Negotiators from the Budgets and Economic and Monetary Affairs committees reached a provisional agreement with the Council on Wednesday morning. The deal provides that EU countries applying to receive additional funds through an amended recovery and resilience plan will be required, after the entry into force of this proposal, to include measures to save energy, produce clean energy and diversify energy supplies, as foreseen in the EU’s REPowerEU plan.

Boost independence and fight energy poverty

Negotiators agreed that the new rules will cover measures retroactively from 1 February 2022, with some limited exceptions. MEPs made sure that these measures are designed to support investments to tackle energy poverty for vulnerable households, SMEs and micro-enterprises.

Funding

Parliament negotiators ensured that from the additional 20 billion euro in grants proposed by the Commission, 8 billion will come from an earlier auctioning of national emission allowances under the EU Emissions Trading System (ETS), while 12 billion will be taken from the Innovation Fund. In addition, no revenue raised through the ETS can be used for investments in fossil fuel.

To adequately support the decarbonisation of industrial sectors, MEPs obtained a commitment from the Council and Commission to replenish the Innovation Fund to above its current size, with 2 billion euro already agreed and the remainder to be part of the negotiations on the ongoing ETS reform.

This additional 20 billion euro…