Joint press release: Commission and European Investment Bank clear an additional €2.7 billion from emissions trading revenues for cleaner energy systems via the Modernisation Fund
Following an assessment by the European Investment Bank under the Modernisation Fund, the European Commission has today disbursed €2.7 billion to support 39 investment projects in eight beneficiary Member States. This includes the very first investment confirmed in Slovenia under the Fund, a Member State which became beneficiary in 2024. These projects will help lower-income EU countries to strengthen their clean industrial sector and meet their 2030 climate and energy targets by reducing greenhouse gas emissions and improving energy efficiency. Funded by revenues from the EU’s Emissions Trading System (EU ETS), the Modernisation Fund has now provided €15.45 billion of investment to support projects in the clean energy transition since its launch in 2021.
The new support announced today complements the investments announced in June of almost €2.97 billion for other 38 projects, bringing the total disbursements from the Modernisation Fund in 2024 to €5.67 billion, covering 77 projects in 11 countries. This year alone, disbursements were made to Bulgaria (€65 million), Croatia (€52 million), Czechia (€1.283 billion), Estonia (€84 million), Hungary (€202 million), Latvia (€27 million), Lithuania (€185 million), Poland (€1.733 billion), Romania (€1.956 billion), Slovenia (€309 million) and Slovakia (€153 million).
The 77 projects supported this year focus on electricity generation from renewables, modernisation of energy networks, energy efficiency, and the replacement of coal generation with lower carbon intensity fuel. They include:
- reinforcement of the electricity transmission grid to support renewables integration in Bulgaria;
- production of electricity from photovoltaics and energy storage by water service providers in Croatia;
- reduction of CO2 emissions during heat production in Czechia;
- improved energy efficiency and promoting renewable energy use in public buildings in Estonia;
- modernisation and development of renewable energy-based district heating systems in Hungary;
- use of renewable energy sources in multi-apartment buildings, public buildings, and energy communities in Latvia;
- modernisation of multi-apartment buildings in Lithuania, ensuring that renovated buildings achieve at least Energy Efficiency Class B and provide energy savings of no less than 40%;
- development of electricity storage systems in Poland to improve the stability of the national electricity network;
- installation of minimum 1 500 MWh of battery storage systems to existing renewable power plants in Romania;
- increasing energy efficiency and reducing greenhouse gas emissions in lower-income households in Slovakia;
- investments in renewable electricity generation and energy storage capacities in Slovenia.
The deadline to submit investment proposals for potential Modernisation Fund support in the next disbursement cycle is 18 February 2025 for priority proposals and 21 January 2025 for non-priority proposals. Priority investments are those with a focus on modernising energy systems, reducing greenhouse gas (GHG) emissions in energy, industry and transport, and improving energy efficiency listed in the EU ETS Directive. All other investments qualifying for the Modernisation Fund are considered as non-priority investments subject to additional scrutiny.
Background
The Modernisation Fund, funded by revenues from the auction of emission allowances from the EU ETS, now aims to support 13 EU countries in their transition to climate neutrality. Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, and Slovakia have benefitted from the Modernisation Fund since its launch in 2021.The revised EU ETS has broadened the scope of the Modernisation Fund, which can now provide financial support to three additional beneficiaries since 1st January 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.
The Fund complements other European 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 its beneficiaries in close cooperation with the European Commission and the European Investment Bank (EIB).
The EIB’s investment proposal assessment activities in the Modernisation Fund are ring-fenced from the standard EIB financing and technical assistance operations to avoid any potential conflict of interest in carrying out the activities mandated in accordance with the ETS Directive and the Commission Implementing Regulation.
