Towards a climate-neutral EU: funding and incentives for a transformative European Green Deal and Recovery Plan

published 01.10.2020

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What is the Multiannual Financial Framework (MFF) and the Recovery and Resilience Facility (RRF)? - more about project here

The Multiannual Financial Framework is the EU’s long-term budget and forecasts how much can be invested in policies that strengthen Europe’s future. It’s one of the most important financial tools in the hands of national governments. The next MFF will extend from 2021 to 2027 and is currently under negotiation.

The Recovery and Resilience Facility has been proposed in May 2020 by the European Commission as an emergency temporary recovery instrument to help to eliminate the immediate damage brought by the coronavirus pandemic. This facility will take the form of a €672.5 billion of grants and loans addressed to the EU Member States. These grants and loans will be combined with the next MFF to tackle the effect of the crisis and to invest in a more green, digital, social and resilient European economy.

Why are the MFF and RRF important for the climate?

The EU’s transition to climate neutrality will require a major change in public funding and incentives. The next MFF alongside with the Recovery and Resilience Facility is the number one financial instrument at the disposal of EU institutions (it amounts to more than €1,000 billion) to boost climate action across the bloc. Moreover, the MFF 2021-2027 is the last investment cycle to help change the course of climate change, and a stronger climate performance is urgently needed to reach EU 2030 climate targets.

Therefore, these funds represent a formidable opportunity for the civil society to push towards a greener budget by changing the way the EU funds are used by the Member States. Indeed, during the former MFF, many countries used the EU money inefficiently, sometimes wastefully and, in many cases, even supported environmentally harmful investments. This is why it is important to take lessons from the past and make the spending of these funds more effective, increase transparency and support implementation, monitoring and assessment.

Previous work on the topic

This project works as a continuation of the former projects “A Multiannual Financial Framework (MFF) for the Climate” funded by the European Climate Initiative Program (EUKI) of BMU and the project "Climate Change and the EU’s Budget 2021-2027" from November 2018 that was supported by the Heinrich-Böll-Stiftung European Union.

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