Mainstreaming and expenditure tracking

The European Commission pursues several policy objectives through the EU budget. Such objectives stem from:

  • Commission policies
  • political priorities
  • international agreements

Some of these are pursued through one or more dedicated budgetary programmes, for examples the common agricultural policy, student exchanges, or research.

The Commission has also decided to mainstream other policy objectives. This means that policies such as climate, biodiversity and gender are considered in the design, preparation, implementation and evaluation of each programme. Instead of having a single dedicated programme, these priorities will be integrated into the design of all its spending policies horizontally.

Often, the Commission is required to provide an answer to the question of how much money it is spending on specific policy objectives. While that question is easy to answer for dedicated programmes, it is more complex for policy priorities or for priorities to which more than one programme is contributing. Finding and calculating the relevant spending is called expenditure tracking.

Currently, the Commission is tracking expenditure linked to

  • climate
  • biodiversity
  • gender equality
  • clean air
  • migration

For the Sustainable Development Goals (SDGs), the Commission provides information in the framework of the Draft Budget.

The implementation of mainstreaming in budgetary policies automatically implies double counting of expenditure. This is not an error but a feature of mainstreaming. A Euro spent through the common agricultural policy to provide support to farmers planting hedges and tree rows in their fields helps agriculture, biodiversity and climate. This should be reflected in the amount from the EU budget spent on each topic.

Contributing to multiple priorities at the same time is inherent to the idea of meaningful and well-designed mainstreaming. Such overlap demonstrates the efficiency of EU budgetary spending where resources contribute to a number of political objectives at the same time. That means however, that expenditures on horizontal priorities cannot simply be added up.

Green methodology

A comprehensive methodology is the first step towards proper tracking. Without it, programmes cannot properly report on their contributions.

The methodology for climate, biodiversity and clean air is based on the EU Climate coefficients. These are coefficients to track and report on the development finance flows, based on the Organisation for Economic Co-operation and Development (OECD) Rio markers that were designed in 1998 to target the themes of the Rio Conventions. The EU coefficients are designed to quantify expenditure contributing to climate, biodiversity and clean air objectives.

Given the range of implementing procedures (e.g. centrally managed funds, shared management, financial instruments, programmable actions), the approach to implementation varies across programmes and the methodology is refined to reflect the specific implementation modes. EU climate coefficients are assigned according to the following categories of criteria:

  • 100%: the activity is expected to make a substantial contribution to climate change mitigation or adaptation objectives in line with EU climate goals. A substantial contribution can be assigned to an activity that contributes to climate objectives either directly (e.g. renewable energy, zero-emission transport or nature-based solutions) or indirectly (e.g. research and innovation, education related to clean technologies or other enabling activities). For a number of activities, the “effect-based” column in Annex I provides further information on the nature of the substantial contribution.
  • 40%: the activity is expected to make a non-marginal, positive contribution to climate change mitigation or adaptation objectives. The activity’s contribution to climate objectives can again be direct or indirect.
  • 0%: the activity is expected to have a neutral impact on climate objectives.

All activities have to comply with the "do no (significant) harm" principle regardless of the applicable climate coefficient.

This methodology is independently applied to track climate, biodiversity and clean air expenditure in a wide range of programmes. Each methodology applies the coefficient at different levels of granularity.

Climate

The EU budget makes a crucial contribution to the fight against climate change.

In the previous 2014-2020 Multiannual Financial Framework, the Commission implemented an innovative approach in order to dedicate resources to the fight against climate change: "climate mainstreaming". This requires EU programmes in all policy areas to consider climate priorities in their design, implementation, and evaluation phases.

According to the latest estimates, EUR 220.9 billion of the EU budget was dedicated to the fight against climate change, i.e. 20.60%. On that basis, the Commission confirms that the 20% target for the 2014-2020 period has been reached.

In the new context of the 2021-2027 Multiannual Financial Framework (MFF) and NextGenerationEU the Commission has further developed its approach to climate mainstreaming, including through:

  • An overall target of at least 30% for climate-relevant expenditure;
  • A "climate adjustment mechanism", allowing for action to be taken in case expenditure levels are likely to be insufficient to reach (programme-specific) climate spending targets;
  • The development of an effective climate tracking methodology to track the level of expenditure;
  • The application of the "do no harm" principle to ensure that money spent under the budget does not prevent the EU from achieving its climate and environmental goal.

For the period 2021-2027, the EU budget – including NGEU – is projected to deliver EUR 557 billion or 32% of climate spending.

Climate mainstreaming

How the EU budget contributes towards the fight against climate change.

Biodiversity

Biodiversity mainstreaming is more complex to track than climate, as it is newly established and fewer programmes have biodiversity objectives.

The Commission is already tracking biodiversity expenditure in a number of programmes on the basis of the Rio markers, but no target exists. The Interinstitutional Agreement of December 2020 sets out that the Commission, European Parliament and Council should work toward a target of 7.5% of annual spending for biodiversity objectives in 2024, and 10% in 2026 and 2027. This is in line with the statement in the Biodiversity Strategy for 2030 that biodiversity action requires at least EUR 20 billion per year stemming from ‘private and public funding at national and EU level’ of which the EU budget will be a key enabler.

For the period 2021-2027, the EU budget including NGEU – is projected to deliver EUR 112 billion or 6% of climate spending.

More information on Biodiversity financing

Biodiversity mainstreaming

How the EU budget contributes to tackling biodiversity loss and restoring ecosystems.

Gender

The Commission is fully committed to promoting gender equality. Gender equality is a core value of the EU, a fundamental right and key principle of the European Pillar of Social Rights. To underpin our commitment, the Commission has published the 2020-2025 Gender Equality Strategy in early 2020.

In line with the inter-institutional Agreement accompanying the 2021-2027 MFF, the Commission is working on the development of  a methodology to measure the contribution of the EU budget to gender equality. The methodology is applied on a pilot basis across all programmes in the context of Draft Budget 2023.

The methodology assesses the contributions of the EU funding programmes to the promotion of gender equality while acknowledging the specificities of individual programmes, including with regard to the level of granularity at which it is possible to apply the methodology. The availability of relevant data and legislative framework are also considered.

The development of the methodology has been informed by the OECD Development Assistant Committee (DAC) Gender Equality Markers. This provides a level of comparability with the Commission's tracking of contributions to climate and biodiversity and builds on existing know-how of EU institutions and stakeholders. The methodology has also been informed by discussions with and the ongoing work of EIGE on Tool No 8 for "Tracking resource allocations for gender equality in the EU Funds".

The following scores are attributed at the most granular level of intervention possible:

  • 2 – Interventions whose principal objective is to improve gender equality. Improving gender equality is the main objective of the intervention, without it the intervention would probably not be undertaken.
  • 1 – Interventions having gender equality as an important and deliberate objective but not as the main reason for the intervention.
  • 0 – Not targeted interventions, which do not contribute significantly towards gender equality.
  • 0* – Interventions, which can have an important impact on gender equality but where the actual impact is yet unclear, due to for example the absence of an assessment of the gender equality perspective in the design phase, or the absence of data allowing a more detailed assessment of the effects of the intervention.

The methodology does not include coefficients to weigh the contribution of interventions towards gender equality. The Commission will thus report on full financial envelopes under each individual score.

Sustainable Development Goals

The Commission is committed to working towards the UN's Sustainable Development Goals. The 17 SDGs cover all major policy areas, so virtually all EU policies and most of the spending programmes contribute to at least one SDG.

The Commission provides concrete examples of each programme’s contribution to the corresponding SDGs in the framework of the Draft Budget.

Sectoral tracking

The Commission is already tracking a number of other objectives:

  • COVID-19: as from May 2020, the Commission has started tracking expenditure for the programmes it manages directly. Information from the Member States on the programmes they manage will be added ex post.
  • Clean air: the Directive on National Emission Ceilings (NEC Directive 2016/2284) creates an obligation for the Commission to report every four years, starting from 2020, on “the uptake of Union funds for clean air”. A methodology has already been developed for the 2014-2020 MFF and reporting is done in the programme statements attached to the annual draft budget and the NEC Directive report.
  • Digital: in the State of the Union address of September 2020, President von der Leyen committed to spending 20% of the recovery effort on the digital transition.
  • Migration: due to the sharp increase of migration-related expenditure since 2015, the European Parliament and Council asked for more transparency on migration expenditure in the current MFF. Rio markers are assigned to expenditure in relevant programmes and a report is published yearly. See the latest Financial Report on the Migration and Refugee Crisis (2015-2020).

While continuing these practices, the development of a broad-based tracking system as described above could bring these more ad-hoc measures into a single tracking system.

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