Starting November 1, electricity and heating prices in Romania will increase slightly following a 62 percent rise in the high-efficiency cogeneration tax, which has been raised to 0.0027 euros per kilowatt-hour. The adjustment was announced by the Smart Energy Association (AEI), which warned that despite years of contributions intended to fund efficiency improvements, consumers continue to face higher energy costs.
The cogeneration tax, introduced in 2011, requires both households and businesses to pay a surcharge on each kilowatt-hour of electricity consumed. The measure was initially designed to support investments in combined heat and power (CHP) plants capable of achieving efficiencies of 75 to 80 percent—significantly higher than the roughly 30 percent efficiency of older facilities. The goal was to reduce fuel consumption and ultimately lower energy prices.
However, AEI argues that much of the collected revenue has instead been used to subsidize district heating systems in several large cities, rather than to build new, efficient plants. The cogeneration support mechanism, originally set to expire in 2023, has been extended until 2033. Since its introduction, more than 2.6 billion euros have been collected under the scheme, with most funds directed toward maintaining existing heat supply infrastructure.
The new tax rate is expected to increase electricity prices by around 0.5 percent. Although the rise is relatively modest, AEI has questioned the fairness of the system, noting that consumers in poorer rural areas are effectively subsidizing heating for residents of wealthier urban centers.
Beginning November 1, a reduced 11 percent VAT rate will also apply to district heating for households, schools, hospitals, and public institutions throughout the heating season, valid until March 31, 2026.
Overall, AEI forecasts that household heating costs for the 2025–2026 winter season will rise by approximately 2 percent, continuing the upward trend in household energy expenses despite more than a decade of efficiency-related payments.
