Representing one third of the EU budget, Cohesion policy is a significant funding source for decarbonisation and a key pillar of the EU’s action to achieve sustainable growth within planetary boundaries while increasing EU competitiveness.
This data story explores the role of Cohesion policy in decarbonisation of energy, buildings and transport through figures, examples, and a discussion of the rationale behind these investments.

EUR 100 billion investment for decarbonisation is planned

A key policy objective set by Cohesion policy for the 2021-27 period is delivering “a greener, low carbon transitioning towards a net zero carbon economy”, which gathers most of Cohesion policy action on decarbonisation. For the 2021-2027 period, 33% of the total ERDF and 56% of the Cohesion Fund is dedicated to climate mitigation and adaptation. All these resources combined amount to about EUR 100 billion of planned investments in decarbonisation.
As a result of this support, more than 25 million tonnes of greenhouse gas emissions per year will be reduced in the EU by 2030 – an amount equivalent to the average annual emissions of Croatia. These investments will also impact key sectors of the EU economy and ecosystems: 86 million hectares of forests (more than three times Sweden’s forest area) and over 110 million people (about the population of Germany and Poland combined) will be better protected from climate-related disasters. Overall, the energy and circular economy transitions will be accelerated, and disparities on transport decarbonisation will be addressed.

Tackling climate-induced regional disparities with Cohesion policy decarbonisation investments

Significant progress has been made already in the transition to climate neutrality, as the EU has reduced its total greenhouse gas (GHG) emissions by 27% since 1990, with significant regional variations across the EU. To continue the transition until 2050 (following the EU climate neutrality objective in the European Climate Law and the European Green Deal) and achieve the 2030 and 2040 targets on the way, regional disparities will need to be tackled.
As identified in the 9th Cohesion Report, Coastal, Mediterranean, and especially Southern and Eastern European regions will be the hardest hit by water shortages and droughts, floods, forest fires and extreme weather events such as storms and heatwaves. These areas face over 1% of regional GDP in annual economic losses due to climate change, in addition to ageing populations vulnerable to climate impacts.
Source: DG REGIO and JRC.
The 9th Cohesion Report also underlines that in most cases the economically strongest, urbanised regions in the EU with a high share of knowledge-intensive services and human capital are in a better starting position to succeed in the green transition. On the other hand, most of the regions showing higher vulnerability to climate change impacts are already lagging behind the GDP national averages and will need additional support to implement the decarbonisation investments needed to reach climate neutrality. The recent EC Communication on managing climate risks in Europe sends a strong message on how impactful climate change can be to the EU as a whole and regions individually.
In aggregate terms, DG REGIO modelling analysis shows that, during the next 20 years, the 2021-2027 Cohesion Policy programmes will generate long-lasting and structurally positive economic effects in the regions hardest hit by climate change, as shown in the map.

Cohesion policy helps tackle regional disparities

However, decarbonisation investments are often among the most difficult to implement in MS and regions, and yet are crucial to achieve 2030 and the proposed 2040 targets. Capacity-building at regional and local levels will be fundamental to channel public and private resources into such investments. New initiatives under Cohesion policy, such as the Cohesion for Transitions (C4T) Community of Practice and the Just Transition Platform (JTP), are important tools and support mechanisms to authorities and stakeholders in this regard. The concept of sustainability transitions, can be used as a blueprint to guide this process.
Additionally, the Just Transition Fund (JTF), newly created for the 2021-2027 period with EUR 19.2 billion, also invests in the territories hardest hit by the transition to a decarbonised economy to boost their economic diversification and industrial reconversion. For more information on the JTF, please visit our dedicated JTF Data Story.
Map 3. Long-run (20 years after beginning of the implementation) impact of the 2021-2027 cohesion policy programmes on regional GDP (% deviation from baseline) - climate objectives.
Source: DG REGIO and JRC, “Economic growth and environmental objectives: a study using 2021-2027 cohesion policy regional data”

Cohesion policy decarbonisation investments by sectors

The sections below provide detailed data on Cohesion Policy decarbonisation investments grouped by main sectors that need to decarbonise to achieve climate neutrality: energy, buildings (REPowerEU) and transport.

Cohesion Policy investments in the energy transition and contribution to REPowerEU

Cohesion Policy provides significant support to REPowerEU in all EU MS (as shown in the Graph), focusing on regions most in need in the energy transition. Most resources concentrate on energy efficiency in the “non-industry” (buildings) sector and on energy infrastructure, followed by renewables.
As a result of Cohesion Policy energy investments, public and private buildings across the EU will be renovated to reduce their energy demand in an amount equivalent to the total yearly electricity consumption of Luxembourg. Additionally, Cohesion Policy investments will bring additional renewable energy capacities installed amounting to the production capacity of ten large nuclear power reactors.

Cohesion policy investments in transport decarbonisation

The graph below provides an overview on Cohesion Policy decarbonisation investments on transport. The scope of these investments include: rail infrastructure, multimodal inland waterways, clean urban and digitised transport, road, and cycling infrastructure.
The largest recipients of these investments are Poland and Romania, followed by Portugal and Italy. 97% of Cohesion Policy investments on transport decarbonisation focus on less developed EU Member States. The policy supports a significant share of the public investments in transport in these MS and regions. In Poland for example, ERDF and Cohesion Fund cover 33% of all rail investments in 2021-2027.

Practical examples of Cohesion policy decarbonisation investments

How do Cohesion Policy decarbonisation investments look like in practice? Some examples are given below. The Estonian Islands’ Energy Agency was awarded a C4T GROUNDWORK technical assistance assignment as part of the first call for applications. The assignment started in September 2023 and was completed in March 2024.

Acquisition of new railway electric units for the South Moravian Region (Czechia)

Total budget: EUR 265 000 000 - EU contribution (CF) 85%
Project timeline: December 2019 - June 2023
The project implements the acquisition of 36 new electric railway units for regional passenger transport in the South Moravian Region to provide vehicles for lines S2 and S3. The aim is to increase the quality and reliability of rail passenger services in a public service obligation and to strengthen its competitiveness for sustainable mobility. The project will enable the comprehensive renewal of vehicles on the S2 and S3 backbone lines and thus enhance the attractiveness of Integrated Public Transport System (IDS JMK) in the area with the largest demand for transport services.
More information about the project can be found on this link.

Capacity building for energy transition investments in the Saare archipelago (Estonia)

The Estonian Islands’ Energy Agency was awarded a C4T Groundwork technical assistance assignment as part of the first call for applications of the Cohesion for Transitions (C4T) Community of Practice - an initiative launched by DG REGIO to provide assistance for decarbonisation investments financed by Cohesion Policy. The assignment started in September 2023 and was completed in March 2024. C4T Groundwork technical assistance was essential in setting up the first-ever regional energy agency in the Saare archipelago, which is already mainstreaming fundamental investments in the energy transition in the area.
More information about C4T can be found this link.

More information

For more information on EU Cohesion policy go to Inforegio and to Kohesio for information on projects supported.
Author: Lara DE LA FUENTE ALONSO, Luis GALIANO BASTARRICA, Dora O'NEILL
Date of publication: September 2024