Constitutional Court confirms: The contribution to the Energy Transition Fund is unconstitutional

The decision obtained by Adesman & Associates, reasoned today, completely eliminates a 100% tax burden and paves the way for the recovery of amounts illegally paid by energy producers.

Bucharest, 2 June 2025
Constitutional Court of Romania (CCR) has given the reasoning for Decision No 640 of 7 November 2024, by which it upheld the objection of unconstitutionality raised by major energy producers and private energy sector players, represented by the Adesman & Associates law firm, regarding the provisions of Article 15 and Annex No 6 of Government Emergency Ordinance No 27/2022, as amended by Government Emergency Ordinance No 119/2022 and Law No 357/2022. These provisions impose the obligation to contribute to the Energy Transition Fund for certain categories of energy market participants—a contribution also known as the „solar tax” or „wind tax”, which is considered by many industry players to be excessive and disproportionate.

An excessive fiscal measure, declared unconstitutional.

Contribution declared unconstitutional It imposed a 100% tax on electricity producers (including those from renewable sources) on additional revenues obtained above a certain threshold (initially 450 lei/MWh, later 400 lei/MWh). This measure generated fierce protests from the industry, being considered discriminatory and having a devastating impact on investments in the private energy sector, especially in the green energy area.
The arguments that convinced the Constitutional Court: Diana Adesman, Managing Partner, Adesman & Asociații, argued before the CCR that the criticized regulatory acts violate fundamental principles of the Romanian Constitution, including (i) the right to private property guaranteed by Article 44 of the Constitution (the 100% contribution was equivalent to a de facto expropriation, affecting the substance of the property right); (ii) economic freedom guaranteed by Article 45 of the Constitution (the measure hindered the normal conduct of economic activity and the making of profit, discouraging investment); (iii) the fair distribution of tax burdens guaranteed by Article 56(2) of the Constitution (the tax represented a double taxation, in addition to the profit tax, creating unfair competition and favouring certain producers); (iv) the principle of legal certainty and predictability regulated by Article 1(5) of the Constitution (the sudden and untimely amendment of the fiscal framework affected the economic plans of companies operating in the energy sector).
According to the CCR, imposing a contribution of up to 100% on the additional income obtained above a state-imposed ceiling represents a serious interference with the right to property, being disproportionate in nature and amounting to genuine confiscation. The Court stressed that, although the state has the right to impose fiscal burdens in the public interest, these must respect a fair balance and must not destroy the essence of the right to property and economic freedom. A rate of 100% exceeds any reasonable limit, turning the contribution into a de facto nationalisation of income. Furthermore, in the reasoning of its Decision, the Court criticised the lack of fairness and the competition distortions generated by the exemption of certain operators from the system

Next steps: The path to recovering funds and legislative adjustments

The decision of the Constitutional Court is final and generally binding from the date of its publication in the Official Gazette. This means that Parliament or the Government has 45 days at its disposal to amend the legislation in accordance with the CCR decision, setting a new contribution amount that is reasonable and proportionate, and which cannot reach values that would qualify the measure as one equivalent to confiscation.
Also, the CCR paved the way for the recovery of amounts illegally paid by operators in the sector private energy companies, directly affected by this excessive tax regulation. Companies that have raised the exception of unconstitutionality and those that have pending cases before the courts, having as their object the refund of amounts paid up to the date of publication of the decision in the Official Gazette of Romania, Part I, will be able to benefit from the refund or offsetting of the differences between the amounts paid and those calculated in accordance with the new regulation.
„We have argued, from the very beginning, that this contribution had the nature of a disguised double taxation and was profoundly unbalanced. The Court confirmed today what numerous market players felt: that the state cannot transfer the burden of its social policies exclusively onto the shoulders of one economic segment. We are honoured to have been able to represent the interests of our clients in a case with such a wide impact and to have contributed to the restoration of balance and predictability in the Romanian energy market.” stated Diana Adesman, Managing Partner at Adesman & Asociații. „Victoria Adesman & Asociații – a legal partner with vision and experience in public law and tax litigation – is not just a legal success, but a clear signal that the state must exercise its fiscal powers with responsibility and respect for the principles of a market economy and private property, and that strategic decisions taken in the tax sphere must also be analysed from the perspective of constitutionality, rather than mere formal compliance.”.