EU invests an additional €2 billion of emissions trading revenues in clean energy infrastructure projects in Member States via the Modernisation Fund
Under the Modernisation Fund, €2.17 billion has been disbursed today to help modernise the energy systems in nine Member States through 19 selected projects. These investments will help lower-income EU countries to meet their 2030 climate and energy targets and will reduce greenhouse gas emissions in energy, industry and transport, and improve energy efficiency. They are funded by revenues from the EU Emissions Trading System (EU ETS). The Modernisation Fund has now disbursed a total of €9.68 billion of EU ETS revenues since its launch in 2021 to help Member States to accelerate the green transition.
Following investments announced in June of €2.49 billion for 31 projects, today's disbursement of a further €2.17 billion and 19 more projects brings the total Modernisation Fund investments for 2023 to €4.66 billion for 50 projects. Support from the Modernisation Fund was granted this year to Bulgaria (€197 million), Croatia (€88 million), Czechia (€1.848 billion), Estonia (€66 million), Latvia (€5 million), Lithuania (€11 million), Poland (€221 million), Romania (€2.169 billion), and Slovakia (€60 million).
The 50 projects focus on electricity generation from renewables, modernisation of energy networks, energy efficiency, and the replacement of coal generation with lower carbon intensity fuels. They include:
- the modernisation of the electricity distribution grid in Bulgaria to accelerate the electrification of transport, storage deployment, and the decarbonisation and decentralisation of energy consumption and production;
- the production of electricity from photovoltaics by municipal waste service providers in Croatia;
- the achievement of a higher energy standard for public buildings and conversion of coal to gas in district heating in Czechia;
- improved energy efficiency in public buildings in Estonia;
- the introduction of electric vehicles and corresponding charging infrastructure in Latvia
- the development of renewable energy capacities in the Lithuanian large and medium-sized industrial sector;
- power grids for future electric car charging stations and high efficiency co-generation in district heating and industry in Poland;
- renewable electricity production capacities, the modernisation of the electricity distribution network, rolling stock modernisation and gas infrastructure to facilitate replacing coal-powered generation in Romania;
- the modernisation of energy networks, including energy storage, and energy efficiency improvements in Slovakia.
Funded by revenues from the auction of emission allowances under the EU Emissions Trading System, the Modernisation Fund aims to support ten EU countries with lower incomes in their transition to climate neutrality. The beneficiary countries are Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, and Slovakia. Under the revised EU Emissions Trading System (EU ETS), the Modernisation Fund will provide financial support to three additional beneficiaries from 2024 – Greece, Portugal, and Slovenia.
The Modernisation Fund supports investments in the generation and use of energy from renewable sources, energy efficiency, energy storage, modernisation of energy networks, including district heating, pipelines and grids, and just transition in carbon-dependent regions. An overview of previous disbursements can be found here.
The Fund complements other EU instruments such as cohesion policy and the Just Transition Fund. It mobilises significant resources, which can help eligible countries support investments in line with the REPowerEU Plan and the Fit For 55 package. It operates under the responsibility of the beneficiary countries in close cooperation with the European Commission and the European Investment Bank (EIB).