Green budgeting

Green budgeting

The Commission uses green budgeting to enhance the transparency of the EU funding to support climate and environmental objectives, in line with the Paris Agreement and the European Green Deal. In March 2022, the Commission committed to further pursuing its work on green budgeting, together with the French Presidency of the Council and several Member States.  

To underscore its commitment to its climate and environmental goals, the EU has set quantitative spending targets for its 2021-2027 multiannual financial framework and NextGenerationEU funding. In particular, the EU has committed to dedicating at least 30% of its multiannual financial framework and NextGenerationEU budget to climate-relevant expenditure, and 7.5% of the 2024 annual budget and 10% of the 2026 and 2027 annual budgets, to protecting and enhancing biodiversity.  

Expected climate and biodiversity contribution (budgetary commitments) in the 2021-2027 period (million EUR) 

^{NB: As the same action can contribute to more than one objective, it is important to recall that horizontal priorities (e.g., climate and biodiversity figures) cannot be summed up to avoid double counting.} 

^{Source: European Commission.}

The data available for the 2021-2027 period show that the EU budget, including NextGenerationEU, is on track to reach its 30% target for climate mainstreaming, thanks to the strong performance of the Recovery and Resilience Facility and the REPowerEU plan. The figures presented in this report use past commitments for years 2021-2024 and expected commitment appropriations for 2025-2027. 

For biodiversity mainstreaming, while the 2024 ambition was achieved, the 2026 and 2027 targets are projected to fall below the initial ambitions. More details are available in the dedicated biodiversity section below. 

In line with their sectorial regulations, the Ukrainian Ukraine Facility and Western Balkans Facility contribute to climate and biodiversity mainstreaming. The contributions included in the programme performance statements are preliminary and will be further refined and updated in upcoming years.  

It is important to note that other funds managed by the Commission also contribute to the green budget priority, despite not being part of the multiannual financial framework, such as the Innovation Fund, the Modernisation Fund and the Social Climate Fund. The revenues from these funds come from the EU emissions trading system. 

The amounts above are calculated based on commitment appropriations, as shown below. 

• For direct management, estimates are prepared by each service based on the most updated data available. For future estimates, work programmes, sectoral targets and historical values are used.
• For shared management, past and future figures are presented on the basis of the programmes and common agricultural policy strategic plans agreed with the Member States and updated in accordance with the annual reports.
• For indirect management, the figures are based on the existing targets and agreements with implementing partners, along with their annual reports.
• Past expenditure is revised annually following a quality review conducted by Commission departments, incorporating additional information available on the selected project. 

A focus on results is fundamental for green budget action and the EU budget in general. The results stemming from available indicators can be used to achieve more targeted spending and to improve steering of the EU budget. It can also make the green transition more efficient by improving accountability. The latter is also important in view of the need to contribute to multiple international commitments.  

The focus on emission reductions through energy efficiency and renewable energy expansion is crucial for achieving the EU’s climate neutrality goals and achieving the 2030 targets. The above results show that the EU budget is helping Member States to diversify their energy mix and gradually reduce their reliance on fossil fuels. This results in lower energy costs and decreased emissions of greenhouse gases and air pollutants, helping combat climate change. 

^{(*)Aggregated data of core performance indicators reflecting estimated and expected impact from the EU budget project as from 2014.}