Currently, Romania has a low circular economy rate of 1.3%, compared to the EU average of around 11.5%.
Despite the construction sector generating a large amount of hazardous waste with a significant environmental impact, disposal through landfilling remains the main form of waste management. There are no existing technological standards allowing for the use of recycled materials in new constructions.
As a result, the Competition Council recommends updating national standards and regulations, as well as establishing a certification procedure for construction and demolition waste (CDW) to enable their reuse in road construction activities.
Authorities are trying to encourage waste recycling, both construction and municipal, by requiring companies to pay a tax for non-recycled waste. In Romania, this tax is only 160 RON/ton (about 33 EUR/ton), while in other European countries it is much higher (for example, around 100 EUR/ton in Belgium).
In this context, most construction companies prefer to pay the tax and dispose of the waste because recycling costs can be up to double the tax amount, depending on the processes involved (collection, sorting, transportation, and treatment of recyclable materials). Moreover, the costs for landfilling and later treatment of CDW are not clearly defined in the technical infrastructure project designs. Thus, the Competition Council recommends clarifying these cost-related aspects and believes that, to increase the recycling rate, the tax level should be set higher than the cost of recycling.
Another barrier to the transition to circular economy is the lack of waste management infrastructure, as purchasing equipment and machinery involves high costs and represents a significant effort for companies. In this context, to facilitate the transition to circular economy, the Romanian government has initiated a series of support measures for businesses, totaling over EUR890 million.
These include the “Recycling Factories” program for building new facilities to recycle separately collected waste, a de minimis aid scheme for the transition to a circular economy, a regional state aid scheme for investments aimed at reducing the negative effects of waste on the environment and reducing the consumption of primary resources, and the “ConstructPLUS” program.
The Competition Council recommends better implementation of these measures to make them accessible to industry operators.
“Certainly, there is room for growth in this area. By accessing the funds provided by the state, some of the financing needs for developing waste management systems can be met, helping us transition to a modern, competitive, and resource-efficient economy,” said Bogdan Chirițoiu, president of the Competition Council.
The circular economy is a production and consumption model based on principles of reducing the use of natural resources, extending product lifecycles, and minimizing waste production by reusing, repairing, renovating, and recycling materials and products for as long as possible.