Changes from plenary report to adopted text

147. Recalls that the 2020 Interinstitutional Agreement established a binding 30 % target for climate spending, but only an annual ‘ambition’ of 7,5 % in 2025 and 10 % in 2026 and 2027 for biodiversity spending; notes that the Commission tracks Union spending on climate and biodiversity-related activities by means of dedicated methodologies; stresses that the climate and biodiversity tracking methodologies are ex-ante tagging systems based on the expected effect of activities and do not factor in results; recalls that the mainstreaming of priorities in the Union budget entails the consideration of that priority in all stages of the budgetary cycle; underlines, therefore, that the tracking of spending related to climate or biodiversity objectives is only one step in a comprehensive green budgeting cycle, in which climate and biodiversity objectives are considered throughout the whole lifecycle of the budget;

148. Notes that applying its climate and biodiversity tracking methodologies, the Commission calculates that the Union is on track to meet its 30 % climate spending target for 2021-2027 and its biodiversity spending ambition of 7,5 % for 2025; regrets that it is not on track to meet its biodiversity spending ambition of 10 % for 2026 and 2027; notes, furthermore, that there is an average annual financing gap of EUR 21,4 billion to achieve Union biodiversity goals; underlines that increased budgetary allocations must be accompanied by improved effectiveness, better monitoring of biodiversity outcomes, while making sure that these changes to do not create disproportionate administrative burdens for farmers and local authorities;

149. Is concerned that in several audits, the Court found that Union funds’ contribution to climate objectives was unclear and potentially overestimated due to weaknesses in the Commission tracking methodologies; recalls that in its special report 09/2022 on climate spending in the 2014-2020 Union budget, the Court found that the climate contribution of the Union budget had been overstated by EUR 72 billion under the 2014-2020 MFF, as reported spending was not always relevant to climate action, including under the CAP; is aware that in response to above special report the Commission commissioned a study with a view to establishing a more scientific approach to quantify the CAP climate contribution and considers that the study should be made public; looks forward to receiving the Court’s assessment of the Commission’s follow-up of its recommendations made in special report 09/2022 in 2026;

150. Notes the Commission’s written reply that from 2021 to 2023, agricultural greenhouse gas emissions in the Union decreased by 3 %, while those for energy supply and industry decreased by 16 %; considers all policy areas and activities must contribute fairly to reducing emissions; notes the Court’s Special Report 20/2024 on Common Agriculture Policy Plans and the Commission’s reply; in particular, notes the Court’s assessment that the CAP Strategic Plans 2023-2027 represent an improvement compared to the previous programming period, including with regard to climate and environment considerations, though the monitoring and performance framework could be further strengthened; welcomes that the Court also recommends the Commission to estimate the CAP’s contribution to the Green Deal targets and strengthen the future CAP monitoring framework with a view to improving its contribution to the Union's climate and environmental objectives; considers that improvements to the monitoring and performance framework should not result in additional administrative burden for farmers or managing authorities;

151. Notes the Court’s special report 14/2024 ‘Green transition – Unclear contribution from the Recovery and Resilience Facility’ and the Commission’s reply; takes notes of Court’s findings highlighting weaknesses and limitations in the design and implementation of the RRF as regards the measurement of its contribution to climate and environmental objectives; notes that the Court found that tracking climate expenditure involves a high level of approximation and some coefficients were leading to potential overestimations; welcomes that the Court recommends that the Commission further refine methodologies for estimating climate spending in future funding instruments and to incorporate the lessons in the design of future funding instruments supporting the climate and environmental objectives and targets;

152. Notes the Court’s Special report 15/2024 on climate adaptation in the Union and the Commission’s reply; appreciates the Court’s conclusion that the overall Union framework for adaptation policy was sound; is concerned by the finding that Member States sometimes used outdated scientific data for their national adaptation strategy documents and that the Member States’ reporting on climate adaptation was insufficient and added little value in terms of tracking progress; is disappointed by the Court’s findings that a third of the sampled projects had little or no impact on increasing adaptive capacity and that there is a risk that two projects (out of 36) might result in maladaptation; welcomes that the Court also recommends that the Commission improve reporting on climate adaptation through common indicators to measure progress and follow up on the weaknesses identified;

153. Recalls that all Union spending must comply with the horizontal ‘do no significant harm’ (DNSH) principle, laid down in point 16 of the Interinstitutional Agreement, which stipulates that Union spending must not cause harm to the six environmental objectives set out in Article 17 of the Taxonomy Regulation, namely climate mitigation and adaptation, sustainable use and protection of water resources, the circular economy, pollution prevention and control, and biodiversity protection; considers that, in light of the Court’s recurrent findings, the negative environmental effects of Union spending should also be tracked and reported on;

154. Recalls that EU Emissions Trading System (EU ETS) is a key component of the European Green Deal and one of the main instruments for achieving the Union’s climate ambition; welcomes that according to the Directorate-General for Climate Action’s (DG CLIMA) 2024 AAR, the EU ETS generated EUR 43,6 billion of revenue for climate-action investments in the previous year, out of which EUR 7,4 billion was supplied to the ETS Innovation Fund and the Modernisation Fund and EUR 2,8 billion was supplied to the RRF, which Member States use to advance the clean energy transition and boost energy security; notes the finding of 2024 IAS audit on the implementation and monitoring of the EU ETS that despite the heavy workload, complex legal framework and scarce resources they operate with, the DG CLIMA staff showed commitment to perform their tasks and willingness to improve the efficiency of the EU ETS related processes; appreciates the Commission’s written confirmation that DG CLIMA intends to address most internal audit recommendations by 2025 and all by mid-2028;

155. Recalls that since 2010, DG CLIMA has issued a reservation in all of its AARs on reputational, legal and/or financial grounds related to security weaknesses identified in the Union Registry for the EU ETS, which was maintained in the AAR 2024; deplores the fact that the underlying weaknesses have not been addressed since 2010; is alarmed by the Commission’s written clarification that the level of risk is closely linked to the value of the assets handled by the EU ETS, which have increased tenfold since 2017, and is also further aggravated by the deteriorating geopolitical context; underlines, that while the financial impact of the reservation for 2024 cannot be quantified, at the time of DG CLIMA’s AAR 2024 the Union Registry held allowances in the value of over EUR 200 billion at current prices;

156. Notes with concern the Commission’s written reply that the evolution of the risk landscape has systematically outpaced the speed by which the Commission was able to improve security measures; understands that in the Commission’s assessment the security risk identified in the Union Registry for the EU ETS can only be resolved with an increased level of spending and, ultimately, by externalising the Union Registry; is appalled that the proposal to address the security weaknesses of the Union Registry is stalled primarily by the non-availability of appropriate human and financial resources; notes with concern the Commission’s written reply that those resources should come from the introduction of fees per services to the Member States to finance the operation of the EU ETS, but as a suitable legal basis for the introduction of a service fee needs to be first proposed in the ETS Directive, the Commission considers that a solution cannot be found before 2028; considers it imperative that appropriate resources be made available without delay to address the major financial, legal and reputational risks to the Union that the security weaknesses of the Union Registry entail;

157. Recalls that democracy and pluralism are fundamental values of the Union enshrined in Article 2 TEU; further recalls that, in line with Article 11 TEU, Union institutions shall provide citizens and representative associations the opportunity to make known and publicly exchange their views in all areas of Union action in order to maintain an open, transparent and regular dialogue;

158. Recognises the importance of the LIFE programme, the Union’s only standalone programme for the environment and climate action, in supporting nature conservation, circular economy initiatives, climate action and the clean energy transition, and more broadly in promoting sustainable development across the Union; recalls that the provisions of the LIFE Regulation, including Article 11(6), provide that operating grants may support the functioning of non-profit making entities active in the development, implementation and enforcement of Union legislation and policy; stresses, however, that such operating grants must be implemented in strict compliance with Union legal, financial and transparency requirements; stresses, furthermore, the importance of clear safeguards to ensure that Union funds are used exclusively for the objectives defined in the programme; notes that operating grants allocated to NGOs under the LIFE Programme represent approximately 1 % of the programme’s total budget; calls on the Commission to ensure robust monitoring, full accountability and transparency in the use of the Union funds, including advocacy activities;

159. Takes note of concerns raised by certain MEPs regarding the use of LIFE operating and action grants by certain beneficiaries, such as civil society organisations and companies; stresses the importance of full transparency with regard to both beneficiaries and the activities financed, continued monitoring and, where necessary, further clarification of the safeguards in place to ensure that Union funds are used exclusively for the objectives defined in the programme;

160. Notes that a review of funding contracts under the discharge procedure indicates that activities related to influencing public policy or decision-making may occur across different categories of beneficiaries, including NGOs; expresses its concern that, in some cases, companies receiving Union funding for such activities may simultaneously have Union decision-makers sitting on their boards and receiving remuneration; stresses that safeguards must ensure that any potential conflicts of interest are prevented and that Union funds are managed transparently, independently of the type of beneficiary; highlights the need to ensure consistent oversight and verification across all beneficiaries to guarantee compliance with the Commission’s 2024 guidance on activities supporting the development, implementation, monitoring and enforcement of Union legislation and policy; encourages, therefore, the creation of a standardised review process for applications to operating grants including having at least two members of the Commission or agency staff reading and reviewing application proposals and the creation of a standardised set of rules in the selection of external experts for the evaluation board of operating grants;

Recommendations

161. Calls on the Commission to:

(i) in cooperation with Member States, make available the financial and human resources necessary to urgently resolve the remaining significant security weaknesses identified in the Union Registry of the EU ETS;

(ii) provide support to Member States to simplify eco-schemes, as recommended by the Court, without lowering their environmental ambition;

(iii) support Member States with testing and upgrading the IT systems used for producing the annual performance reports, to ensure their compliance with the applicable international information security standards;

(iv) keep the discharge authority informed about the recovery rates of agricultural expenditure under the 2023-2027 CAP, and consider the introduction of new incentives for Member States to recover funds;

(v) together with Member States, accelerate disbursements of the EAFRD and mobilise measures to increase absorption where delays persist, ensuring balanced support across all regions;

(vi) support Member States in targeting funds to high-value preventive measures (e.g. landscape management, maintenance of agricultural firebreaks, restoration of degraded soils, purchase and supply of veterinary vaccines) and promote the dissemination of best practices and effective agriculture projects across Member States;

(vii) improve the sound financial management of the current and future CAP by ensuring that direct income support is provided only to active farmers, with a specific focus on those most in need, such as family-sized and small farms, farms in areas with natural or other specific challenges, young and female farmers;

(ix) conduct financial and compliance audits of Union-funded guesthouse projects on a risk basis;

(x) closely monitor the use of Union-funded guesthouse projects beyond the project implementation period and consider extending the durability period for these kinds of projects to prevent continued misuse as well as introduce strict conflict of interests checks as a prerequisite for the allocation of Union funds to build guesthouses;

(xi) collect data from Member State authorities on the number of guesthouse projects funded by Union budget since 2021, indicating also any irregularities detected, and share this information with the discharge authority;

(xii) monitor possible conflicts of interests affecting Union funds, and ensure that conflicts of interests are actually resolved, including for Members of the European Council and ensure, in particular, that no Union funds are paid, directly or indirectly, to any beneficiaries where conflict of interest has been identified and has not been demonstrably and verifiably resolved;

(xiii) share the letter addressed to the Czech authorities to clarify the conflict of interest situation of the Prime Minister with the discharge authority and keep it fully informed of any follow-up steps, including the possible launch of an audit procedure;

(xiv) share with the discharge authority all relevant documents concerning the Commission’s follow-up of the OPEKEPE case, including the up-to-date action plan and its assessment by the Commission, under specific confidential modalities, if necessary;

(xv) draw lessons learnt from the OPEKEPE case, strengthen the control system of the Union agricultural funds, reinforce the Commission’s control activities accordingly and report back to the discharge authority on the measures taken;

(xvi) improve its methodology used to track Union spending on climate and biodiversity-related activities of 2021-2027 MFF, including by addressing the relevant recommendations made in the Court’s special reports as well as improving the monitoring and reporting of actual results of investments and negative effects of Union spending on environment and biodiversity objectives;

(xvii) ensure that climate and environmental considerations are taken into account in the next MFF;

(xx) ensure strict compliance with Article 61 of the Financial Regulation by effectively preventing, identifying and managing conflicts of interest when concluding grant agreements in particular with beneficiaries that employ or remunerate Union decision-makers;

(xxi) ensure that all grant agreements, including operating grants, respect the necessary requirements related to transparency, traceability and visibility of funds;

(xxii) incorporate in its checks and systems a risk-based verification of recipients’ compliance with Union values, in order to detect potential breaches;

Migration and Border management

162. Notes that in 2024 the budget for the programmes under MFF heading 4 ‘Migration and Border Management’ was EUR 3,4 billion (1,8 % of the Union budget spending) distributed as follows: EUR 1,4 billion (40,1 %) for the Asylum, Migration and Integration Fund (AMIF), EUR 1,3 billion (37,7 %) for three decentralised agencies, the European Border and Coast Agency (FRONTEX), the European Union Agency for Asylum (EUAA) and the European Union Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice (EU- LISA); and EUR 0,8 billion (22,2 %) for the Integrated Border Management Fund (IBMF), which is composed of the Border Management and Visa Instrument (BMVI) and the Customs Control Equipment Instrument (CCEI);

163. Recalls that AMIF funding for 2014-2020 had to be spent by June 2024 and the final accounts had to be submitted by 31 December 2024; notes the Court’s finding that, at the time of their audit, a material amount of AMIF 2014-2020 funding remained to be cleared (12 % or EUR 528 million) pending acceptance of these final accounts by the Commission; acknowledges the Commission’s reply that the total expenditure declared by the Member States during the period 2014-2020, including the submission of the final accounts, amounted to 94 % of AMIF;

164. Notes that the Court examined a sample of 23 transactions, which it considered not large enough to be representative of the spending under MFF headings 4 and 5 and, thus, it cannot provide a separate estimate of the error rate for these headings; further notes that the Court’s audit results show that the expenditure under MFF headings 4 and 5 is affected by errors due to eligibility and procurement issues and the absence of supporting documents and that thus it is deemed a high-risk area (8 out of 23 transactions audited were affected by errors); is concerned that the Court detected three quantifiable errors which had a financial impact on the Union budget, seven cases of non-compliance with legal and financial provisions (which had no direct financial impact on the Union budget) and two transactions that did not comply with the principles of sound financial management due to inadequate protection of Union-funded equipment and reimbursement of value added tax to public bodies above incurred costs contrary to Commission guidance; notes that the Commission estimates that the risk at payment in 2024 is 1,3 % for the expenditure on migration and border management;

165. Welcomes the Court’s conclusion that the Commission has fully addressed two recommendations the Court made in its 2021 Annual Report and one recommendation made in its 2022 Annual Report, which relate to providing further guidance to the beneficiaries of Union action and emergency assistance and to conducting better targeted ex ante checks; appreciates the adoption of the revised control strategy for Emergency Assistance projects implemented under direct and indirect management in the Directorate-General for Migration and Home Affairs (DG HOME) in December 2024;

166. Expresses its dissatisfaction with the fact that the Court continues to experience difficulties with obtaining the documentation necessary to carry out its mandate from international organisations implementing Union-funded projects; notes with concern that some international organisations restricted the Court’s access to documents to a temporary electronic consultation in a view-only environment and the Court’s conclusion that this indicates a lack of precision in the Commission’s contractual arrangements with international organisations; notes the Commission’s reply that they consider that the existing contractual agreements with the international organisations already provide a framework to ensure document accessibility in a manner that permits the required checks; regrets the fact that the Commission has not fully accepted the Court’s recommendation to address this recurring issue, especially given that the Court’s difficulties with auditing international organisations implementing Union-funded projects have persisted since their audit of the 2018 financial year; insists that the Commission’s contractual arrangements with partners must guarantee the Court’s full audit rights, including the ability to download and retain evidence necessary for audit, review, quality control and follow-up;

167. Notes with concern that two reservations on the declaration of assurance were issued in DG HOME’s Annual Activity Report for 2024; notes that one reservation concerns the implementation of 2014-2020 AMIF and ISF programmes in several Member States due to serious deficiencies in management and control systems for these programmes detected by DG HOME; further notes that the other reservation concerns 2021-2027 AMIF, BMVI and ISF programmes in several Member States due to serious deficiencies in the management and control systems for these programmes;

168. Notes that Member States submitted their first national annual accounts for the 2021-2027 AMIF and BMVI programmes in 2024; further notes that the Court has reviewed five audit authorities’ work in relation to their annual control reports and audits of AMIF and BMVI expenditure; welcomes the Court findings that the audit authorities had developed and implemented detailed procedures of sufficient quality to report on their work in the annual control report;

169. Further notes the Court’s conclusion that the audit authorities it has reviewed had detailed audit programmes and used the checklists to support their conclusions; notes with concern that the Court has also observed some weaknesses in the audit authorities work; acknowledges the Commission’s acceptance of the Court’s recommendation to follow up the shortcomings in audit authorities’ work;

170. Expresses its concern that detailed and comprehensive data on Union home affairs spending, especially under shared management by Member States, is difficult to obtain, impeding sound oversight by the budgetary and discharge authority; calls for increased transparency in this regard;

171. Welcomes the adoption of the Pact on Migration and Asylum in 2024 and recalls that its implementation is a corner stone for the new system of migration and asylum management in the EU, which will be in application mid-2026 in all Member States; welcomes, further, the allocation of an additional EUR 2 billion to MFF heading 4 for 2024-2027 in the context of the mid-term revision of the MFF 2021-2027, also with a view to enabling the full implementation of the new rules of the Pact and addressing the growing challenges in migration and border management resulting from the current geopolitical context; stresses the importance of ensuring sufficient funding for its effective implementation, including new border procedures, and thus appreciates the Commission’s written replies that confirm that it has made available additional EUR 3 billion under the AMIF and BMVI for the years 2025–2027 to, inter alia, support Member States hosting persons fleeing the war in Ukraine;

172. Stresses that managing the Union’s external borders is a pillar of the Pact on Migration and Asylum and an essential precondition for a functioning Schengen area of free movement; recognises that EU-funded projects that support the protection of the external border serve to ease the pressure on internal border protection, as stated by the Commissioner for Budget, Anti-Fraud and Public Administration in his hearing in the Committee on Budgetary Control on 8 December 2025; acknowledges that while the overall number of migrants arriving irregularly in the Union decreased by 38 percent in 2024, patterns shifted across the continent with certain routes seeing significant increases, notably the Eastern Borders route, where a threefold increase in crossings was reported in 2024; observes that the BMVI can support frontline Member States to ensure they have the resources for infrastructure, facilities and installations necessary to secure the external borders of the Union, including electronic border security enhancements and other tools for border surveillance as provided for in annex III of the BMVI regulation;

173. Maintains that the Union needs to better protect vulnerable people from smuggling and trafficking networks, address hybrid attacks and the instrumentalisation of migration by third countries or hostile non-state actors; notes that following the adoption of the Commission Communication of 11 December 2024, the Commission has allocated approximately EUR 520 million to Member States bordering Russia and Belarus through the BMVI, in order to strengthen border management capacities and address security and migration-related challenges; highlights, in particular, the need for supporting frontline Member States for the purposes of securing the EU’s external borders;

175. Acknowledges the Commission’s ongoing efforts to strengthen meaningful cooperation with third countries of origin and transit, in particular those neighbouring the Union in view of addressing irregular migration at the source; underlines the need for adequate oversight and due diligence when allocating funds to partners involved in migration management outside the EU, in order to ensure that migration is managed in a mutually beneficial manner and in alignment with European Asylum and Migration Strategy, including on fundamental rights; urges the Commission to reinforce the transparency and accountability of Union home affairs funds in third countries;

176. Recalls that solidarity and fair responsibility-sharing, in line with the Treaties, are core principles underpinning the Union’s migration and asylum policy; acknowledges the Commission's ongoing efforts to enhance solidarity and responsibility sharing between Member States, in particular towards those most affected by migration and asylum challenges, including the instrumentalisation of migration; highlights in this context the role of the AMIF in supporting Member States in reception, asylum procedures, integration measures and resettlement, including for persons fleeing conflicts and humanitarian crises; underlines that the effective implementation of the Pact on Migration and Asylum requires sufficient, well-managed and timely funding to support solidarity measures across the Union;

177. Observes that in 2024, 37,7 % of Union funding for migration and border management was allocated to decentralised agencies in the area of migration and Home Affairs; recalls that while decentralised agencies are legally and financially independent from the Commission, the Commission retains an oversight responsibility over their activities; reiterates that migration management must be carried out in full compliance with Union law, including fundamental rights; welcomes the Commission’s written replies highlighting the need to further strengthen monitoring and accountability mechanisms, including with regard to Frontex’s activities;

Recommendations