Brussels,

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Financing the energy efficiency


The EU has multiple tools to achieve its goals. There are EU programs conceived and managed by the European Commission and its Agencies (grants, calls and tenders); Member States use the structural funds allocated by the EU (indirect funding, managed directly by them); through the intervention of the European Investment Bank, the EU has activated financial instruments aimed at achieving specific objectives.

All these tools are also employed for EU energy strategy, including energy efficiency policy..

Starting from 2021 and to face the crisis triggered by the pandemic, the EU has decided to enhance all the tools available by activating the Recovery and Resilience Facility, of which 37% has been assigned for the energy transaction, therefore including the energy efficiency policy
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​In order to achieve the ambitious goals of the European "Green Deal" strategy, and an ever-increasing level of public and private investment mix will be needed. For instance, 80% of the 200 million residential buildings in Europe were built before 2000, when energy saving standards were still largely lacking. The EU facilities are also devoted to all other measures to improve the energy efficiency.
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For the energy strategy, EU funding programmes ensure direct co-financing of investments in energy efficiency and leverage private and public investments through tailored financial instruments and project development assistance. These programmes also support research, innovation and technology development, as well as building capacity of private and public entities and addressing non-technological barriers.


​Co-financing investments


1. Recovery and Resilience Facility: €249 billion for climate action
This facility is the current main source of public funding for energy efficiency, with a focus on public buildings and residential buildings, including social housing.
From the total €672.5 billion of the Recovery and Resilience Facility, 37% should be dedicated to climate action. Based on the Recovery and Resilience Plans, submitted by EU countries, energy efficiency and building renovation are very important components in almost all plans.

2. Cohesion policy funds: €373 billion all funds together
These include the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and INTERREG. The total budget of €373 billion will be an important funding source for direct investments into energy efficiency.

3. Modernisation Fund: €14 billion
The fund was established under the Emissions Trading Scheme Directive with a volume of about €14 billion and made available to 10 lower-income EU countries to support investments in the modernisation of their energy systems and energy efficiency improvements.

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​Mobilising investment

InvestEU​ acts as a single investment support mechanism with an EU guarantee of €26.2 billion with the objective to leverage €370 billion, replacing all the existing centrally managed Financial Instruments, as well as gathering technical assistance support under the common umbrella of its Advisory Hub.

InvestEU aims to mobilise public and private financing in the form of loans, guarantees, equity or other market-based instruments for strategic investments in the support of EU internal policies, and is divided into 4 policy windows:
  • sustainable infrastructure (€ 9.9 billion)
  • research, innovation and digitisation (€ 6.6 billion)
  • SMEs (€ 6.9 billion)
  • social investment and skills (€ 2.8 billion)
Energy efficiency will be supported under all 4 windows, but mainly under sustainable infrastructure.


​Research and innovation for energy efficiency​


Horizon Europe supports research and innovation projects in technology development to increase efficiency of energy use.

Cluster 5 of Horizon Europe: this is specifically dedicated to climate, energy and mobility and includes an area focusing on energy efficiency in buildings and industry with a dedicated sum or €244 million of funding for the first 2 years.

Horizon Europe will also fund the mission aiming at achieving “100 European cities climate-neutrality by 2030, by and for citizens" which will mobilise cities investments in energy efficiency, including buildings renovation, urban infrastructure and transport.

In addition, there is the Innovation Fund, one of the world’s largest funding programmes for demonstration of innovative low-carbon technologies in the areas of energy intensive industry, renewable energy, energy storage and carbon capture and storage (CCS). The fund supports innovation that can bring on significant emission reductions, for instance by replacing high energy intensive processes and technologies with a more energy efficient alternatives.


LIFE - Clean Energy Transition sub-programme

The LIFE-Clean Energy Transition sub-programme has a total budget envelope of €1 billion and will support energy efficiency by addressing structural or organisation obstacles, setting favourable enabling framework and building capacity of public and private actors. It will continue successful funding initiatives removing market barriers and developing EU- wide best practice for energy efficiency policy implementation.

It is a continuation of H2020 energy efficiency market uptake funding previously also supported under the Intelligent Energy Europe
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