Sustainable EU funds - in depth

The transition to societies in ecological balance where people produce, consume, move around and live in a sustainable way requires enormous financial resources. Cohesion Policy funding is one source of finance.

Cohesion Policy is the European Union's sole place-based investment policy. Its financial instruments, the Structural and Cohesion Funds (EU funds), account for around one third of the EU's budget and significantly shape the region's development path.

EU funds finance infrastructure and development projects with the goal to reduce economic and social disparities between European regions. They specifically flow to central and eastern European countries which are the main beneficiaries.

Unlocked potential

EU funded projects often do not increase the quality of people's lives, nor ensure long-term social, economic and environmental benefits. The funds are not being well spent to combat climate change or protect ecosystems.

Incoherent priorities and disregard of social and environmental impacts prevent the truly beneficial use of taxpayers' money and undermine social, economic and environmental sustainability. As a result, European funding still supports projects with negative environmental impacts. Money is spent on projects that increase greenhouse gas emissions, harm eco-systems and contradict Europe's overall environmental objectives.

The EU has set out various strategies and environmental targets but the potential of EU funds to contribute to the achievement of these targets remains unlocked. EU funds are not currently helping Europe reduce greenhouse gas emissions, achieve more efficient use of energy and natural resources, or protect eco-systems and halt biodiversity loss.

Greener future spending

Central and eastern European countries, the principal beneficiaries of EU funds, are lagging behind when it comes to efficient and sustainable resource use. The potential for major energy savings in these countries is huge. Gearing EU funds in central and eastern European countries towards this one key area would not only help to mitigate the current environmental crisis, but it would also provide a major jobs boost and strengthen the competitiveness of the region's economies.

Investment is needed in various forms and measures, such as:

  • for energy and material savings
  • for biodiversity-friendly renewable energy sources
  • in sustainable energy infrastructure
  • in smart grids and energy storage technologies
  • in the refurbishment of housing stock and the promotion of passive housing
  • in eco-innovative products and processes
  • in the decarbonisation of transport, and
  • and in waste management patterns that promote the prevention, reduction and recycling of waste.

The EU's Cohesion Policy should concentrate on projects that deliver the largest environmental benefits at European level and reflect European priorities. The prioritisation of key environmental objectives, the mainstreaming of sustainability principles, climate proofing of all investments, and the earmarking of funds, are all fundamental to guarantee sufficient funding and ensure that investments lead to reductions in greenhouse gas emissions and resource use.

Future Cohesion Policy should include a stronger focus on environmental priorities, prioritising win-win opportunities for the central and eastern European regions, where the protection of the environment and the saving of resources can have social and economic benefits.