About the report:
If the EU is to achieve its ambitious climate targets for this decade and the two that follow, it must accelerate the energy transition. At the same time, it is facing challenges in the areas of security and competitiveness, which are creating new risks and investment needs. In the coming years, the decarbonisation of the energy sector and industry must therefore support not only emissions reduction, but also the building of the EU’s long-term resilience to crises. Support for such investments is to be provided by European funds under the EU budget for 2028–2034. This report discusses the evolution of investment needs in the energy sector and the synergies that the transition can deliver in the context of Europe’s new priorities, provided it is implemented with a view to a fair distribution of costs and benefits across EU regions, businesses, and citizens.
Key findings:
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Negotiations on the Multiannual Financial Framework (MFF) for 2028–2034 coincide with a period of revision of the EU’s priorities. Improving industrial competitiveness and investing in broadly defined security have become key objectives. In the new budget, these goals are to be supported by the €409 billion European Competitiveness Fund (ECF). However, its structure may hinder equal access to support for Member States and regions.
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The EU’s new priorities do not reduce the scale of investment needs in the energy sector. The sector faces the dual challenge of decarbonising generation sources and meeting growing demand for electricity. As the EU aims to carry out the energy transition in a way that supports the competitiveness of the European economy and avoids placing an excessive cost burden on end consumers, financing for electricity infrastructure should be targeted at the most price-forming elements of the system.
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The next EU budget may not be sufficient to meet the challenges of the energy transition in Poland. The available funds may prove disproportionate to investment needs, especially if their real value is eroded by inflation, as investment outlays are expected to increase sharply in the coming years.
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Investments should be planned in a way that maximises the participation of EU-based entities in their implementation. This offers them an opportunity to acquire new capabilities, while providing contracting authorities with greater predictability of cooperation conditions. When designing mechanisms to support local content, the EU should promote balanced development across all Member States, prevent excessive increases in investment costs, and ensure fair competition.