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• The European Court of Auditors has published a worrying report on the resources for the green transition in the Recovery & Resilience Facility, highlighting a lack of transparency and effectiveness.
• The audits revealed about 34.5 billion euros overestimated compared to the 37% target for the funds of the National Recovery and Resilience Plan (NRRP), following that the planned resources may not be sufficient to achieve the target.
• Additional checks in other Member States could further reduce the amount dedicated to the environment, bringing it below the target of 37%. 

Among the priorities of President Ursula von der Leyen and the future Commissioner for Economic Affairs could be that of significantly remodulating the Recovery and Resilience Facility (RRF) or the financial instrument dedicated to the economic recovery of Europe post Covid-19, seeking additional financing for the climate or, in the worst case scenario, reducing the spending target that the European Commission itself had initially defined. 

Indeed, the European Court of Auditors has made the results of an audit public and carried out on the resources allocated to the green transition. In the special report entitled ‘Green transition: the contribution of the recovery and resilience mechanism is not clear’, European controllers have verified the commitment, for each Member State, to reserve at least 37% of the total allocation of its NRRP funding for climate action measures, i.e. climate change adaptation or mitigation, including actions contributing to the climate targets by 2030. 

HOW DOES CLIMATE MONITOR WORK?

To calculate the 37% contribution to climate action, the RRF regulation provides for a climate tracking methodology, which is based on climate coefficients. To improve the accuracy of the estimates, the concept of “under measurement” was introduced, or the breakdown of investments into macro-items, to be evaluated individually in relation to the contribution made with reference to the climate. 

This methodology is an adapted version of the Rio markers introduced in 1998 by the Organization for Economic Cooperation and Development, and is common to all EU funds, including the RRF, throughout the period of 2021-2027. 

The RRF regulation includes a list of 181 fields of intervention, concerning different areas of investment, for example fixed or intangible assets, research and development, energy and transport. Each field of intervention is associated with a climate coefficient based on the expected effect of that activity on the climate. 

The coefficients can assume only three values 0% (in this case the intervention is irrelevant or neutral for the purposes of climate benefits), 40% (positive, non–marginal contribution) or 100% (substantial contribution).

The assessment made in February 2024 by the European Commission had estimated at 275 billion euros the sums allocated to the green transition, out of a total value of 648 billion euros, determining a percentage of 42.5% which is significantly higher than the target value of 37%. 

THE AUDITS OF THE COURT OF AUDITORS: CRITICALITY IN THE CLIMATE CONTRIBUTION 

The auditors of the European Court of Auditors selected a sample of operations implemented in four Member States, Greece, Croatia, Portugal and Slovakia, selecting the states on the basis of a precise risk analysis of climate-related measures.

In particular, they have verified the following 6 measures for each Member State: 

• Renewables and energy sector;
• Energy efficiency;
• Sustainable mobility;
• Industrial decarbonization;
• Sustainable use of natural resources;
• Other sectors – new industrial parks.

The outcome of the first analyses showed that 10 out of 24 measures, to which a 100% climate coefficient had been attributed, had not been divided into sub-measures. The lack of subdivision, consequently, prevented the evaluation of those investment parts that did not contribute to the green transition and that were instead counted as such (climate coefficient 100%).

The analyses of the European auditors have led to a redefinition of the value of the climate coefficient which for the measures examined, in particular railway interventions and for smart energy systems goes from 100% to 40% and for the construction of new energy-efficient buildings is even zeroed from the initial value of 40%. In addition, the controllers have highlighted that in many cases the implementation of climate interventions would even violate the principle of “Do no significant harm” (DNSH) creating environmental damage. 

As far as the economic impact is concerned, the European Court of Auditors has ruled that climate resources would be overestimated by as much as €34.5 billion. In particular, with regard to railway intervention fields, the probable estimate in excess is 13.9 billion, for intelligent energy systems the overestimation would amount to 15.3 billion while with regard to the construction of new energy-efficient buildings the sum amounts to 5.3 billion euros. 

The checks carried out on the 4 Member States would lead to revaluation of the amount actually dedicated to the climate in 240.5 billion and not 275 billion as asserted by the European Commission, therefore the percentage would drop from 42.5% (declared by the Commission) to 37% right at the limit with the target of the RRF regulation. 

THE GREEN DEAL AT RISK? 

The checks carried out by the European Auditors could have even catastrophic consequences for the “Green Deal” if they were extended to all Member States because they could go so far as to identify further investments whose positive impact on the climate has been overestimated. In this case, the actual amount dedicated to the environment would be further reduced, probably below the target value of 37% of the total amount provided for by the standard. 

Other factors that could affect the full reporting of R&RF sums for climate are delays or difficulties in carrying out various investments, as noted in Greece, Portugal and Slovakia. 

A particular reflection deserves the observation raised by the European controllers regarding the violation of the principle of “do not harm the environment”, found by analyzing some investments dedicated precisely to environmental protection. The evolution of technology today also allows alternative ways as long as prejudices are overcome and the principle of “technological neutrality” is adopted. 

Finally, the European Court of Auditors has made four recommendations to the European Commission, two of which will have to be implemented by June and December 2025, aimed at defining a more precise monitoring methodology and enhancing the performance of measures for the green transition. 

The Court’s report therefore launches an alert to the practical feasibility of the Green Deal, which will lead to deep reflection and the development of appropriate corrective actions by the future European Commission. 

Article published in Italian on Formiche