Reclaiming Europe’s direction in 2026

After a tumultuous 2025 that put Europe under severe strain, 2026 will be a decisive year to keep the continent’s ecological transition afloat and to ensure local actors are placed at its helm. More fundamentally, it will be a test of whether Europe can still project a vision for a better tomorrow, or whether it will recoil into itself, abandoning its core values and the audacity with which it once defined its future.

Here is where 2025 left us, what to expect in 2026, and how Energy Cities plans to help reset Europe on a course that delivers a better future for all – starting locally.

How 2025 narrowed Europe’s options

2025 was a year marked by growing geopolitical and economic pressure. Faced with war on its borders, an erratic Trump disrupting transnational relations, and the rise of nationalist politics across its Members States, the EU’s response has been to tighten its control. In its quest to project a “Stronger Europe” and to assert power in a volatile environment, the European Commission has moved to concentrate its power and “simplify”.

This has translated into a marked centralisation of decision-making across policy areas, from energy infrastructure – as seen in the Commission’s recently proposed Grids Package – to investment planning, as embodied by the proposed Multiannual Financial Framework for 2028–2034. The proposal, released in July last year, strengthens the Commission and Member States’ grip on the EU budget, while leaving local and regional governments largely dependent on national discretion.

Meanwhile, in this new context, the Green Deal as a political compass was traded out for geopolitical concerns. Climate action did not disappear, but it was reframed – subsumed under the banners of security, competitiveness and affordability. Green Deal advocates scrambled to defend climate policies by translating them into the language of European sovereignty and industrial strength, with mixed results.

While this reframing has kept parts of the Green Deal legally intact and moving into implementation, it has also widened the door to dilution and rollback. Recent omnibus initiatives – legislative acts that amend multiple existing EU laws at the same time with the aim of simplifying them – have already weakened corporate sustainability and nature protection rules.

For local governments, these shifts have pushed them into a tightening squeeze. Centralisation at EU and national level has coincided with shrinking budgets, rising social pressure and declining political trust. Municipalities are being asked to deliver more – on energy, housing, mobility and social cohesion – while receiving fewer resources and less strategic recognition.

In several countries, long-standing regional support programmes for local climate action are getting cut, eroding local capacity just as implementation demands are intensifying. Although many cities entered 2025 with plans, experience and momentum, the year left them navigating a more hostile environment, one where responsibility increasingly outpaces capacity.

What to expect in 2026 and why this year matters

At first glance, 2026 may appear as a transitional year, wedged between the upheavals of the current EU mandate in 2025 and a looming election cycle in several Member States in 2027. But this also makes it a critical year. Many of the EU’s most consequential decisions on energy, climate and investment will be negotiated or set in motion in 2026, determining not only the pace of the ecological transition, but also who gets to shape and deliver it.

Reasserting Europe’s Independence

Energy, in particular, remains at the heart of Europe’s political priorities. Security concerns, affordability pressures and the imperative to phase out Russian gas continue to dominate the agenda. This focus creates both risks and opportunities. If narrowly framed, Europe’s energy response could entrench new fossil dependencies and recentralised systems. If approached strategically, it can accelerate the deployment of homegrown and locally sourced renewables, energy efficiency, and flexibility.

In this context, Energy Cities will seize the opportunities ahead to advocate for a Europe that reclaims its independence by anchoring its transition – and, more broadly, its future – in local communities.

Negotiating a locally grounded EU budget

The negotiations on the next Multiannual Financial Framework (2028–2034) will dominate 2026. As the Commission seeks to conclude the bulk of the negotiations ahead of an electorally charged 2027 (marked by the dismal perspective of French presidential elections), the risk is that speed comes at the expense of territorial balance. Current proposals point to a highly centralised budget, with local and regional governments largely absent from the picture.

Energy Cities, together with seven other networks through the Local Alliance, will fight hard to secure a meaningful place for cities and regions in the next EU budget. This battle will take place both in Brussels and in Member States, where national positions will be decisive.

Here, it’s all hands on deck: advocacy efforts will also have to be carried nationally. Members can soon access our “mobilisation toolkit” and learn how to get involved by joining our next webinar on 12 February.

An Energy Security Package that delivers homegrown solutions

The Commission is expected to present an Energy Security Package in March 2026, including the long-awaited Heating and Cooling Strategy and an Electrification Act.

Energy Cities will advocate for an approach rooted in local planning capacity, energy efficiency and renewable heat. We will push for policies that empower municipalities to tackle grid congestion, deploy flexibility and storage, and scale up decentralised and community-driven renewables – making locally produced homegrown energy the backbone of Europe’s energy security and independence.

From Fit for 55 to Fit for 90: defending a robust Energy Union

The new 2040 climate target will trigger a revision of the EU’s climate and energy framework in the second half of the year. The transition from Fit for 55 to a Fit for 90 package will reopen key legislation, including on renewables, energy efficiency and buildings.

Energy Cities will work to defend the integrity of existing rules in the Renewable Energy Directive (RED), Energy Efficiency Directive (EED) and Energy Performance of Buildings Directive (EPBD), ensuring they continue to support local implementation and citizen-centred solutions. Weakening these frameworks would undermine the very actors expected to deliver the 2040 target.

Redefining climate governance around local planning

Alongside the Energy Union package, the biggest opportunity for direction-setting lies in the revision of the Governance Regulation, planned for the second half of 2026. If designed well, it could help unlock investment capacity at local level and better align national plans with territorial realities.

Energy Cities will advocate for governance mechanisms that align with local action, enabling cities to plan long-term transitions with capacity and resources, and for measures incentivising sufficiency policies.

Building resilience from the ground-up

As climate impacts intensify, 2026 will also be a pivotal year for Europe’s approach to adaptation and resilience. The EU is expected to advance work on an Integrated Climate Risk and Resilience Framework, with significant implications for how climate risks are assessed, prioritised and addressed across territories.

Energy Cities, working with the EU Covenant of Mayors and the Local Alliance, will seek to ensure that this framework is grounded in local realities and implementation capacity. Cities and regions are on the frontline of climate impacts; they must therefore be equipped with the resources, data and flexibility needed to anticipate risks and protect communities.

Defending local democracy

Finally, the current political context calls for a return to the roots. If we want to keep empowering cities to decide their own futures, we need to focus on defending what makes it all possible: local democracy. Faced with growing threats to democracy in Europe, the EU is intensifying its efforts to safeguard democracy, through initiatives such as the Democracy Shield and the design of the new Agora funding programme.

Energy Cities will work to position cities as essential guardians of European democracy, highlighting the links between local capacity, participatory governance and democratic resilience. By drawing on successful examples of innovative local governance, we will explore how these models can be scaled across Europe – and how EU policies and funding can support them.

Keen to join the discussion and help us shape EU policy in 2026? Join us at our annual forum in Guimarães in April.