EU funding possibilities in the energy sector

Cohesion Fund

The EU’s Cohesion Fund aims to reduce economic and social disparity between EU countries and promote sustainable development.

The fund supports energy-related projects that benefit the environment for example by reducing greenhouse gas emissions, increasing the use of renewable energy or improving energy efficiency.

Part of the Cohesion Fund is used to implement the energy union strategy with the help of the Energy and Managing Authorities Network (EMA).

Connecting Europe Facility 

The Connecting Europe Facility (CEF) is the EU's funding instrument for boosting energy, transport, and digital infrastructure.

In 2018, the CEF was renewed for 2021-2027 with a budget of €42.3 billion to support investments in EU infrastructure networks for energy (€8.7 billion), transport (€30.6 billion) and digital (€3 billion). This represents a 47% increase compared to 2014-2020, see “EU Budget for the future” CEF factsheet for further information.

Every 2 years the European Commission draws up a list of EU projects of common interest (PCIs) which may apply for CEF funding.

The first CEF Energy PCI call for proposal was launched on 7 September 2021, making €785 million available to finance clean energy infrastructure projects.

Recovery and Resilience Facility

The Recovery and Resilience Facility (RRF) is the key instrument at the heart of NextGenerationEU, the EU's plan for emerging stronger from the COVID-19 pandemic. It is structured around 6 pillars: green transition; digital transformation; economic cohesion, productivity and competitiveness; social and territorial cohesion; health, economic, social and institutional resilience; policies for the next generation. The RRF will help the EU achieve its target of climate neutrality by 2050.

Horizon 2020 and Horizon Europe

Around €5.8 billion will be invested in energy research and innovation projects in the EU's Horizon Europe programme 2021-2022. These projects aim at the creation and improvement of clean energy technologies, such as smart energy networks, tidal power and energy storage. 

The European Climate, Infrastructure and Environment Executive Agency (CINEA) is running parts of Horizon 2020 and Horizon Europe in the areas of transport and energy, as well as innovation of energy efficient technologies and solutions for buildings, heating and cooling and more.

Apply for Horizon Europe funding

LIFE: Clean Energy Transition

A new sub-programme of the LIFE Programme will be dedicated to clean energy transition. It will offer support to deliver on sustainable energy-related polices that contribute to reach the European Green Deal objectives.

With a budget close to € 1 billion for the period 2021-2027, the sub-programme aims to facilitate the transition towards an energy efficient, renewable energy based and resilient economy by funding coordination and support actions across Europe. It is managed by CINEA.

European Regional Development Fund 

The European Regional Development Fund (ERDF) aims to reduce economic and social disparity between the EU's regions.

One of the ERDF's four priority areas for 2014-2020 is 'the low carbon economy'. A minimum percentage of ERDF funding must be channelled towards low carbon projects in regions: 20% for more developed regions,15% for transition regions and 12% for less developed regions.

European Investment Bank and the European Fund for Strategic Investments

The European Investment Bank (EIB) helps finance energy projects by providing companies with loans and other financial instruments. The EIB, together with the European Commission, launched the European Investment Advisory Hub as part of the Investment Plan for Europe. The hub acts as a single access point that provides advice and expertise on administration and project development across the EU.

In November 2019, the EIB adopted a new and more ambitious energy lending policy that aims to phase out traditional fossil fuel energy projects by 2021.

The European Fund for Strategic Investments (EFSI) is a joint initiative between the EIB Group (the EIB and the European Investment Fund) and the Commission. It aims to mobilise private investment in projects which are strategically important for the EU, including the areas of energy efficiency, renewable energy, power grids and interconnectors – all essential to speed up the decarbonisation of the EU economy.

Just Transition Mechanism

The Just Transition Mechanism is a financial tool that provide tailored support to the most vulnerable and coal-intensive regions in the transition to a greener economy. Over the period 2021-2027, it will mobilise at least €150 billion of investments to alleviate the socio-economic impact. The mechanism consists of three pillars

  • a Just Transition Fund of €40 billion to primarily provide grants
  • a dedicated scheme under InvestEU to crowd in private investments
  • a public sector loan facility with the EIB Group to mobilise additional investments and leverage public financing

Financing Energy Efficiency

To meet the energy union objectives and support the transition to a clean energy system, there is a need to further unlock private financing, in particular for energy efficiency investments. Therefore, the EU provides support schemes and various initiatives to accelerate energy efficiency investments, but private investments are also needed.

More about financing energy efficiency. 

The Innovation Fund 

The Innovation Fund, which is the successor of the NER 300 programme, is one of the largest funding programmes in the world that is dedicated to the demonstration of innovative low-carbon technologies. 

The fund focuses on technologies and big flagship projects that can bring significant emissions reductions, including innovative low-carbon technologies and processes in energy-intensive industries, carbon capture and utilisation, carbon capture and storage, renewable energy generation and energy storage.

The Innovation Fund is managed by the European Climate, Infrastructure and Environment Executive Agency (CINEA), and there will be regular calls for proposals in the lifetime of the fund.

European Energy Programme for Recovery

Launched in 2009 in order to support key investments in the context of the economic crisis and in order to promote energy transition, the  €3.98 billion European Energy Programme for Recovery (EEPR) finance aimed to fund 44 gas and electricity infrastructure projects, 9 offshore wind projects and 6 carbon capture and storage projects.

After 7 years of implementation, EEPR achieved good results in 2018. 35 projects out of 44 in gas and electricity infrastructure projects were completed; 4 out of 9 in the offshore wind projects are operational, but only 1 in the carbon capture and storage projects. The EEPR website was archived in 2019.

The Commission continues to monitor closely the on-going remaining projects. Lessons learned from EEPR were used in the preparation and the implementation of the projects of common interest (PCI).

Under the EEPR, the Commission also launched the European Energy Efficiency Fund (EEE-F) which aims at promoting a sustainable energy market and climate protection.