In order to take into account the objective of improving “energy security”, “it is possible to modify the distribution key” of funds intended to finance the ‘REPowerEU’ chapters, which will be inserted in the national recovery plans approved in the framework of the Next Generation EU Recovery Plan. Any new allocation criteria will, however, have to support the objectives of cohesion between Member States and remain compatible with the “extraordinary and temporary” nature of the Next Generation EU, which was set up exclusively to deal with the consequences of the Covid-19 pandemic.
These are the main findings of the opinion issued by the Legal Service of the Council of the EU on Wednesday 21 September, a copy of which has been sent to EUROPE.
In May, the European Commission proposed that the ‘REPowerEU’ strategy, which is designed to accelerate the EU’s energy diversification and the transition to cleaner energy, should be translated into specific chapters modifying the national recovery plans. And it will be financed mainly by the loan component of the European Recovery Plan, with around €200 billion still available, and also through the allocation of an additional €20 billion from the Emissions Trading System (ETS) allowances (see EUROPE 12955/4).
According to the EU Council’s lawyers, the distribution of the €20 billion, which is not regulated by the Recovery and Resilience Facility (RRF), the instrument for financing national recovery plans, could be adapted while respecting several principles inherent in Next Generation EU, of which the RRF is a part of.
As the European Recovery Plan is a cohesion instrument, any new distribution criteria should only complement the existing criteria for reducing disparities between territories, in particular the criterion based on the inverse of the GDP per capita.
Furthermore, according to the EU Council’s lawyers, using a criterion linked to the degree of dependence of each Member State on fossil fuels “would not raise any legal concerns”.
However, “criteria for allocating the new REPowerEU revenues that would be directly linked to the consequences of the invasion of Ukraine by Russia, such as for example the relative degree of dependence on Russian fossil fuels or the degree of exposure to the consequences of the war, would raise serious legal concerns”, they warn.
The Czech Presidency of the EU Council hopes to reach a political agreement in principle by the Member States on the proposal to amend the RRF Regulation to include the ‘REPowerEU’ chapters in early October.
In an opinion pointing out the shortcomings of the ‘REPowerEU’ strategy, the European Court of Auditors highlighted the mismatch between the allocation criteria of the ‘RRF’ facility and the energy diversification needs of the Member States (see EUROPE 13000/2).
See the opinion of the EU Council’s Legal Service: https://aeur.eu/f/38x (Original version in French by Mathieu Bion)