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

for the Committee on Budgets on the proposal for a 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 ETS and CBAM policies 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 ETS revision;

C.whereas 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 become the basis for a new own resource; whereas the latest Commission proposal for a new system of own resources includes the introduction of a CBAM-based own resource;

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

F.whereas Parliament has pointed on numerous occasions to the challenges of the treatment of external assigned revenues in terms of budgetary transparency and procedural accountability;

1.Considers that the rationale and the operating principles of the Temporary Decarbonisation Fund are an illustration of how the EU budget can be used to pursue the Union’s climate objects while improving the competitive position of industrial sectors which are sensitive to the carbon leakage dilemma; regrets, in this context, that the Just Transition Fund is no longer part of the Commission’s proposal on the next 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;

2.Welcomes that public revenue which is generated by the implementation of EU level legislation and by the enforcement of EU level regulation like the Carbon Border Adjustment Mechanism, is used for expenditure at EU level, albeit outside the EU own resources system;

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

4.Confirms that expenditure financed by assigned revenue is not counted against the MFF ceilings and that therefore, by default, the proposal is compatible with the current and the next MFF;

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

6.Considers that any revenues remaining after full disbursement should be reused to support the decarbonisation of energy-intensive industries; to that end, calls on the Commission 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;

7.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; based on that report, calls on the Commission to assess whether a prolongation of the programming period is necessary;

8.Reminds that 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; asks, more specifically, a detailed description and periodic documentation in the framework of the annual budget procedure and in particular in the Working Document (Part V) accompanying the draft budget, dedicated to assigned revenue;

9.Asserts that new budget lines must be introduced and approved by the Budget Authority, both on the revenue and on the expenditure side of the budget and for operational as well as administrative expenditure;

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

11.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; insist that the protective measures to prevent fraud and irregularities spelled out in Article 12 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)

Or. en

Amendment 2

Proposal for a regulation Recital 17 b (new)

Or. en

Amendment 3

Proposal for a regulation Article 3 – paragraph 4

Or. en

Amendment 4

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

Or. en

Amendment 5

Proposal for a regulation Article 4 – paragraph 3

Or. en