The Danish EU presidency says it has negotiated an EU budget for 2014-2020 that is “seriously open” to investments in climate-friendly technologies at the regional level.

As Denmark prepares to hand over the rotating presidency to Cyprus, one of the hottest issues on the table is the EU's next budget for the 2014-2020 period. 

The Danes will pass on to Cyprus the so-called "full-negotiating box" for the next seven years of EU budget spending, for a total proposed amount of around €1 trillion.

But despite the Danish proposal, efforts to 'green' the EU budget have remained modest, environmentalists say.

“It could be a nice signal, but in practice we do not expect it to have a real impact,” said Markus Trilling, EU funds coordinator at Friends of the Earth Europe and CEE Bankwatch.

Green 'enough'

When he first tabled his long-term spending proposal in June 2011, European Commission President José Manuel Barroso said it would be the greenest EU budget until now. 

The Danish presidency, which steered negotiations among member states in the first half of this year, took it a step further and allocated part of the bloc's regional funding for environmental-friendly projects. These would be taken from the European Regional and Development Fund (ERDF), which forms part of the Cohesion Funds aimed at helping Europe's regions develop.

“We have made a contribution to the climate agenda through the changes we made. You are incentivised to use a part of the cohesion money for climate purposes,” says a Danish presidency document.

The Commission's initial proposal was to use a minimum of 6% on climate-friendly projects but the Danes, in their compromise agreement, managed to raise it to 10%. 

Denmark also introduced a clause saying that investments in the energy-efficient refurbishment of buildings can be made with money from the Cohesion Fund. The 'minimum' 10% would eventually increase to 12%, if it included also climate-friendly urban transport.

'Serious opening' for low-carbon technologies

“We have made a serious opening for more environmental climate-friendly investments from the cohesion fund,” said Stefan llcus, first secretary of the permanent representation of Denmark to the EU who was in charge of structural funds during the Danish presidency of the Council of Ministers, which ends on 1 July. 

“Energy efficiency in buildings is one of the major priorities for the percentage in ERDF,” llcus added.

A coalition of industry groups promoting strong EU policies on energy efficiency in buildings urged EU countries to consider the role that the refurbishment of the building stock could have in supporting economic growth and asked leaders to send the necessary signals to kick-start investments. 

In a letter to the European Council, the coalition – formed by Cecodhas Housing Europe, Energy Cities, Eurima, EuroACE and the European Builders Confederation - said: "The future EU Growth Agenda should include a clear objective: to refurbish at least 10 million housing units. Such a commitment would boost the building sector activity, create hundreds of thousands of local, non-exportable and stable jobs and significantly contribute to reducing Europe’s costs for energy imports whilst improving quality of life and reducing fuel poverty.”

Fossil-fuel subsidies

But whilst it does promote energy efficiency in buildings, the EU's next budget is not fossil-fuel-proof, NGOs warned. 

Trilling, the green campaigner at Friends of the Earth Europe and CEE Bankwatch, referred to Denmark's proposed compromise text, which says the EU's next budget should support the shift towards a low-carbon economy by promoting research and innovation.

“We can smell shale gas exploration and investments in carbon capture and storage,” said Trilling. “This is a back door to fund those technologies and to revamp fossil-fuel plants.”

Trilling pointed to amendments to the commission's proposal asked by Polish MEP Jan Olbrycht, of the centre-right European People's Party, who suggested improving energy efficiency and increasing energy supply security through “construction and modernisation of electricity, natural gas and oil transmission and distribution networks, natural gas and oil storage infrastructure, as well as liquefied natural gas infrastructure.”

“Where is the thematic concentration in this?” Trilling asked.