Sittings · Document

BUDGETARY ASSESSMENT (COM(2025)0990 – C100353/2025 – 2025/0418(COD)) 2026-07-08

On the proposal for a regulation of the European Parliament and of the Council establishing the Temporary Decarbonisation Fund

Committee on Budgets · Rapporteur: Danuše Nerudová

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The Committee on Budgets gives its budgetary assessment of the proposed Temporary Decarbonisation Fund (TDF), which would support energy-intensive sectors facing carbon leakage risk using part of Member States' Carbon Border Adjustment Mechanism (CBAM) revenues. It welcomes the 25% share of CBAM proceeds to be transferred by Member States in 2028 and 2029, treated as external assigned revenue, and confirms this spending does not count against multiannual financial framework (MFF) ceilings. It asks the Commission to report on implementation by December 2028 and to propose by 31 March 2030 a legislative proposal to reuse any remaining revenues for decarbonisation support. It insists on transparency and scrutiny of assigned revenue, new budget lines approved by the budgetary authority, and protection of the EU's financial interests, including the rule of law conditionality and Article 12 anti-fraud measures.

Committee position. The Committee on Budgets gives a budgetary assessment of the proposed Temporary Decarbonisation Fund. It welcomes the 25% CBAM revenue share and confirms compatibility with the MFF, while asking for reporting, a 2030 legislative proposal on remaining revenues, and stronger transparency and anti-fraud safeguards.

Key points

  1. Considers the TDF shows how the EU budget can pursue climate objectives while improving the competitive position of carbon-leakage-sensitive EU industry, and regrets that the Just Transition Fund is not in the Commission's 2028-2034 MFF proposal.
  2. Welcomes the use of public revenue generated through EU legislation such as the CBAM Regulation to finance EU expenditure, even outside the own resources system.
  3. Welcomes the proposed 25% share of CBAM proceeds from Member States, as compatible with the Commission's proposal to use 75% as own resources and with Parliament's position.
  4. Suggests a similar accompanying initiative under external development instruments to accelerate decarbonisation in least developed countries, in line with the Paris Agreement.
  5. Confirms that expenditure financed by external assigned revenue is not counted against MFF ceilings, so the proposal is compatible with the current and 2028-2034 MFFs.
  6. Recalls that one quarter of early CBAM revenue yields around EUR 300 million to EUR 350 million per year, leaving only around EUR 600 million for TDF calls in 2028 and 2029 after administrative costs.
  7. Calls on the Commission to propose by 31 March 2030 a legislative proposal to reuse revenues remaining after full disbursement for additional support to operators in covered sectors.
  8. Calls on the Commission to present by December 2028 an implementing report on applications, sectors, demand and whether appropriations suffice, and to assess whether prolongation is needed and whether monitoring obligations avoid unnecessary burdens, especially for small and medium-sized enterprises.
  9. Accepts an exception to the principle of universality of revenue given the TDF's temporary nature, but insists on additional scrutiny and transparency, including detailed reporting in the working document (Part V) accompanying the draft budget.
  10. Asserts that new budget lines must be introduced and approved by the budgetary authority on both the revenue and expenditure sides, for operational and administrative expenditure.
  11. Takes note of estimated administrative costs of approximately EUR 1 million per year, covered by redeployment in 2026 and 2027 and by external assigned revenue until 2031.
  12. Emphasises that the fund is subject to legal provisions protecting the EU's financial interests, such as rule of law conditionality, and insists that Article 12 anti-fraud measures must not be weakened in negotiations.

Who is affected

  • Energy-intensive sectors facing carbon leakage risk, which would receive financial support from the TDF.
  • Member States, which are to transfer 25% of their CBAM revenues to the Commission in 2028 and 2029.
  • Small and medium-sized enterprises, for which monitoring and reporting obligations should avoid unnecessary administrative burdens.
  • Least developed countries, where a similar initiative under external development instruments is suggested to accelerate decarbonisation.

Figures and deadlines

  • 25% of CBAM revenues to be transferred by Member States to the Commission in 2028 and 2029.
  • Report on TDF implementation to Parliament and Council by 31 December 2030.
  • Around EUR 300 million to EUR 350 million per year from one quarter of early CBAM revenue.
  • Around EUR 600 million available for TDF calls for applications in 2028 and 2029.
  • Legislative proposal on use of remaining revenues by 31 March 2030.
  • Implementing report by December 2028.
  • Estimated administrative costs of approximately EUR 1 million per year.

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