European Parliament

2019-2024

Committee on Budgetary Control

30.11.2022

WORKING DOCUMENT
on ECA Special Report 9/2022 - Climate spending in the 2014-2020 EU
budget

Committee on Budgetary Control

Rapporteur: José Manuel Fernandes

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 SUMMARY OF BACKGROUND INFORMATION

Addressing climate change through internal policies and cooperation with international partner
is a key a key priority for the EU. The EU committed to reducing GHG (greenhouse gas)
emissions under the Kyoto Protocol and work towards a global climate-mitigation target of
limiting global warming to “well below” 2°C under the Paris Agreement. In 2011, the
Commission announced its objective for increasing the proportion of the EU budget related to
climate to at least 20% for 2014-2020. In 2021, the Commission reported that it had met the
target, having spent €216 billion (20.1 %) on climate-relevant measures. The 2021-2027 EU
budget includes an increased target of 30 % on climate action.

AUDIT SCOPE AND APPROACH

The objective of the audit was to determine whether the Commission had reported relevant and
reliable climate-spending information for 2014-2020. The Court examined how the
Commission applied its methodology in assessing climate spending, as well, as how the
reported expenditure contributed to climate action. Furthermore, the expected changes in
tracking climate spending post-2020 were also reviewed. The Court also produced this report
in order to help the Commission improve the future reporting on climate spending.

THE COURT’S OBSERVATION

The Commission bases its methodology for quantifying climate spending on assigning
coefficients to EU programme components such as intervention fields or projects, following
their expected contribution to climate action.
The Court reports that the reported spending was not always relevant to climate action in the
key components of agricultural funding, and key sub-sectors of infrastructure and cohesion
funding such as rail transport, electricity and biomass. Half of the EUs reported climate
spending is related to agriculture; however, the GHG emissions from farming in the EU have
not decreased since 2010.
The Court takes note on the inconsistent assumptions in assessing climate contribution of
infrastructure and cohesion funding. The Commission did not use conservative assumptions in
reporting on these projects.
Overall, the reporting on climate spending was assessed to be unreliable. It involved significant
approximation and tracked only the potential positive impact on climate without evaluating the
final contribution to EU climate goals. The analysis indicated that the Commission overstated
climate spending by at least €72 billion, over 80 % of which was from agricultural funding.
This means that around 13 % of the 2014-2020 EU budget was spent on climate action, which
was well below the 20% target. The Court observes that in 2021-2027, the climate tracking in
many policy areas remains essentially the same as for 2014-2020. The Commission adjusts or
clarifies the climate coefficients only for some funding programmes.

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THE COURT’S RECOMMENDATIONS

The Court recommends the Commission to:

1. Justify climate relevance of agricultural funding
The Commission should base its quantification of the contribution of the 2021-2027
agricultural policy to climate action on scientific evidence. In line with Article 100(3)
of Regulation (EU) 2021/2115 establishing rules on support for strategic plans under
the common agricultural policy, it should adjust the climate contribution accordingly,
if needed.

2. Enhance climate reporting

(a) The Commission should identify and report on EU spending with a potentially
negative impact on climate. In doing so, it should build on the “do no significant
harm” principle, as defined in the EU taxonomy.

(b) The Commission should issue guidelines applicable to all policy areas relevant to
climate spending. In doing so, it should establish and clearly disclose a coherent basis
for reporting, and consistent treatment of similar projects (e.g. same climate
coefficient) across the EU budget and the NextGenerationEU.

(c) For each programming period, the Commission should enhance the current climate
reporting to take stock of the unused (unspent and de-committed) amounts

3. Link EU budget to climate and energy objectives

The Commission should report on the contribution made by climate spending to EU
climate and energy objectives. It should focus in particular on how to measure the
impact of the budget on mitigating climate change.

THE COMMISSION’S REPLY TO RECOMMENDATIONS

The Commission accepts recommendation 1, 2b, 2c and 3. The Commission does not accept
recommendation 2a.
The Commission notes concerning recommendation 2a, that all basic acts impose compliance
with a suitable/tailored version of the “do no harm” principle and the EU Climate Law requires
the Commission to assess the consistency of any draft measure or legislative proposal
(including budgetary proposals), with the EU’s 2050 climate-neutrality objective and the EU
2030 and 2040 climate targets before adoption. Therefore, the Commission considers that the
benefit of expanding the climate mainstreaming methodology to cover negative impact as
proposed by the ECA would be lower than the additional burden it would impose on all relevant
actors.

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 THE RAPPORTEUR’S RECOMMENDATIONS

The Rapporteur,

 welcomes the ECA Special Report 9/2022 and expresses strong concern with the
Court’s overall conclusion that the Commission has over reported climate spending
during the 2014-2020 MFF by at least EUR 72 billion implying that instead of
spending 20% of the EU budget on climate during 2014-2020 the actual spending has
only been around 2/3 of the reported equal to around 13% of total spending during
2014-2020;

 notes furthermore that the goal for EU’s climate spending has been increased to 30%
for the 2021-2027 period and therefore, expresses deep concerns that also for the
2021-2027 MFF period, climate spending will be over reported by the Commission;

 welcomes that the Commission has accepted most of the recommendations from the
Court and asks the Commission to implement these recommendations as soon as
possible in order to improve the situation and make the reporting system much more
reliable;

 encourages the Commission to focus on the development of its methodology

concerning the Common Agricultural Policy where the most significant over reporting
has been identified and provide for technical assistance if appropriate, as a matter of
urgency for the 2021-2027 MFF period, in order to address the most serious problems
first;

 underlines that some part of EU spending will inevitably also have a negative effect on
the climate and criticises the Commission’s refusal to engage concerning the Court’s
recommendation to identify EU spending with potential negative effects;

 urges the Commission to engage in developing a methodology to estimate more

precisely the relative positive and negative effects on climate from different parts of
the EU budget in order to also evaluate budget spending based on such information; in
this connection also asks the Commission to clarify the link between the tracking
methodology and the “Do No Significant Harm (DNSH)” principle and provide
guidance on its application; finally encourages the Commission to ensure a future
methodology includes a clear distinction between adaptation effects and mitigation
effects;

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ANNEX I: EUROPEAN PARLIAMENT’S RESOLUTIONS

European Parliament resolution of 23 June 2022 on the implementation of the Recovery and
Resilience Facility (2021/2251(INI)) - Paragraphs 27, 40 and 41.
European Parliament resolution of 13 November 2020 on the Sustainable Europe Investment
Plan - How to finance the Green Deal (2020/2058(INI)) - Paragraph 26

ANNEX II: SELECTED PARLIAMENTARY QUESTIONS

Reform of the methodology for tracking climate expenditure, E-002049/2022, question for
written answer to the Commission, Rule 138, Petros Kokkalis (The Left), Marie Toussaint
(Verts/ALE), Pierre Larrouturou (S&D), Dimitrios Papadimoulis (The Left), David Cormand
(Verts/ALE), Eleonora Evi (Verts/ALE), José Gusmão (The Left), Jutta Paulus (Verts/ALE),
Maria Arena (S&D), Marisa Matias (The Left)
Commission answer
*******

EU climate spending presented in an overly positive light according to auditors, E-

002232/2022,
question for written answer to the Commission, Rule 138, Charlie Weimers (ECR), Jessica
Stegrud (ECR)
Commission answer
*******

Effective way of achieving climate policy objectives, E-004323/2020, question for written
answer to the Commission, Rule 138, Edina Tóth (PPE)
Commission answer
*******

Sustainable finance and credible global leadership at the Conference of the Parties to the
United Nations Framework Convention on Climate Change (COP26), P-004364/2021, 23

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 priority question for written answer to the Commission, Rule 138, Bas Eickhout (Verts/ALE)
Commission answer
*******

European Court of Auditors report on climate action, E-004386/2020, question for written
answer to the Commission, Rule 138, César Luena (S&D)
Commission answer

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