2.5 billion euros of revenue from the EU Emissions Trading Scheme is being invested in cleaner energy systems in 11 EU countries

The European Commission and the European Investment Bank have announced the disbursement of 2,500 million euros fromthe Modernisation Fund to support 51 energy-related projects in 11 EU Member States.

Financed by revenue fromthe EU Emissions Trading System (EU ETS), today’s disbursement brings the total funding available from the Modernisation Fund to €23,200 million since January 2021. The Member States benefiting from this round of funding are the Czech Republic (€516.8 million), Estonia (€44.8 million), Greece (€233.9 million), Croatia (€109 million), Latvia (€40 million), Lithuania (€169 million), Hungary (€552.3 million), Poland (€180 million), Portugal (€81.4 million), Romania (€636.9 million) and Slovenia (€20.2 million). 

These investments will help to modernise energy systems by improving energy efficiency in the energy, industry and transport sectors, whilst supporting the reduction of greenhouse gas (GHG) emissions. The Modernisation Fund supports lower-income beneficiary Member States in modernising their energy systems, meeting their climate and energy targets, and implementing theirNational Energy and Climate Plans.  Today’s disbursement will also contribute to the competitiveness of EU industry by supporting modern, efficient and resilient energy infrastructure, boosting renewable energy generation and storage, fostering innovation and helping to reduce the EU’s fossil fuel imports. 

The 51 selected projects focus on electricity generation from renewable sources, the use and deployment of such sources, the modernisation of energy networks and energy efficiency.Some examplesinclude:  

• the decarbonisation of heat production in district heating systems in the Czech Republic; 

• replacing diesel vehicles with zero-emission electric trolleybuses for public transport in Estonia;
• improvements to the efficiency of production processes at various industrial facilities with high energy-saving potential in Greece; 

• Digitalisation and development of the electricity grid in Hungary;
• Geothermal energy for district heating in Croatia; 

• Replacing diesel buses with electric buses and installing the necessary charging infrastructure in Latvia; 

• Decarbonisation of industry through energy efficiency and the replacement of polluting technologies in Lithuania; 

• Thermal energy storage in district heating systems and improving the energy efficiency of multi-family residential buildings in rural areas of Poland; 
• Energy efficiency programmes for public buildings in Portugal;

• the development of stand-alone battery-based electricity storage facilities in Romania; 

• capacity for electricity generation from renewable sources and energy storage, as well as the modernisation and development of the electricity transmission and distribution network in Slovenia.  

Fund

The Modernisation Fund, financed by revenue from the auctioning of emission allowances under the EU ETS, is a solidarity instrument designed to support 13 low-income EU countries (with a gross domestic product per capita below 75 per cent of the EU average between 2016 and 2018) in their transition to clean energy. The beneficiary Member States are Bulgaria, the Czech Republic, Estonia, Greece, Croatia, Latvia, Lithuania, Hungary, Poland, Portugal, Romania, Slovenia and Slovakia.

The Modernisation Fund supports investment in the generation and use of energy from renewable sources, energy efficiency, energy storage, the modernisation of energy networks – including district heating and electricity grids – and the just transition in carbon-dependent regions. The Fund complements other EU instruments, such as cohesion policy,the Recovery and Resilience Facility and the Just Transition Fund. It mobilises significant resources that can help eligible countries support investments in line with theREPowerEU Planand theFit for 55 package. It operates under the responsibility of thebeneficiary countriesin close cooperation with theEuropean Commissionand theEuropean Investment Bank.  

The upcoming deadlines for beneficiary Member States to submit investment proposals to receive support from the Modernisation Fund are 11 August 2026 for non-priority proposals and 8 September 2026 for priority proposals. Priority investments, which account for over 90% of the portfolio, focus on the modernisation of energy systems, the reduction of greenhouse gas emissions in the energy, industry and transport sectors, and the improvement of energy efficiency. All other investments that are eligible for support from the Modernisation Fund are considered non-priority investments and are subject to a more thorough analysis. 

More information: European Commission.