Performance Regulation: Fixing the details

Today’s geopolitical realities bring renewed uncertainty, heighten security risks and further expose Europe’s vulnerabilities. These challenges make one conclusion clear: accelerating the clean transition and addressing the triple crisis of climate change, biodiversity loss, and pollution are essential to strengthening Europe’s long‑term resilience, autonomy, security, and competitiveness. The long‑term EU budget is pivotal in this effort, providing the stable investment framework needed to meet these challenges.

A joint assessment from Europe’s leading environmental organisations of the Annex I of the Budget expenditure tracking and performance framework ‘performance regulation’ (COM 2025/454)

In that spirit, the proposed next EU long-term budget (MFF 2028-2034) contains a horizontally applicable Budget expenditure tracking and performance framework (‘performance regulation’) (COM 2025/454) that, for the first time, introduces a set of rules to be applied across the entire MFF. This positive evolution of the MFF governance can ensure stronger and streamlined transparency and accountability on the performance of the EU budget, contributing to a more impactful budget. At the same time, the defi nition of some horizontally applicable rules has the potential to make the implementation of the MFF simpler thanks to a clearer, lighter and more accessible framework.

However, in its draft version, the regulation entails some grave shortcomings. If those shortcomings are not addressed during the negotiations, they could lead to a systemic and comprehensive undermining of the very principles that are meant to be elevated through the performance regulation. This joint briefi ng highlights the main concerns with the Commission proposal, particularly with respect to the tracking of climate and environmental spending in Annex I. It provides decision-makers with a clear, authoritative reference for Council and Parliament negotiations, backed by leading European environmental CSOs.

The analysis of Annex I considers more than 100 intervention fields and thereby provides the most complete review of the climate and environment tracking methodology available to-date.

However, the briefing does not fully cover the following elements, which should nevertheless be addressed in the negotiations ahead, notably:

• Do no significant harm principle (DNSH): The briefing highlights several intervention fields included in Annex I, which should not be eligible for EU funding given their non-compliance with the DNSH principle. However, the briefing does not provide a complete analysis of the DNSH principle, pending forthcoming Commission guidance.
• Indicators: The briefing does not provide comments on the proposed list of indicators. Our general view is that these indicators require further improvement (for example, CAP spending impact indicators should be included and biodiversity indicators reintroduced) to better reflect the anticipated effects of the policies and related spending.
• Social tracking: The briefing also excludes the social dimension; while further mainstreaming social priorities and setting a target for social spending is key, social rights organisations and social partners should be consulted on this issue.