Member States stepping back from EU's low-carbon investment agenda

Brussels - Representatives of EU Member States meeting tomorrow in Brussels intend to promote the financing of gas distribution, storage and transmission from Cohesion Policy funds meant for low-carbon measures in the next EU budget. Such support for gas would mean the EU’s dependency on fossil fuels will continue for decades, undermining global efforts to combat climate change.

At their meeting in Brussels tomorrow, member state ambassadors to the EU (1) have to agree on their position on investment priorities for the next round of Cohesion Policy funds (2014-2020) set out by the European Commission last year (2). While the Commission’s proposal intended that a significant financial contribution from EU funds goes to the decarbonisation of European economies, member states are now trying to include “developing smart gas and power distribution, storage and transmission systems” (3) among the measures to be financed from the European Regional Development Fund (4), even though ERDF was one of the instruments that was supposed to promote the EU 2020 climate targets to reduce CO2 emissions.

This unexpected promotion of fossil fuel subsidies from the EU budget comes weeks after a similar proposal from the REGI (Regional Development) Committee of the European Parliament. Jan Olbrycht, a Polish MEP who will lead the negotiations with the Council on the next regional funds from the Parliament side, proposed last month to include oil and gas transit and storage infrastructure among the investments to be financed with funds specifically earmarked for low-carbon measures from the ERDF. (5)

“This jointly promoted resurrection of carbon intensive energy sources is threatening the EU’s economies even in the medium-term”, comments Markus Trilling, CEE Bankwatch Network and Friends of the Earth Europe EU funds coordinator. “Subsidising gas today means not only that we crowd out financing opportunities for new renewables and energy savings, which need the subsidies more, but also that we lock in our economies into fossil-fuel dependency for three-four decades to come. Simply put, we are willingly choosing to further intensify the current climate crisis.”

Notes for the editors:

(1) COREPER are the ambassadors of member states to the European Union. While COREPER meetings rarely make headlines, the position taken by this body tomorrow will provide the fundamental guidance for the General Affairs Council deciding on the next EU budget June 26. Details about tomorrow’s meeting here:
http://eu2012.dk/en/Meetings/Coreper-PSC/Jun/COREPER-II-14-6

(2) Read more about the European Commission’s proposals for the next EU budget published last year:
http://bankwatch.org/checklist-eu-cohesion-policy

(3) No mentions of gas support from ERDF funds existed in the Commission proposal; gas support is currently being pushed by some member states of the EU. The gas insertions appear in a draft prepared for the COREPER meeting tomorrow seen by Bankwatch.

(4) The ERDF if one of the main regional funds, aimed at decreasing disparities among European regions. http://ec.europa.eu/regional_policy/thefunds/regional/index_en.cfm

(5) Read more about the Olbrycht proposal and its significance for the decision-making process over the next EU budget:
http://bankwatch.org/news-media/blog/fossil-fuels-rebranded-low-carbon-a...

For more information, contact:

Markus Trilling
EU Funds Coordinator
CEE Bankwatch Network and Friends of the Earth Europe
markus.trilling AT bankwatch.org