ECONOMY

EU funding on climate fight

eu-funding-on-climate-fight

A bill on mitigating climate change will be tabled in Parliament soon, with the prospect of significant future EU funding.

The EU funds available to Greece to mitigate climate change will reach €5.5 billion in the period from 2025 to 2032. They will be used mainly to meet the new, stricter EU standard of reducing greenhouse gas emissions by 2030 to levels 55% lower than in 1990. The program is called “Fit for 55.”

The proposals are not yet finalized; they must still be approved by the European Parliament and the 27 national parliaments, but there is no doubt that bold measures will be taken, commensurate with the scale of the climate emergency. 

To address the problem of vulnerable segments of society being disproportionately hit by the measures, which would include higher fuel and heating prices, the European Commission has proposed creating a climate social fund with a budget of €72.2 billion for 2025-32. Greece will get 5.52% of the money, that is €3.986 billion. Of those, €1.308 billion will be disbursed during 2025-27, while the other €2.678 billion, in 2028-32. Thus, Greece acquires yet another source of funding, on top of the Recovery and Resilience Fund and the EU structural funds (ESPA). The Commission proposal on the social fund includes an equal amount of member state participation.

The European Commission has also proposed increasing the budget of the modernization fund used to modernize the energy sector of members whose GDP is lower than 65% of the EU average. The initial proposal put the cutoff GDP point at 60%, but the change allows Greece and Portugal to benefit from those funds. Thus, Greece can look forward to another €1.5 billion in EU funding to modernize its energy sector. 

Funding is just a part of the proposals, which also includes a revision of the EU emissions trading system by extending it to shipping, a revision of air transport emissions regulations and creating a separate emissions trading emissions scheme for transport and building. This latter proposal is expected to face the biggest pushback because it affects a larger percentage of the population. The Commission also wants renewable energy to account for 40% of EU energy production in 2030 and ban sales of polluting cars from 2035.