Romania's coal powered utility receives bailout to buy carbon allowances: How many more distressed buyers are there?

As the end of April approaches, more signs are emerging of distressed buyers of carbon allowances.

Last week the Romanian government announced that it will provide state-owned utility Complexul Energetic Oltenia (OEC) with €2.66 billion to help fund the restructuring of the company and to purchase EU emission allowances (EUAs). Under the EU’s state aid laws this required approval (now provided) from the European Commission (EC).

OEC produces around 90% of the nation’s coal-fired electricity and is Romania’s second largest utility. Romania generates around one-quarter of its power from thermal coal. However, the increase in carbon allowance prices since 2017 has taken its toll on OEC, resulting in repeated injections of capital from the Romanian government.