Updates: 2010, 2009, 2008, 2007

Financial Resources for the EU 27 for the Period of 2007-2013:
The available resources amount to EUR 308.041 billion (in 2004 prices) or 347.410 billion EUR (in today’s prices):
• 81.5 % for the convergence objective;
• 16 % for the Regional competitiveness and employment objective;
• 2.5 % for European territorial cooperation objective.
The source of the following graph and table is the Cohesion Policy guide 2007-2013 (pdf file 4,5 MB) by European Union Regional Policy, January 2007, 164p

Allocation by Objective of Financial Resources	Indicative Allocation by Member State, 2007–13 (current prices, in million EUR)
(pdf file 81 kB)	(pdf file 150 kB)

Latest financial implementation of the OP, until 30.04.2010.
(pdf file 12 kB)

Evaluation of the New Member States in the Period of the 2007-2013
Friends of the Earth Europe and CEE Bankwatch Network are monitoring plans for the use of EU Structural and Cohesion funds in the energy and transport sectors of central and eastern European countries over the next seven years. The analysis is being continuously updated based on changing governments' plans in collaboration with our NGO colleagues in central and eastern Europe.

The analysis shows that not enough is being done to promote energy efficiency, renewable energy, and environment-friendly public transport in the new member states. If the plans are not changed, the developments spurred by EU funding will likely result in increasing greenhouse gas emissions, as has happened previously with south European countries and Ireland.

EU Funds for Efficient and Renewable Energy
Central and eastern Europe has grossly wasteful energy usage and vast, unexploited potential for renewable energy. For every euro of gross domestic product, CEE countries consume 50 percent more energy than western Europe, which works as a drag on their economies. Investments in energy savings would reduce energy bills for schools, hospitals, municipalities, households and businesses.
The share of renewable energy in electricity consumption in CEE countries is only 6 percent as opposed to 15 percent in the EU-15 countries. A funding spur for decentralised wind, solar or biomass energy projects would create new jobs, provide a boost to local economies and cut their dependency on external energy sources.
However, only 3.1 - 3.2 billion EUR (2 %) of the total EU funding allocation of 157 billion Euros for CEE countries in 2007-2013 is planned for investment in sustainable energy projects.


Source: Bankwatch and FoE-Europe

Poland and Hungary are the most worrying cases, planning to spend just around one percent of their EU money on energy efficiency and renewable energy projects (see chart). In contrast, Lithuania is planning to invest more than five percent of its future EU funding in such projects.


Source: Channelling EU Funds into Efficient and Renewable Energy, FOE Europe, 2007 (pdf file 215 kB) by Bankwatch Network and FoE-Europe, March 2010, 9p

The draft spending plans of most CEE countries ridicule the EU's newly reformed cohesion policy, which emphasises energy efficiency and renewable energy as one of the top investment priorities for the Structural and Cohesion funds.
The record of Structural and Cohesion funds on climate change up until now has been an unequivocal failure. The four countries that have so far received the most EU money - Spain, Portugal, Greece and Ireland - have also witnessed by far the greatest increases in greenhouse gas emissions in the EU.

Greenhouse gas emissions of countries receiving the most EU funding (% change 1990-2004) :

Greenhouse gas emissions dropped significantly in Central and Eastern European countries in the 1990s due to economic restructuring, but they are now rapidly rising again.

Friends of the Earth Europe and CEE Bankwatch Network are urging the Commission and the member states to revise the plans:

• At least five percent of all EU funds in each member state should be specifically allocated for energy efficiency and renewable energy projects
• All other EU-funded investments in buildings and housing should systematically integrate all available energy-saving measures and renewable energy sources

The report is endorsed by associations of European cities promoting sustainable energy (Energie-cites), the renewable energy industry (EREC) and Europe's leading companies manufacturing energy saving products (EuroAce).

SF Problems
• Transparency. Commitment of beneficiary and donor to make publicly available the basic data of the project. Information about the projects, which were approved, why they were approved and why the others were rejected.
• Public Awareness. Community leaders do not know much about RE and how they can benefit from it.
• Small vs. big projects. Small decentralised RE projects in rural areas (communities).
• Lack of skilled persons.
• Public (NGO involvement is missing.

Present programming period (2007 - 2013)
• The biggest potential in EE area is in insulation of buildings (savings of 30 --40 % of energy consumption) --no impact of SF yet.
• Effective way to finance insulation of multi --story apartment buildings (50% of households) through SF is missing. Energy savings would offset the renovation costs. savings would offset the renovation costs.
• Public sector can benefit most but has no big interest in RE. Risk that old district heating systems (around 40% of households in CEE is connected to them) based on coal or oil boilers will not be converted to modern and efficient boilers based e.g. on biomass. based e.g. on biomass.
• Biomass heating (biggest and most cost effective way of RE utilization) very slow development despite huge potential and various forms of support.

You can find more information about this on www.bankwatch.org and www.foeeurope.org .

Updated: 2009/2008
The EU structural funds are supposed to be the major financial tool towards development of renewables and energy efficiency in the new EU member states. The new programming period was set to start from 2007. The whole year 2007 and even the largest part of the 2008 were devoted to the preparation of programming documents (operating plans) on national level and final approval at European Commission. Thus the first calls for applications were launched only in 4th quarter of 2008. It is obvious that there were no projects funded in 2008 in many new EU member states e.g. in the Slovak and Czech republics. During the 4th quarter of 2008 were all national documents published and first calls applications issued.

Setting up the national administrative structure was another important issue. In many countries major changes with respect to previous programming period were introduced. In Slovakia e.g. the new rules and application requirements led to the fact that those projects which were approved by the national committees but not financed in the last programming period needed new project documentation in new programming period and thus were delayed by several years. This was the fate of one of the best projects in region which can serve as the example for the NGOs in Central and east European countries. The project of Slovak NGO CEPA originally was proposed in 2003. It is oriented on substitution of coal fired heating boilers by biomass ones in 9 small villages in countryside of Central Slovakian region - Polana. Due to administrative delays is going to be realised in 2009. This project is also supported by FAE Slovakia (INFORSE-Europe member). Read about the project in the database here or at FAE's website here.


Update: December 2007

All these issues will be financed by structural and cohesion funds where structural fund includes European Regional Development Fund (ERDF) and European Social Fund (ESF).
The budget of the European cohesion policy represents about 36% of the total EU budget for the period 2007-2013. A greater proportion of the overall budget will be allocated to the poorest regions where the Gross Domestic Product (GDP) per capita is lower than the EU average.
The above mentioned three objectives determine the eligibility of the regions to use the European Funds. They also include provisions related to the sustainable energy issues. Each member state should comply with these priorities when preparing its national strategy and operational programmes.

Objectives and the use of funds:

1. Convergence objective (financed from ERDF, ESF, Cohesion Fund).

ERDF will be used for:
· Improving security of supply.
· Clean Transport.
· Improvement of energy efficiency and development of renewable energies.

Cohesion Fund will be used for:
· Transport and environment (as in the previous period but on a sustainable basis and with clear environmental benefit in the field of energy efficiency and renewable energy sources - new approach).

2. Regional competitiveness and employment objective (ERDF, ESF).
ERDF will be used for:
· Stimulating energy efficiency and renewable energy production.
· Development of efficient energy management systems.
· Promoting clean and sustainable transport in urban areas.

3. European territorial cooperation objective (ERDF).

ERDF will be used for:
· Reducing isolation through improved access to energy systems, enhanced inter-operability of national and regional systems.
· Networking, exchange of experiences and good practice.

Distribution of the total EU cohesion policy budget: € 347 billion (current prices) is following :

Which Regions are Eligible for Funding?

The whole EU is covered by one or several objectives of the cohesion policy. To determine geographic eligibility, the Commission bases its decision on statistical data. Europe is divided into various groups of regions corresponding to the classification known by the acronym NUTS.

Cohesion Fund

Member States, which Gross National Income is lower than 90% of the EU average can benefit from cohesion fund: that is all the regions of the following countries: Bulgaria, Czech Republic, Estonia, Greece, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Portugal, Romania, Slovenia, and Slovakia

A phasing-out system is granted to Member States, which would have been eligible for the Cohesion Fund if the threshold had stayed at 90% of the Gross National Income average of the EU at 15 and not at 25. This only concerns Spain.

1. Convergence objective

Regions at level 2 of the NUTS classification whose Gross Domestic Product per inhabitant is less than 75% of the EU average are eligible for funding under the Convergence objective. They include:

A phasing-out system is granted to those regions which would have been eligible for funding under the Convergence objective if the threshold of 75% of GDP had been calculated for the EU at 15 and not at 25:

2. Regional competitiveness and employment objective

All regions which are not covered by the Convergence objective or by the transitional assistance (NUTS 1 or NUTS 2 regions depending on the Member States) are eligible for funding under the competitiveness and employment objective.

A phasing-in system is granted until 2013 to NUTS 2 regions which were covered by the former Objective 1 but whose GDP exceeds 75% of the average GDP of the EU-15.

Regions eligible for transitional assistance under the Competitiveness and Employment objective:

The main national documents related to the utilisation of EU funds are called National Strategic Reference Frameworks (NSRF). They are already prepared and the NGOs are strongly encourage to take a closer look at it. In this document each member state defines:

Funds are then allocated to thematic Operational Programmes (OP). Each OP contains a set of priorities, eligible actions and beneficiaries. The content of these documents is discussed and negotiated with the European Commission (EC). When two parties reach an agreement, the EC adopts the programmes and provides an advance to the MS to allow them to set the programmes in motion.

Operational Programme is an official document that covers different issue (e.g. OP Human Resources, OP Environment, etc.) and contains practical information such as actions and examples of projects it supports, eligible beneficiaries, co-financing rates, information on managing and implementing authorities etc. Many OP support the actions in the field of sustainable energy although they are not directly linked to environmental issues. Energy is sometimes hidden in the OP such as Environment, Infrastructure, Regional OP or even OP Human Resources that might support “soft actions” financed from the ESF, such as professional trainings for installers of renewable energy technologies or education of energy managers etc.

Managing authorities (usually ministries or regional authorities) and implementing authorities (e.g. governmental agencies) then ensure smooth operation of individual OP. The extent to which the MS include urban and sustainable energy issues into their OP and to which they delegate management of funds to the regional and local authorities varies from country to country.

How the Sustainable Energy is Tackled by the NSRF?

EU cohesion policy is based on the strategic document called Community Strategic Guidelines. This document was elaborated by the European Commission and the EU Member States. It contains several priorities concerning environment and sustainable use of energy that will be supported from the European Funds. Each Member State should comply with these priorities when preparing its national strategy and operational programmes.
There are several OP supporting implementation of sustainable energy projects already approved by the EC and published by member states. Several others will follow soon.

The overview below is based on approved and negotiated versions of OP in Bulgaria, Czech Republic, Lithuania, Poland, Slovakia, Romania and Slovenia. The negotiated versions are a subject to change. Final versions were scheduled to be approved by the EC by the end of 2007 and published on the websites of relevant managing authorities.

OP in new EU Member States, which include Sustainable Energy issues in 2007-2013:

• Bulgaria (07-13)
• Czech Republic (07-13)
• Hungary (07-13)
• Lithuania (07-13)
• Poland (07-13)
• Romania (07-13)
• Slovakia (07-13)
• Slovenia (07-13)