The European Commission’s initiative to develop unified methodology guidance for the ‘Do No Significant Harm’ (DNSH) principle across the 2028–2034 Multiannual Financial Framework (MFF) represents a critical and long-overdue step toward coherent environmental governance in EU public finance. This consultation input draws on the accumulated evidence from the 2021–2027 programming period to identify the structural deficiencies that any forthcoming guidance must overcome, and to propose a concrete architecture for a more robust framework. Indeed, along with other Civil Society Organisations, CAN Europe has been documenting the flaws of DNSH implementation in 2021-27 Recovery and Resilience Plans , the RepowerEU window of the RRF, as well as developing recommendations on DNSH implementation both in the Social Climate Fund and for the 2028-34 MFF.
The central argument of this submission is that the implementation failures observed across the 2021–2027 instruments are not isolated administrative shortcomings but are, in significant part, the product of a deliberate and progressive structural fragmentation – a ‘salami-slicing’ of the DNSH principle that has progressively diluted its ambition from its original formulation in the EU Taxonomy to its application in public funding. Nowhere is this more visible than in the treatment of fossil fuel investments: the EU is formally committed to phasing out fossil fuel subsidies, repeated energy crises have demonstrated that continued fossil fuel dependency is itself a threat to European security and sovereignty, and yet the 2021–2027 budget frameworks permitted EU public funds to flow to gas boilers, gas distribution infrastructure, LNG terminals, and other fossil fuel assets through a combination of explicit exemptions and ill-defined case-by-case assessments. This must not be repeated.
Correcting this trajectory requires not merely improved guidance, but a reconception of the DNSH principle as a binding, uniform, and operationally precise standard – supported by mandatory exclusion lists, sector-specific technical guidance, and a coherent approach to external action.
Methodology guidance for the Application of the ‘Do No Significant Harm’ Principle in the 2028–2034 EU Budget