Achieving climate neutrality requires “significantly larger” amounts of funding than what is currently on offer in the EU’s long-term budget proposal for 2021-2027, Warsaw said in a memo circulated ahead of an EU leaders’ summit opening on Thursday (17 October).

The Polish demands are spelled out in a “non-paper” circulated to EU leaders meeting in Brussels for a two-day summit beginning on Thursday.

Poland was one of four EU countries to block a deal on net-zero emissions at the last meeting of national leaders in June. And Warsaw has now clearly linked its backing for the 2050 climate goal to the budget negotiation.

Poland set to delay EU deal on 2050 'climate neutrality' target European leaders will struggle to broker a stronger climate package before December, experts say, as Warsaw prepares to play hard for funding. EURACTIV’s media partner Climate Home News reports.

Europe’s increased ambitions require “new instruments – including finances – in order to support effectively the transition to a climate-neutral economy,” Poland said in the memo, obtained by EURACTIV.

Investments in the range of €180-€290 billion will be needed annually in order to reach the 1.5°C objective of the Paris Agreement, according to the European Commission.

“The existing framework and instruments will not be sufficient to achieve climate neutrality,” the memo insists, saying higher climate ambition “should go hand in hand” with bigger sources of funding, especially for the poorest EU countries.

“We expect that the Commission will present concrete figures broken down by member states,” the memo states, underlining that the costs of the transition are higher for countries which are heavily dependent on coal, like Poland.

To make sure EU money goes in priority where it’s most needed, Poland is calling for new “conditionality” rules to support regions and countries with the biggest needs.

In concrete terms, this means “the Just Transition Fund needs to be significantly larger” and “go well beyond” the EU’s proposed long-term budget for 2021-2027, the memo said.

Environmental campaigners at Climate Action Network (CAN) Europe, have backed calls for additional money to finance the energy transition, saying “targeted finance” is needed for climate action, “particularly in Europe’s most fossil-fuel dependent regions”.

However, they also insist that “the entire EU budget” must be used to catalyse the clean energy transition across all sectors of the economy.

The Just Transition Fund is a pot of money worth €4.8 billion that the European Parliament wants to include in the EU’s next long-term budget. However, critics say the fund is only a rebranding of existing money allocated to EU regions and does not represent an extra source of finance.

EU's 'just transition fund' gesture muddies budget waters Europe’s fossil fuel-dependent regions could benefit from an additional €5 billion under the next EU budget, thanks to a proposal endorsed by the European Parliament. But it could complicate already complex talks with the Council, which is eager to cut future spending.

EIB lending

Moreover, Poland says future energy funding by the European Investment Bank (EIB) should “allow for gas-related projects” – including new transmission pipelines and gas-fired power plants that replace heavily-polluting coal plants.

Gas projects are strongly opposed by environmental campaigners, who say they risk diverting much-needed funds from renewables and energy efficiency.

The Socialists and Democrats (S&D) in the European Parliament have backed Poland’s claim, saying fresh money is required to finance the “European Green Deal” promised by incoming Commission President Ursula von der Leyen.

“The entire S&D group is asking for guarantees on financing the Green Deal,” Pierre Larrouturou, a French socialist MEP, told EURACTIV in a recent interview.

“Poland is right to tie this debate to the MFF,” Larrouturou added in a phone interview today. “They are asking the right questions about the EIB and the EU budget,” he claimed, saying “it takes a real budget” to achieve the EU’s new climate ambitions.

Larrouturou is one of the architects behind a proposal to transform the EIB into a climate bank, saying over €1 trillion worth of private and public financing will be needed every year to finance the transition to a climate-neutral economy by 2050.

“€1,100 billion per year for thirty years is a colossal sum of money. But yes, it can be found,” Larrouturou said, pointing out that €240 billion of fresh money will become available when the European Central Bank starts its new quantitative easing programme in November.

“If Poland receives funding to insulate buildings, create jobs in public transport and agriculture, then they will support the transition,” the French MEP said, pointing out that the question of climate funding “is the same in all European countries”, which are all struggling to finance the energy transition.

Larrouturou also called for stricter rules to make sure public and private banks clean up their balance sheets from fossil fuel assets and redirect investments into renewable energies.

[Edited by Zoran Radosavljevic]

MEP Larrouturou: ‘Entire S&D group wants guarantees on financing European Green Deal’ Incoming EU Commission chief Ursula von der Leyen should take an extra month or two to negotiate a coalition agreement with the European Parliament, including a new finance-climate pact to support the energy transition, says Pierre Larrouturou, adding he will not vote for the new Commission without additional climate cash.