmental projects. Such activities include small infrastructure projects, Danube hotspot projects, climate change projects, and natural resource projects including sustainable forestry.

The following large financial institutions, granted their support to the Romanian Government: IMF, World Bank, International Bank for Reconstruction and Development (IBRD), European Bank for Reconstruction and Development (EBRD), etc.

Since 1990, the World Bank loan commitments to Romania totalled approximately €3.5 billion. Over the medium-term, the Bank will give a priority to supporting sector programs related to European Union (EU) - accession, including environmental issues. Since 1991, the European Bank for Reconstruction and Development (EBRD) has invested in Romania over € 2.4 billion in 58 projects, making it the country’s single largest investor. The bank is concentrating among others, on more activity in the area of municipal and environmental infrastructure and is expected to invest in Romania in the forthcoming three years, development programs amounting to €2 billion.

Money is flowing in from the European Union to help Romania prepare for EU entry. The EU has announced its plans to provide EU accession candidate countries with 1 billion EUR in 2005 and 2006 to assist with environmental and transportation investments, the ISPA program (Instrument for Structural Policies for Pre-acquisition). Romania is expected to receive 700 million to 900 million EUR for environmental projects.