Last fall, Moldova, under the leadership of President Maia Sandu, broke its full-scale dependence on Russian gas. This was possible via Moldova''s connection to the Iasi-Ungheni pipeline, which runs through Romania and is a reverse flow of the Trans-Balkan pipeline. This winter, none of Moldova''s gas will be imported from Russia.
For the last two years the European Union has provided funding to support subsidization for vulnerable households'' fuel costs. While this much needed relief helps Moldovans survive another winter—it is not a long-term solution. The World Bank has supported projects to increase the efficiency of the heating systems and to build pathways for Moldova to connect to Romania''s electrical grid. The solutions for partners seeking to help Moldova develop long-term energy independence is going to take time.
Now is the time—before Russian gas ceases to flow to Transnistria and while Moldova has the most pro-reform government in its history—to help Moldova move toward a future where Russia''s malign hand can no longer reach into Moldovan homes and control the thermostat. To support this, the international community needs to work with the current Moldovan government to ensure the following occurs before the winter of 2024:
While these are important short-term measures to remove Moldova''s dependence on Russia, there should also be integrated efforts toward energy independence. This should include a focus on renewable energy. Further developing wind energy is something the United States should consider increasing support for in the longer term. Through a thoughtful integration of these measures, Moldova will be ready for when Ukraine turns off Russia''s tap in December 2024.
Daniel F. Rundeis a senior vice president, William A. Schreyer Chair, and director of the Project on Prosperity and Development at the Center for Strategic and International Studies (CSIS) in Washington, D.C. He is also the author of the The American Imperative: Reclaiming Global Leadership Through Soft Power (Bombardier Books, 2023). Leah Kieff is a senior associate (non-resident) with the Project on Prosperity and Development at CSIS.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
Moldova wants to introduce its own carbon tax to keep pace with the European Union''s climate legislation — but the effort is creating tensions with its Russian-backed breakaway region of Transnistria, home to most of the country''s heavy industry.
The EU''s Carbon Border Adjustment Measure (CBAM) is a border tax aimed at keeping bloc''s companies competitive by ensuring that rivals also pay a carbon price. It targets six carbon-intensive sectors highly exposed to international trade:aluminum,cement,ironandsteel,electricity,hydrogenandfertilizers. Its transitional phase launches on October and goes fully into effect in 2026.
That''s a big potential problem for Moldova, and especially Transnistria, which is a large exporter of iron and steel to the EU. A study by Carnegie Europe found the CBAM would "most likely lead to unemployment and reduced wages" and could put up to 2 percent of Moldova''s employment at risk.
The problem is that Moldova has no clue how to ensure that Transnistria, a region plagued by corruption and which does not recognize the government''s authority, would implement complex policies such as carbon measurement, reporting and verification.
"First, how can we monitor such a market? How do you then check it and get the reporting on these emissions?" Carolina Novac, Moldova''s state secretary for energy, told POLITICO. "How do we enforce such a mechanism both internally but also in Transnistria?"
Around 1,500 Russian troops arestationedin Transnistria — part of a frozen conflict dating back to the fall of the USSR. The region is also home to several Soviet-era industrial plants, which generate over half of its GDP through exports.
Policymakers in Chişinău can estimate and monitor emissions from the region "to a certain extent," said Péter Pozgai, a governance expert at the Energy Community, an organization that aims to better integrate the EU''s neighbors into the bloc''s energy policy.
But Moldova will have difficulty forcing the enclave to implement a CO2 pricing scheme, according to Igor Munteanu,a former Moldovan diplomat who served as the country''s ambassador to the U.S. and now heads the Institute for Development and Social Initiatives in Chișinău.
If Moldova wants to set up a carbon pricing scheme in time to comply with the CBAM, the only option is to leave Transnistria behind — at least for the time being, according to Novac.
That would lead to the awkward situation of having the country''s highest carbon-emitting region remaining outside the scheme — which would undermine any effort to spur its decarbonization.
In the longer term, Transnistria will have to agree to be part of the carbon pricing scheme to keep selling to the EU, said Novac. If "they want to export their goods to the EU, they''ll need to have their carbon reflected in their products," she said.
"Companies that would seek to maintain this trade relationship would clearly have to comply with the EU existent and future climate legislation and policies," he said.
Last year, over 60 percent of Transnistria''s exports — mainly iron and steel — went to the EU, particularly to Romania, Poland, Germany, Slovenia and Italy.
Transnistrian businesses exporting to the EU — including the Moldova Steel Works (MMZ), the enclave''s third-largest taxpayer — are dependent on the Moldovan government issuing environmental permits, meaning "Chişinău can and does influence the work dynamics of companies from Transnistria," said Anatolii Dirun, an assistant professor at the Tiraspol School of Political Science..
"The MMZ agreement is part of a package deal between Tiraspol and Chișinău, in which Moldova issues the environmental permit and Tiraspol supplies electricity to [the rest of the country]," Dirun said.
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