EU readies for the “money talk”: Quick overview of what the future could hold

By next May, the European Commission should put on the table a proposal for the next EU budget, the so-called “Multi-annual Financial Framework” to put it in EU jargon.
Ahead of this important milestone, Energy Cities’ Board of Directors met with Isabelle Thomas, the European Parliament Member in charge of the file.

The news were rather positive, as she announced the Parliament voted in favour of earmarking 30% of Cohesion and Structural Funds for climate action, and was optimistic the Commission would support such a move, the real battle still to be fought with the Council.
On February 22nd, Energy Cities’s board, meeting a few hours after the Covenant of Mayors Ceremony, adopted a position paper on how the EU budget should be articulate to support a brighter EU future.

#1 Disrupting traditional economics

Beyond going on a full carbon or fossil fuel detox, the EU as a whole needs to promote the wide-ranging structural reforms that will accelerate the emergence of a new socio-economic model, most adapted to today’s challenges and realities. The current funding priorities of the European Commission have already acknowledged the importance of moving away from a grant culture, financing one-off projects disconnected from one another, to instead favour a more integrated approach. Over the past decade, the creation of local energy agencies financed by the Intelligent Energy Europe programme was a first step in the right direction. The European budget now needs to go the next mile and support local authorities in setting the foundation for the new economic model to emerge, fostering wider cross-sector partnerships and activities around the energy transition. This calls for a support programme for the creation of integrated “Transition Agencies”, i.e. spaces for territorial intelligence, partnerships and entrepreneurship around the energy transition.

#2 Reconciling Europe’s energy and cohesion policies

Europe’s cherished objective of social and territorial cohesion, key to its stability and embedded in the Treaty, should not only be understood as cohesion between EU member states but also very importantly within them. Cities and regions should be encouraged to work as equal partners, mutually reinforcing each other’s plans and priorities. Bringing this vision to life will require a deep overhaul of the management and allocation of Structural Funds in the future EU budget, towards genuine “public-to-public” partnerships, as an essential piece of the new institutional governance that should underpin a decentralised energy transition.

#3 Going full swing for community energy

At present, EU programmes and funding lines are still very much focused on energy efficiency improvements or large scale energy infrastructure projects, while the amount of funds dedicated to “energy democracy” is very limited.
The same conclusion goes for local efforts deployed across European cities to take increased ownership of local energy systems. Targeted finance to support prosumers, cities and citizen-led clean energy community projects is much needed across Europe, especially in Central and Eastern European countries.

To go furtherPublic consultation on EU funds in the area of cohesion and Energy Cities’ responsePublic consultation on EU funds in the area of investment, research & innovation, SMEs and single market and Energy Cities’ response