The modernization fund is financed by revenues from the auctioning of emission allowances under the EU’s emissions trading system. It is designed to support ten lower-income EU countries in their transition to a climate-neutral economy. The beneficiary member states are: Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia. In 2022. Under this fund, 643.2 million euros were allocated to Poland, among other things. for the implementation of projects to build heating plants based on renewable energy sources and to improve industrial energy efficiency.
For more information, see a previous issue ofWater Matters. It is worth mentioning that the modernization fund supports investments such as renewable energy generation and use, energy efficiency, energy storage, modernization of energy networks, including district heating systems, pipelines and grids, and equitable transformation in coal-dependent regions.
Modernization fund – more support
In a further boost from the EU’s modernization fund, €2.4 billion was disbursed to 31 projects in seven beneficiary countries. These are funds for modernizing energy systems, reducing greenhouse gas emissions in the energy, industrial and transportation sectors, and improving energy efficiency. This is the largest total disbursement to date to support the green transition in Europe. The new investments help member states reduce their dependence on Russian fossil fuels, achieve their 2030 climate and energy goals, and contribute to the EU’s long-term commitment to achieve climate neutrality by 2050.
Support from the EU Modernization Fund has been invested in Romania (€1.1 billion), the Czech Republic (€1 billion), Bulgaria (€197 million), Poland (€47 million), Croatia (€88 million), Latvia (€5 million) and Lithuania (€1 million). The amounts mentioned raise the total disbursements from the modernization fund to about €7.5 billion, benefiting 10 eligible member states.
Examples of projects that have received support from the EU modernization fund
Projects that received funding include:
- Modernization of Bulgaria’s electricity distribution network to accelerate electrification of transportation, development of storage systems, and decarbonization and decentralization of energy consumption and production;
- Installation of photovoltaic and energy storage systems for public water and sewage service providers in Croatia;
- Increasing energy efficiency and energy savings in new buildings for the public sector through the ENERGov program in the Czech Republic;
- The introduction of electric vehicles and appropriate charging infrastructure in Latvia;
- Renovation of multifamily buildings in Lithuania;
- Supporting cogeneration for district heating systems in Poland;
- Increase in renewable electricity generation, district heating systems and gas infrastructure to replace coal-fired power plants in Romania.
The next deadline for beneficiary countries to submit investment projects for possible support from the modernization fund is August 15, 2023. For non-priority projects and September 12, 2023. for priority projects.