EU to give 20 billion euros extra aid for renewable energy; Belgium to get 282 million

The Finance ministers of the European Union reached this Tuesday 4 October in Luxembourg a pre-agreement on the financing and distribution of 20 billion euros of additional subsidies to the Recovery and Resilience Facility (RRF). The aim is to promote a gradual exit of EU imports of Russian fossil fuels. Belgium could count on 282 million euros.

The €20 billion is part of a wider Commission plan to raise up to €300 billion in loans and grants "RePowerEU", to boost investment in renewable energy in response to soaring energy prices in the EU, fueled by the Russian war in Ukraine.

A large part of the amount, more than 225 billion, would be recycled from unsolicited loans from the EU's post-covid recovery fund, according to the Commission's proposal. However, several member states are still considering whether to apply for these loans as part of the recovery and not RePowerEU, according to the Czech minister Zbyniek Stanjura, who chaired the meeting.

"Today we have taken an important step in strengthening Europe's autonomy from Russian fossil fuels," said Stanjura.

"This will help strengthen the Union's energy security and respond to high energy prices, investing quickly where it matters most," added European Commissioner Valdis Dombrovksis.

For the big European fundraisers, the funds must be taken 75% from the EU innovation fund and 25% from the advance sale of CO2 emission rights to industry, concentrating them at the start of the period. The Commission had for its part recommended drawing these 20 billion euros exclusively from the auctioning of CO2 allowances currently held in a market stability reserve.

"The Council's objective is not to disrupt the functioning of the EU emissions trading scheme while ensuring a credible revenue stream."

Belgian "envelope"

With a distribution key reserving 1.41% of the envelope, Belgium could count on 282.139 million euros. 

The Belgian minister of Finance, Vincent Van Peteghem, was not satisfied with a first proposal last May taking up the criteria for the distribution of the Recovery and Resilience Facility (FRR) of the major post-covid recovery plan of the EU, which would have been unfavorable to Belgium. Other countries have made their case. In the end, the distribution key was modified taking into account the cohesion policy, the dependence of Member States on fossil fuels and the increase in investment prices.

The final result for Belgium is better than the original proposal, even if it is "a little worse" than what could have been hoped for in recent days, Belgian sources said to Belga News Agency. The will was to send the signal that we had to move forward.

The Council will still have to negotiate with the European Parliament the pre-agreement reached this Tuesday at 27. It is expected that the Parliament will not contest the distribution key on which the States have agreed, but it could find fault with the sources of financing of the 20 billion.

(VIV)

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© BELGA PHOTO (Michal Cizek / AFP) Slovenian Minister of Finance Klemen Bostjancic (back L) talks with Belgian Finance Minister Vincent Van Peteghem after posing for a family photo at the EU Informal Meeting of Economic and Financial Affairs Ministers and Central Bank Governors in Prague, Czech Republic on September 9, 2022.