New report: the untapped climate action potential of EU regional development funds

A new report highlights how little EU countries are using existing EU regional development funds to transition to climate neutrality. Published by Climate Action Network (CAN) Europe, of which ECOLISE is a member, the report shows how Member States must make climate action a much bigger priority of future EU funds spending.

Funding climate and energy transition in the EU: the untapped potential of regional funds reveals how EU member states have been dragging their feet when it comes to backing their climate pledges with adequate investments stemming from EU Regional Development and Cohesion Funds.

Only 9.7% of current EU funds for the period 2014-2020 have been mobilised to finance clean energy infrastructure. EU Member States must urgently review the way they spend the future 2021-2027 EU budget if they are serious about achieving climate neutrality in practice while rolling-out long-term investments which can stimulate the sustainable economic recovery, the report argues[1].

The economic support measures currently being developed and discussed are much needed in the fight against the health and economic crisis provoked by the coronavirus. But once the basic functioning of our economies will be restored, EU countries will have to make long-term investment plans which should put the transition to climate neutrality at its heart. In particular, the EU funds spending plans – so-called Operational Programmes – that are currently being drafted are key to steering regional development investments towards the EU’s climate objectives.

Markus Trilling, Finance and Subsidies Policy Coordinator at Climate Action Network (CAN) Europe said: “Targeted investments in the fight against climate change would contribute to the European recovery. For this, future EU funds must prioritise infrastructure investments that catalyse the decarbonisation of all sectors of the economy, such as renewable energy from  wind and solar, energy efficiency and sustainable mobility and agriculture. This will bring the long-term sustainable economic stimulus making our societies resilient towards future shocks.”

“As EU leaders are deciding now how they will spend the next generation of EU funds, they must put the money where their mouth is. To reach the agreed climate neutrality goal, EU governments must urgently redirect EU funds to climate action, and away from fossil fuels. Doing so is the best way to boost the recovery of European economies.”

Some Central and Eastern European countries – who are among the main beneficiaries of EU funds – claim they need more financial help from the EU purse in return for committing to higher climate goals. The report finds that current spending does not match their words. Poland has spent only 7.7% of its EU regional funding (ERDF and CF)  on clean energy infrastructure, making the country the EU’s fourth-worst spender after Slovakia (6.6%), Bulgaria (6.7%) and Croatia (7%).

Contributing to the economic recovery, the next EU budget 2021-2027 must increase its focus on climate action far more than today, dedicating 40% to climate action, according to the report. It must ensure more support to energy efficiency and renewable energy projects, housing and mobility. This is needed to allow the EU, and particularly its lesser developed regions, to implement the climate neutrality objective that EU heads of state and government agreed last year, and for the bloc to achieve a new, substantially increased 2030 climate target.

[1] European Regional Development Fund (ERDF) and Cohesion Fund (CF) of the EU 27 in 2014 -2020, planned amounts for renewable energy, energy efficiency, electricity infrastructure  and research and innovation for climate action; data reported for 2019; source: own calculation based on ‘Categories of Intervention’, https://cohesiondata.ec.europa.eu; data retrieved 3 March 2020