Member States are currently developing their EU funds spending plans to demonstrate to the European Commission how they are going to use the unprecedented amounts of EU budget and recovery funds. A campaign by Climate Action Network (CAN) Europe, identifies climate and environmental friendly and harmful practices that 13 Member States and regions plan to finance from the EU’s purse.

The EU’s recovery package, combined with its 2021-2027 EU budget totals € 1.8 trillions and is the largest financial package ever (in the EU) and aims to stimulate the economy during the ongoing pandemic. At the same time EU’s financial support should go for implementing the objectives of the EU Green Deal in tackling the climate crisis and building more sustainable, resilient societies and economies.

The EU Cash Awards campaign, launched today, looks at how Member States and regions are planning to use the available funding through a whole range of plans they have to develop to get access to EU funding, namely the Structural Funds, the Just Transition Fund, and the Recovery funding. Based on draft plans published by governments, or leaked documents, the EU Cash Awards Campaign highlights good, bad and ugly measures in these spending plans. The campaign aims to encourage Member States, regions, and the European Commission to take decisive steps in the finalisation of these spending plans by excluding all climate and environmental harmful measures and promoting solutions to tackle the climate and environmental crises.

Amongst the good examples which clearly contribute to the necessary transition, the ambitious Territorial Just Transition Plan of the Polish Eastern Wielkopolska region and the Estonian Ida-Virumaa region’s oil shale phase out from the heating sector are among the highlights. In addition, Polish government’s recovery measures that promote energy communities and energy efficiency in buildings, Spanish government’s plans to mobilise more than 10% of its Recovery Plan to create opportunities and public services in rural areas or the Belgian Walloon region’s planned investments for energy efficiency in buildings are EU investments which serve the people and the climate.

Unfortunately, the EU Cash Awards discovers more “bad” and “ugly” practices than good ones. The “bad examples” category brings together elements of greenwashing or partially good measures that are missing the opportunity for a real change. These include: missed opportunities for low carbon transport investments in Czechia, France, Germany, Poland, Portugal, Slovenia and Belgium’s Flemish region, and lack of investments in renewables and energy efficiency – despite the huge potential – in Germany, France, Bulgaria, Czechia and Latvia. French and Spanish investment plans for financing “not so green hydrogen” also raise eyebrows. The fact that all these plans are overshadowed by lacking public consultation processes in almost all countries is a reason for concern for NGOs.

“Ugly practices” section covers spending measures that are aimed at propping fossil fuel use, be it oil, coal or gas. This section includes: France’s € 2.5 billion worth blank check to oil and gas companies as well as carbon-intensive industries, Polish and Bulgarian investments in polluting waste incinerations, Romania and Bulgaria’s investment plans for gas distribution and Slovenia’s bailout for aviation companies.

Markus Trilling, Finance and Subsidies Policy Coordinator at Climate Action Network (CAN) Europe said: “Member States have agreed to spend upcoming EU funding on Green Deal objectives, while applying the “do no harm” principle to all its investments. Now it is time for them to put our money where their mouth is and make EU funds spending plans truly transformational. We need public investment that will support the transition to a climate-safe society. That would benefit not only the climate but also the European economy in general. Spending EU cash on fossil gas in contrast will lock-in economies into increased emissions and fossil fuel dependency for decades.”

The next step of the EU cash awards campaign is to put all measures to a public vote to identify the top good, bad and ugly measures elected by Europeans that Member States try to finance through the EU purse. The results of the public voting will be announced in an Awards Ceremony on 29 April.

Arnaud Collignon, Climate energy policy officer, Inter Environnement Wallonie (IEW), Belgium, said : “ A couple of years ago, most of the public money would have been spent on road infrastructure and other climate killer public investments. In Belgium at least it is not the case anymore and it is certainly a remarkable evolution! But there is still a long way for our leaders to understand that climate and environment has to be integrated in any investment decision…”

Wojciech Szymalski, Institute for Sustainable Development, Poland, said: “As the pandemic continues to worsen, perspectives for a Polish green recovery is developing. In this sense, the Polish Recovery Plan shows some good and bad examples of how the EU cash can be spent. The good is that it underlines support for community energy solutions – because people are using more energy at their homes. The bad is that it lacks serious funding for local bicycle infrastructure which would seriously contribute to health of the citizens and the stimulus of the tourism sector. However, the plan includes many unknowns – and some might turn out to be very ugly at the end.”

Raphael Hanoteaux, EU Policy Officer for CEE Bankwatch Network, said : “It is telling that the ‘bad’ and ‘ugly’ nominations are found most often in central and eastern Europe. EU recovery funds should help build back better with investments that address climate breakdown and biodiversity loss. Instead governments in the region are poised to ‘win’ the EU cash awards, drafting plans behind closed doors that include fossil fuels projects and other dirty investments. Urgent action is needed to seal the European Green Deal and reach the EU’s 2030 targets.”

Sascha Müller-Kraenner, Executive Director of Environmental Action, Germany said: “As the EU’s largest Member State, Germany has a special responsibility to ensure that the unprecedented Next Generation EU fund realizes its full potential to stimulate a green transition in Europe. But rather than promoting transformational change, the draft German Recovery Plan aims to preserve business as usual. The draft is weak on climate monitoring, is missing any public consultation, and shows a striking lack of ambition overall. Far too few funds have been earmarked for energy efficiency and the heating transition while biodiversity protection is completely neglected despite EU requirements. In the transport sector, the government even wants to grant new fossil subsidies running into the billions. The government needs to urgently revise this draft before sending it to the Commission so that it can act as a positive example for the rest of Europe.”

Audrey Mathieu, Senior Advisor – EU Climate Policy at Germanwatch said: “Overall, the largest economy in the EU is unfortunately not leading by good example as the German draft plan is no role model for a successful sustainable recovery. It misses the EU climate spending target of minimum 37% of expenditure related to climate, does not refer to the current EU taxonomy draft as a test benchmark for investments, nor to the “Do No Significant Harm” principle, and the public participation has been lacking in the drafting phase. Some measures like the lacking fundings for building renovation or the absence of fundings for the preservation of biological diversity needs to be underlined. We clearly see space for improvements.”

Siim Kuresoo, from Estonian Fund for Nature said : “This planning period of EU Funds is exceptionally important, because additional funds open an opportunity to drive for more significant change. We see the dialogue about recovery and a greener future finally getting started in Estonia, and among others important investments are considered. But we need to make more efforts to ensure that we won’t miss the potential to use all the expertise to guarantee the funds will be used for carefully calculated and bold decisions needed for the ecological transition.”

Neil Makaroff, EU policy officer, Réseau Action Climat France said: “Recovery plans are a unique opportunity to align investments with greater climate ambition, putting Europe on the path to climate neutrality. Unfortunately France’s recovery plan does not show leadership on green recovery and does not map out a resilient, climate-friendly future: €20 billion euros of the recovery will be devoted to an unprecedented tax cut for France’s largest, and therefore most polluting, companies, while a limited amount will go directly to renovating the homes of the most vulnerable and poorest households. While the aviation sector has received €15 billion in bailout money from the French government, the railways will receive only €650 million of fresh money, despite the urgent need to reinvigorate the rail network. France, which claims to be the champion of green finance, needs to deeply revise its recovery plan in line with the proposals of the Citizen Assembly for Climate Change. France must play its role in the implementation of the much-needed European Green Deal.”

Ana Márquez, Climate and Energy Officer, SEO/BirdLife said: “Spain is the second largest recipient of grants from the Recovery and Resilience Fund and therefore is in a strong position to lead by example in the wise and efficient use of this money. Its outline plan shows a promising commitment to climate action and the protection of nature, but it is paramount that the draft in preparation is opened to wider participation before final approval of the full plan. It is vital that proposed reforms and funding focus on generating social benefit and are guaranteed to do no environmental harm. A truly bold and transformative recovery and resilience plan presents an unmissable opportunity for Spain to move rapidly towards a more sustainable, just and resilient society.”

ENDS
Contact: Goksen Sahin, Project Manager, goksen@caneurope.org, +32 468 45 39 20