What changed

05.2.2024

23.1.2024

Mr Johan Van Overtveldt

BRUSSELS

Subject: Opinion in the form of a letter on Guidelines for the 2025 budgetBudget –- Section III (2023/2220(BUI))

Dear Mr Chair,

Dear Mr Van Overtveldt,

Under the procedure referred to above, the Committee on Industry, Research and Energy has been asked to submit an opinion to your committee. At its meeting of 28 November 2023, the committee decided to send the opinion in the form of a letter.

The coordinators of the Committee on the Environment, Public Health and Food Safety (ENVI) decided on 28 November 2023 that ENVI would provide an opinion on the Guidelines for the 2025 budget – Section III (2023/2220(BUI)) in the form of a letter. Therefore, as both ENVI Chair and Standing Rapporteur for the Budget, let me provide you with ENVI’s contribution in the form of resolution paragraphs, which was adopted by ENVI at its meeting of 24 January 2024 and which I kindly request will be taken into account by your committee:

The Committee on Industry, Research and Energy considered the matter at its meeting of 23 January 2024. At that meeting, it decided to call on the Committee on Budgets, as the committee responsible, to incorporate the following suggestions into its motion for a resolution.

− Emphasises that the instability and insecurity caused by Russia’s aggression against Ukraine requires not only a more united and supportive Union, but also an energy independent Union that leads the green and just transition, leaving no one behind and addressing energy poverty; notes that the serious geopolitical situation must not divert attention or slow down the efforts towards achieving the climate neutrality target set for 2050 at the latest;

– Points out that the EU’s long-term budget for 2021-2027, together with NextGenerationEU, is aimed at implementing the EU’s long-term priorities in various areas, including climate and the environment; highlights, specifically, that EUR 401 billion has been earmarked for natural resources and the environment, while 30 % of total EU expenditure is allocated to climate-related projects; welcomes, in this regard, the intention to increase funds by EUR 10 billion in the mid-term review of the 2021-2027 multiannual financial framework, especially in relation to environmental and climate priorities; supports the need for an additional EUR 1 billion under Heading 3 ‘Natural Resources and Environment’, which includes expenditure and investment related to agriculture, maritime sectors, climate, environmental protection, food security and rural development, in order to address the environmental challenge with more flexibility;

– Recalls that the green and digital transitions are two of the main objectives of NextGenerationEU and that its centrepiece – the Recovery and Resilience Facility (RRF) – is expected to guide the EU towards a more sustainable future by providing over EUR 700 billion in grants and loans to Member States; stresses the need to ensure that the RRF contributes to the mainstreaming of climate action and environmental sustainability and the achievement of the EU’s goal of climate neutrality by 2050 by supporting Member State reforms in green technologies and capabilities, including sustainable mobility, energy efficiency, renewable energy, climate change adaptation, circular economy and biodiversity; recalls that, in order to receive these funds, Member States must prepare plans that devote at least 37 % of their total expenditure to investments and reforms in support of climate objectives; calls on Parliament to exercise its oversight function over the RRF by assessing that national plans are in line with climate and environmental objectives;

– Underlines that the Union’s budget for 2025 should be aligned with the European Climate Law’s ambition of making the EU the first climate-neutral continent by 2050 and the Paris Agreement’s goal of keeping the global average temperature increase below 2°C compared to pre-industrial times;

– Welcomes the commitment of the Commission, Parliament and the Council to strengthen the EU budget’s contribution to the fight against climate change, as agreed in the Interinstitutional Agreement in December 2020; emphasises the need to secure essential resources for climate and biodiversity mainstreaming, which ensures that all European programmes in any field take climate and biodiversity priorities into account in their design, implementation and evaluation; recalls the importance of reaching the climate spending target of 32.6 % of the EU budget of EUR 578 billion; underlines the importance of ensuring the functioning of the Carbon Border Adjustment Mechanism, which will allow the Commission to take compensatory action to close any gaps in achieving the overall climate spending target for the EU budget;

– Points out, with regard to biodiversity mainstreaming, the need to tackle biodiversity loss and restore ecosystems through significant investment and the achievement of the target of allocating at least 7.5 % of annual expenditure to biodiversity targets in 2024 and 10 % in both 2026 and 2027; underlines that further efforts must be made within the 2025 Union budget to ensure that the biodiversity spending targets set for the years 2026 and 2027 are met; stresses that the EU budget must be a key factor in the implementation of the 2030 Biodiversity Strategy, according to which biodiversity action requires at least EUR 20 billion per year from ‘public and private funding at national and EU level’;

– Insists on the need to transparently monitor climate and biodiversity-related expenditures through reliable and comprehensive reporting in budget documents and on the performance website, and emphasises the need for sufficient ex post evaluations with a focus on impact; calls for the methodology for climate spending to differentiate between climate mitigation and adaptation where feasible; expects and stresses the need for the Commission to deliver a comprehensive and effect-based methodology based on EU climate coefficients and to provide annual reporting on past and future expenditures for all seven years of the MFF to ensure meaningful and well-designed climate and biodiversity mainstreaming; underlines the importance of avoiding misleading approximation of the spending contribution to climate and biodiversity objectives, including lack of explicit targets; urges the Commission to check the quality of expenditure at programme level; reminds the Commission to publish the mid-term review after consulting Parliament and stakeholders and to present a related proposal if the targets are not met;

– Calls for the commitment to the ‘do no (significant) harm’ (DNH) principle to be respected in every EU budgetary programme; stresses the need to practice the DNH principle by restricting expenditure with potentially negative climate and environmental impacts; further stresses that compliance with the principle should be ensured throughout the budget and that necessary corrective measures should be taken, without undue delay;

– Calls on the co-legislators to swiftly conclude the outstanding legislative dossiers in the ‘Fit for 55’ package and further emphasises the need to implement this legislation in order to achieve the intermediate target of a 55 % reduction in greenhouse gas emissions by 2030; calls on the Commission and the Member States to ensure the swift and effective implementation of new rules and reforms;

– Recalls the need to ensure that one third of the EUR 1.8 trillion investment from the NextGenerationEU recovery plan and the EU’s seven-year budget will finance the European Green Deal and related initiatives; highlights, in this regard, the need to allocate sufficient human and financial resources for the implementation of the EU Climate Law, the EU Strategy on Adaptation to Climate Change, the EU Biodiversity Strategy for 2030, the Farm to Fork Strategy, the European Industrial Strategy, the Circular Economy Action Plan, the Batteries and Waste Batteries Regulation, the EU Chemicals Strategy for Sustainability, the EU Forest Strategy for 2030 and the Nature Restoration Law, and to guarantee clean, affordable and secure energy;

– Stresses the need to show a more ambitious increase in the allocation of funds for each programme, such as LIFE, to finance climate and environment-related projects as well as the Just Transition Fund to help the most vulnerable carbon-intensive regions facing the economic and social costs of the climate transition; calls for the ‘greening’ of all other relevant programmes and funds, including a proactive integration of climate and biodiversity finance into programming activities;

– Emphasises the need for better prevention and preparedness through the implementation of climate adaptation measures to enable the Union to prevent and respond to emergencies such as the recent floods, fires, droughts and other unforeseen events; stresses the continued importance of ensuring adequate funding of the Union’s civil protection mechanism;

– Recalls that the Commission is responsible for making sure that all EU countries properly apply EU law and thus urges the Commission to ensure that there is sufficient funding and staff capacity to monitor the implementation;

– Underlines the importance of allocating sufficient financial and human resources to the European agencies under ENVI’s remit, such as the European Environment Agency (EEA), the European Chemicals Agency (ECHA), the European Food Safety Authority (EFSA), the European Centre for Disease Prevention and Control (ECDC) and the European Medicines Agency (EMA), to ensure that they can play their key role in European policymaking in response to the crises facing the EU;

– Stresses the importance of prevention and of being better prepared to combat future health threats; stresses the need to ensure the continued availability and affordability of medicines to preserve the health and wellbeing of citizens; highlights the EU’s current dependency on active pharmaceutical ingredients (APIs) and chemical raw materials imported from non-EU countries and further stresses the need to achieve a more independent and open strategic autonomy in the pharmaceutical supply chain;

– Further stresses the importance of strengthening the sustainability and resilience of health systems while reducing disparities in equal and equitable access to healthcare and medicine; stresses that health-related expenditure should follow the ‘One Health’ and ‘Health in all policies’ approaches; highlights the absence of and need to establish a common global vision on the ‘One Health’ approach and pandemic preparedness; recalls the danger of shortages of essential medicines and calls for immediate measures to be taken to ensure continued supply and the availability and affordability of the most critical medicines and components;

– Reiterates its concern that over 50 % of the EU4Health budget was allocated for operational expenditures of the Commission’s European Health Emergency Preparedness and Response Authority (DG HERA) and stresses the importance of allocating adequate funding for the activities under the EU4Health programme, including sufficient support for the implementation of the European Health Data Space;

– Underlines, in this regard, that many epidemics are linked to the rise of infectious diseases and that the Union’s efforts to combat antimicrobial resistance should be significantly increased; further stresses the need for stronger cooperation with international partners with regards to reaching a global agreement on the use of and access to antimicrobials;

– Highlights the need to continue the EU’s fight against cancer by ensuring the implementation of Europe’s Beating Cancer Plan through adequate funding; welcomes the use of funds from the EU4Health programme and other EU instruments that will provide substantial financial support of EUR 4 billion to Member States in their efforts to make their health systems more robust and capable of tackling cancer;

– Emphasises the importance of an enhanced EU own resources system capable of meeting the challenges and contributing to the Union’s health, environment and climate goals, and to NextGenerationEU’s debt recovery; recalls that the EU budget is complementary to Member States’ national budgets and allows the EU to maintain and even strengthen its role as a global player in tackling today’s challenges;

I have sent a similar letter to Mr Victor Negrescu, general rapporteur for the 2025 budget.

Yours sincerely,

Pascal Canfin

CristianSilviu Buşoi Christian Ehler

ANNEX: entities or persons

Chair Rapporteur

from whom the rapporteur for the OPINION has received input

SUGGESTIONS

The Chair in his capacity as rapporteur for the opinion declares under his exclusive responsibility that he did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.

1. Recalls that the Union Budget for 2025 must reflect the political priorities of the new legislative term, which should focus on fully implementing the programmes agreed in the current MFF and on implementing the ambitious climate neutrality and digital objectives within these programmes; rejects the notion that new challenges or unexpectedly high interest payments can be funded by cutting existing flagship programmes like Horizon Europe, Digital Europe Programme and the European Defence Fund;

2. Stresses that sufficient additional EU funding is needed to deliver on the objectives set by new EU legislation in support of the energy and environmental and the digital transitions, in particular the Strategic Technologies for Europe Platform (STEP), which shall provide funding to support the Net Zero Industry Act and the Critical Raw Materials Act, and ensuring the successful implementation of the European Green Deal’s Fit for 55 legislative packages, on electricity market design and renewable and natural gas and hydrogen markets; insists that EU initiatives like the New European Bauhaus, Secure Connectivity, the European Chips Act and the Hydrogen Bank, should be allocated additional budget, in order to secure their continuity and increase their level of ambition; underlines specifically the agreed targets under the Renewable Energy Directive and the Energy Performance of Buildings Directive, which need to be supported by national and EU funding including the Connecting Europe Facility, the Recovery and Resilience Facility, as well as the Social Climate Fund;

3. Insists that the Union budget for 2025 must continue addressing the consequences of Russia’s war of aggression, by providing direct support and cooperation programmes for Ukraine, and more generally by strengthening the Union’s open strategic autonomy, energy independence, competitiveness with a specific focus on SMEs, midcaps and start-ups, digital transition, cyber security and defence capabilities;

4. Reminds of the need to strengthen the resilience of the EU economy and the competitiveness of Union industries, with future EU industrial policies contributing at achieving social and green objectives; believes therefore that the Union Budget for 2025 should invest strongly in industrial competitiveness, creating pathways towards decarbonisation of industrial sectors, while securing EU supply chains for a range of strategic sectors and technologies; considers that technological autonomy, sustainable growth and quality job creation are key to reaching the Union’s long term energy and climate objectives; notes with concern the impact of the energy crisis on energy intensive industries and related sectors; in this context, calls on the Commission to provide recommendations on the request and swift approval of State Aid; reiterates the call to maintain visible, dedicated funding to SMEs mid-caps and start-up programmes, in order to confirm the European Union’s commitment to support their role in promoting innovation, sustainable and inclusive growth, employment, and social cohesion; stresses that green and social investments are needed at EU and at national level to achieve a socially just green transition;

5. Recalls that the 2025 budget for Horizon Europe will be the first annual budget under the Second Strategic Plan for Horizon Europe; emphasises that Horizon funding should be sufficient to deliver on the short term objectives for 2030, while also maintaining sufficient investment in early research to ensure Europe has the knowledge base it needs for the challenges of 2040 and 2050; regrets that the existing level of Horizon Europe funding is insufficient to develop the ideas and technologies necessary for the green and digital transitions, or to deliver on the goals of sustainable growth and open strategic autonomy; calls for an increase in the 2025 budget for Horizon Europe, allowing each sub-programme to fund at least 50% of all “excellent” proposals, whereas currently over 70% of such proposals are rejected due to insufficiency of funds; supports continued investments in Horizon Europe strategic initiatives such as the New European Bauhaus; insists that all available decommitments under Article 15 (3) of the Financial Regulation should be used;

6. Underlines that security of energy supply concerns, high energy prices, and the ongoing EU transition to climate neutrality mean that the issue of energy poverty will be a crucial one in the months and years to come; stresses that alleviation of energy poverty requires European and national investments;

7. Calls for adequate funding and staffing for all agencies and Union bodies in the policy areas of industry, research, energy and cybersecurity, in order to cope with increased workload and new regulatory obligations.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

The rapporteur declares under his exclusive responsibility that he did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.