How the EU Modernization Fund can be a driver for the fossil-free energy transformation

With a view to the forthcoming revision of the European Emissions Trading System Directive, the Green Tank, in collaboration with 5 other environmental organizations under the auspices of Climate Action Network (CAN) Europe, is presenting its position on the key issue of the Modernization Fund which is expected to accumulate funds in the order of 25 billion euro during the decade 2021-2030.

There are many loopholes in its current set-up which can cause a continued lock-in into fossil fuels in the Beneficiary Member States. It is likely that the European Commission will also suggest changes to the Modernization Fund as part of their legislative proposal for the revision of the Emissions Trading Directive (ETS). Several Member States have been actively calling for an increase of the Fund. The common positions of environmental NGOs and think tanks on the Modernization Fund aim to ensure compliance with two key principles:

  1. Projects that will benefit from the Fund focus on renewable energy and energy efficiency investments which are compatible with the climate neutrality, zero pollution, and just transition objectives of the European Green Deal, and do not cause a lock-in into fossil fuels;
  2. The revision of the Modernization Fund does not provide support for fossil fuels, but becomes a driver for the just transition of our economy based on a highly efficient and 100% sustainable renewable energy system, and does not go against the objectives of the European Green Deal and the EU’s commitments under the Paris Agreement.

You may read the complete briefing here.