Clean energy spending accounts for a large portion of Warsaw’s four-year grant and loan program from the EU, as Poland’s grid-connected solar capacity rose from 3.99 GW at the end of 2020 to 6.3 GW four months ago, according to the International Renewable Energy Agency. Blocks should come as no surprise.
The European Union has announced a cap on funding for each member state in 2021 as it recovers from the Covid-19 pandemic.
Analysis by European economic think tank Bruegel shows that Poland has allocated the largest share of its EU pandemic recovery fund to renewable energy and clean technology.
Although the Polish government says the 13.49 billion euros ($14.2 billion) to be spent on such facilities by the end of 2026 is less than the 15.1 billion euros allocated by Italy, the latter only accounts for half of the overall spending plan presented by Rome and approved by the EU 7.9%. Clean energy and technology spending accounted for 37.5% of the budget submitted by the Warsaw Recovery and Recovery Plan (RRP).
The EU has pledged to release 723.8 billion euros of coronavirus recovery funds to member states. According to the Brussels-based Bruegel Institute, the plan includes 338 billion euros in non-repayable grants and 385.8 billion euros in EU loans, and the Netherlands submitted its final RRP at the end of last month.
With the details difficult to pin down, Bruegel took a variety of ways to assess how to break down member states’ spending plans. It references seven definitions listed by the European Commission, which include spending on renewable energy and clean technology and budgeting for sustainable transport and charging facilities.
Poland has only just passed that threshold for renewable energy and clean technology, as the European Commission requires countries to spend at least 37 percent of their budgets on a broader definition of “green transition.” Bruegel’s figures show that the €360 million Cyprus allocated to clean power and technology accounted for 28.9% of its RRP, while the Czech Republic accounted for 25.6% (€1.81 billion), Malta 22.6% (€80 million) and Bulgaria. 22.1% (1.46 billion euros).
failed to meet expectations
Sweden and Luxembourg meet the 37% green transition criteria but do not allocate any RRP funds for renewable energy and clean technology. Countries that are relatively laggards in this regard, besides Italy, are Latvia (which has allocated €80 million for such priorities, or 4.4% of its RRP), Ireland (€50 million, or 5.5%) , Spain (4.72 billion euros, accounting for only 6.8%) and Portugal (1.23 billion euros, accounting for 7.4%). Germany’s 3.32 billion euros of renewable energy and clean technology funding accounted for 11.9% of its total RRP budget, and France’s 3.68 billion euros accounted for 9%.
Sustainable transport and charging points are a big part of spending in the EU’s smallest member state, with these priorities accounting for 32.7% (€30 million) of the Luxembourg plan and 32% (110 million euros) of the Malta plan. Romania’s 8.84 billion euros allocated for sustainable transport accounted for 30% of its RRP, and Hungary’s 1.81 billion euros accounted for a quarter of its Covid-19 recovery spending.
On the other hand, the Czech budget for low-emission transport of 150 million euros accounts for only 2% of the country’s plan; this accounts for 4.5% of planned expenditures in Sweden and 7.1% in Finland. Portugal’s allocation of 970 million euros represents 5.8% of its total RRP, and Greece will spend 1.05 billion euros, the same amount in its Covid-19 recovery fund.
Germany spent 5.93 billion euros on sustainable transport, or 21.2% of its total spending. Spain will allocate 19% of the funds (€13.2 billion) for this, Italy will allocate 18.5% of cash for transportation (€35.4 billion) and France will allocate 16.6% (€6.78 billion).
profligate country
The think tank, funded mainly by EU member states and European business member states, breaks down the categories and also reveals the budgeting methods of the countries concerned. Eighteen countries applied for the highest grant amount that the European Commission estimates could be raised for them, while only two countries had available loans.
Germany asked for 2.3 billion euros more than the EU expected, France 1.5 billion euros and Austria 1 billion euros. Slovakia and Bulgaria have had to tap their respective treasury funds to cover the 300 million euro overfunding requirement, while Croatia and Romania will face a 100 million euro shortfall. Astonishingly, Latvia has only asked for 1.8 billion euros of the 2 billion euros the EU estimates it can provide to it in the form of non-reimbursable grants. Bruegel said the Netherlands had not made a final decision.
Romania has signed a line of credit of up to 15 billion euros for some of the recovery funds that must be repaid to the committee, followed by Italy, which has so far asked the committee for 122.6 billion euros of the estimated 122.8 billion euros in loans. Four other countries took a more cautious approach. Poland only applied for 12.1 billion euros of the 34.8 billion euro loan plan, Slovenia only asked for 700 million euros of the 3.2 billion euro plan, and Portugal was prepared to withdraw only 14.2 billion euros in overdrafts. 2.7 billion euros of the total.
By contrast, Greece has requested a loan worth 12.7 billion euros from the EU, which the EU estimates can only provide it with 12.4 billion euros.