European Union Invests €2 Billion In Clean Energy Infrastructure Projects

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The European Union (EU) recently disbursed modernization fund, of €2.17 billion to help the energy within nine Member States through 19 selected projects. These investments are set to help lower-income EU countries to meet their 2030 climate and energy targets.

It will help to reduce greenhouse gas (GHG) emissions in energy, industry and transport, and improve energy efficiency. They are funded by revenues from the EU Emissions Trading System (EU ETS). The Modernization Fund has now disbursed a total of €9.68 billions of European Union 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 was for 31 projects, and the recent disbursement of a further €2.17 billion and 19 more projects brings the total Modernization Fund investments for 2023 to €4.66 billion for 50 projects. The support from the ‘Modernization 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 modernization 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.

The modernisation fund generates revenues from the auction of emission allowances under the European Union Emissions Trading System, the modernisation Fund aims to support ten European Union 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 Modernization 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 mobilizes 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).