On the proposal for a regulation of the European Parliament and of the Council establishing the Temporary Decarbonisation Fund

of the Committee on Budgets for the Committee on the Environment, Climate and Food Safety on the proposal for a regulation of the European Parliament and of the Council establishing the Temporary Decarbonisation Fund

(COM(2025)0990 – C100353/2025 – 2025/0418(COD))

The Committee on Budgets has carried out a budgetary assessment of the proposal under Rule 58 of the Rules of Procedure and has reached the following conclusions:

The Committee on Budgets,

A.whereas the proposed Temporary Decarbonisation Fund (TDF) complements the EU Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM) by providing financial support to operators in energy intensive sectors facing a remaining carbon leakage risk;

B.whereas the proposed measure is targeted, limited in volume and temporary until a more structural solution to the carbon leakage problem is devised by the upcoming revision of the ETS;

C.whereas the Member States are to transfer 25 % of their CBAM revenues to the Commission in 2028 and 2029; whereas these contributions are to be treated as external assigned revenue to fund the new budget line for the TDF;

D.whereas Parliament has repeatedly called for the CBAM to serve as the basis for a new EU own resource; whereas the latest Commission proposal for a new system of own resources includes the introduction of a new own resource based on the CBAM; whereas the Council has still not adopted the CBAM as an own resource five years after the Commission first proposed this in 2020;

E.whereas the Commission is to present a report on the implementation of the TDF to Parliament and the Council by 31 December 2030;

F.whereas on numerous occasions, Parliament has highlighted the challenges associated with the treatment of external assigned revenue in terms of budgetary transparency and procedural accountability;

1.Considers that the rationale and the operating principles of the TDF illustrate how the EU budget can be used to pursue the Union’s climate objectives, while improving the competitive position of the EU industrial sectors that are sensitive to the carbon leakage dilemma; underlines that any support mechanism must safeguard the competitiveness of EU industry and preserve a level playing field on the global market; deeply regrets, in this context, the fact that the Just Transition Fund is not included in the Commission’s proposal for the 2028-2034 multiannual financial framework (MFF), as it previously played a key role in supporting vulnerable regions and households, particularly those where energy-intensive industries are often located, in the transition towards decarbonisation; underlines the importance of ensuring that support for the transition remains targeted, efficient and consistent with the principles of sound financial management;

2.Welcomes the fact that public revenue, which is generated through the implementation of EU legislation and the enforcement of EU regulations such as the CBAM Regulation, is used to finance expenditure at EU level, albeit outside the EU own resources system;

3.Welcomes the proposed share of 25 % of CBAM proceeds to be made available by the Member States, as it is compatible with the Commission’s proposal to use 75 % of proceeds from the CBAM as own resources for the general budget, and with Parliament’s established position on own resources;

4.Suggests that a similar accompanying initiative be launched under the relevant external development instruments to further accelerate the decarbonisation of carbon-intensive industries in least developed countries, in compliance with the EU’s international commitments, in particular the Paris Agreement, and to ensure better policy coherence, in this regard;

5.Confirms that expenditure financed by external assigned revenue is not counted against MFF ceilings and that therefore, by default, the proposal is compatible with the current and 2028-2034 MFFs;

6.Recalls that one quarter of the CBAM revenue collected by Member States in this very early phase of implementation will yield only around EUR 300 million to EUR 350 million per year; recalls that this revenue is also intended to cover a modest amount of administrative support costs, which means that only around EUR 600 million will be available for calls for applications under the TDF in 2028 and 2029; estimates that these amounts might be marginally higher if the extension of the scope of the CBAM Regulation to certain downstream products will have taken effect by then;

7.Considers that any revenues remaining after full disbursement should be reused to support the decarbonisation of energy-intensive industries; calls on the Commission, in that regard, to submit, by 31 March 2030, a legislative proposal providing for the use of such revenues to grant additional support to operators in the sectors covered by this regulation, in accordance with the objectives set out in Article 1 thereof;

8.Calls on the Commission to present, by December 2028, an implementing report covering the applications received, the sectors and installations concerned, the level of demand for support, and an assessment of whether the available appropriations are sufficient to meet that demand; calls on the Commission, on the basis of that report, to assess whether a prolongation of the programming period is necessary; further calls on the Commission, in that context, to assess whether the monitoring, verification and reporting obligations provided for in the regulation are being implemented in a manner that takes account of the size, resources and administrative capacity of undertakings, in particular small and medium-sized enterprises, thereby avoiding unnecessary administrative burdens;

9.Recalls that the earmarking of revenue for particular spending purposes is to be avoided as a matter of principle; acknowledges, however, that the temporary nature and specific purpose of the TDF justifies an exception to the principle of universality of revenue; recalls that, in order to avoid the risks of a ‘shadow fund’ and the proliferation of the ‘budgetary galaxy’, assigned revenue must be subject to additional scrutiny and transparency provisions; insists, therefore, that the Commission report comprehensively and from the outset on the implementation of the fund; requests, more specifically, a detailed description and periodic documentation within the framework of the annual budgetary procedure, and in particular in the working document (Part V) accompanying the draft budget, dedicated to assigned revenue;

10.Asserts that new budget lines must be introduced and approved by the budgetary authority, both on the revenue and expenditure sides of the budget and for operational and administrative expenditure;

11.Takes note of the estimated administrative costs of approximately EUR 1 million per year, and the fact that these are to be covered by redeployment in 2026 and 2027, and by external assigned revenue once available until 2031;

12.Emphasises that the new fund, even though it is temporary and financed by external assigned revenue, is subject to legal provisions protecting the financial interests of the Union, such as the rule of law conditionality; insists that the protective measures to prevent fraud and irregularities set out in Article 12 of the proposal must not be weakened in the course of interinstitutional negotiations.

As part of its budgetary assessment, the Committee on Budgets also submits the following amendments to the proposal:

Amendment 1

Proposal for a regulation Recital 17 a (new)

Amendment 2

Proposal for a regulation Recital 17 b (new)

Amendment 3

Proposal for a regulation Article 3 – paragraph 4

Amendment 4

Proposal for a regulation Article 4 – paragraph 2 a (new)

Amendment 5

Proposal for a regulation Article 4 – paragraph 3

The rapporteur for budgetary assessment declares under her exclusive responsibility that she did not include in her budgetary assessment input from interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register, or from representatives of public authorities of third countries, including their diplomatic missions and embassies, to be listed in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.