EC to vote on redirecting economic recovery funds to energy efficiency and renewables

This Thursday the Industry Committee of the European Commission will vote on plans to use unspent funds from the EU's economic recovery programme to fund energy efficiency and renewables projects.

The vote is expected to pave the way for millions of more euros of funding to be made available for green development among European countries.

The Committee is responsible for the EU's industrial policy and the application of new technologies, including measures relating to small businesses. It also formulates EC measures relating to energy policy in general, the security of energy supply and energy efficiency, including the establishment and development of trans-European networks in the energy infrastructure sector.

The economic recovery programme was set up in May 2010 in response to the Eurozone crisis, allocating cash for job creation through EU structural funding.
The precise amount available for redirection into energy efficiency and renewables is uncertain, but the economic recovery programme set a ceiling of €50 million for each major project.

The money is likely to be made available through the European Regional Development Fund (ERDF) and the Cohesion Fund. The Commission has strongly encouraged Member States to make use of the available ERDF allocation - up to 4 per cent of their national annual total - for energy efficiency and renewables in existing housing stock. However, the EC reckons that the allocation of funds to specific projects in energy efficiency priorities is low in most Member States.

At the end of May the Commission adopted an amendment to the EU programme to aid economic recovery by granting EU financial assistance to energy projects. The proposal provides for the creation of a dedicated financial instrument of up to €114 million to support energy efficiency and renewable energy projects. This financial vehicle would be addressed to regional and local authorities.