The objective of this assignment is to conduct rapid sector assessments on three specific sectors or value chains. The assessments will first identify and analyze market segments of interest for Romanian firms in the identified sectors, not only based on their current characteristics – which should be analyzed in detail - but also in the context of evolving global and regional consumer trends towards greener products, emerging regulatory changes aligned with climate mitigation and adaptation agendas, as well as other important challenges and opportunities linked to the green transition and nearshoring agendas. The final report will identify and prioritize public policy actions and reforms that could be instrumental in improving the business environment in the sector and accelerate the green transition of firms. The assessments are expected to make recommendations specific to the Romanian context and based on good international practices. Recommendations should be actionable and address the main policy constraints and market inefficiencies identified in the analysis.

Romania’s robust economic growth over the past two decades has led to substantial convergence with European Union (EU) average incomes, but to ensure continued rising of incomes and competitiveness in the future economy, growth needs to be sustainable both economically and environmentally. The green transition provides new opportunities to increase the competitiveness of the Romanian private sector while placing it on an environmentally sustainable growth path.

The contribution of Romania’s industry is critical in the mitigation of GHG emissions. The industrial sector accounts for 46 percent of Romania’s total electricity demand, and its share of final energy consumption is projected to rise, going from 28 percent in 2019 to 30 percent by 2030 and reaching 43 percent by 2050. The emissions intensity in Romanian manufacturers (measured in CO2 equivalent emissions per euro of value added) is three times greater than the EU27 average, and more than twice as high as the sectoral average of peer countries such as Poland and Hungary. Substantial efforts should and can be made to allow Romania firms to stay on par with their competitors in the EU and global markets.

Besides enhancing green competitiveness of firms in sectors and value chains where they are already active, Romania’s private sector can also seize opportunities in emerging green products and value chains. On the demand side, shifts in consumer demand and regulatory reforms in the EU market are changing market dynamics and making it advantageous for firms to shift to greener products, practices, and industries. On the supply side, Romania’s diversified export portfolio and increasingly green energy mix put the Romanian private sector in a strong position to capitalize on opportunities created by the green transition. Romania’s manufacturing capabilities are reflected in an improved ranking (15th out of 230 countries and territories) on the Green Complexity Index, which tracks the capacity of countries to competitively export products that are green (i.e., offer environmental benefits) and technologically complex. Recent analysis of five clean tech value chains found that Romania already produces unique value chain subcomponents, particularly in wind and solar, signaling an emerging degree of sophistication that is commensurate with mid-tier positioning in these value chains.

In this context, the World Bank is supporting the Romanian Government in the design of a Green Industrial Plan that could enhance the regional and global competitiveness of the industrial sector. The World Bank will be providing technical advisory and analytical inputs that improve the government’s understanding of obstacles to private sector decarbonization and design the policies that can support the competitiveness of Romanian firms in the evolving global market.

 The objective of this assignment is to conduct rapid sector assessments on three specific sectors or value chains[1]. The assessments will first identify and analyze market segments of interest for Romanian firms in the identified sectors, not only based on their current characteristics – which should be analyzed in detail - but also in the context of evolving global and regional consumer trends towards greener products, emerging regulatory changes aligned with climate mitigation and adaptation agendas, as well as other important challenges and opportunities linked to the green transition and nearshoring agendas. The final report will identify and prioritize public policy actions and reforms that could be instrumental in improving the business environment in the sector and accelerate the green transition of firms. The assessments are expected to make recommendations specific to the Romanian context and based on good international practices. Recommendations should be actionable and address the main policy constraints and market inefficiencies identified in the analysis.