The Commission proposes the Next Generation EU recovery instrument worth EUR 750 billion

On 27 May 2020 the European Commission proposed a recovery instrument after the COVID-19 pandemic called Next Generation EU, worth EUR 750 billion. The plan assumed EUR 500 billion in grants and EUR 250 billion in loans, and part of it was to be a strengthened multiannual EU budget for 2021–2027. The money was to go mainly to green and digital investment, which made the proposal important also for the energy, waste and agriculture sectors.

What was proposed

The package consisted of two parts: a strengthened multiannual budget and a new, temporary instrument financed from loans raised by the Commission on the capital markets. The most important element of the instrument was to be the Recovery and Resilience Facility, from which states would receive funds on the basis of national reform and investment plans. The Commission also announced an increase in the Just Transition Fund, addressed to regions dependent on fossil fuels.

The proposal assumed that a significant part of the funds would be allocated to climate goals in line with the Green Deal. This concerned, among other things, the energy efficiency of buildings, renewable energy sources, clean transport and the circular economy.

Significance for Poland

Poland was among the largest potential beneficiaries of the funds. According to the Commission's preliminary estimates of May 2020, the country could count on significant funds in both grants and loans, but the final amounts depended on an agreement between Member States and on calculations based on GDP and unemployment data. The state would have to prepare a national recovery plan and agree it with the Commission.

For biogas and biomethane investors the question was whether the Polish plan would include funds for installations processing agricultural and municipal waste and for the modernisation of gas networks.

Rules and conditions

Payments were to be linked to the implementation of reforms and investments agreed in the national plans and to the "do no significant harm" principle for the environment. This meant that projects harmful to the climate or biodiversity could not count on financing. For investments in energy and waste installations, the detailed guidelines the Commission was to present on the application of this principle were important.

What next

The proposal required the unanimity of Member States and the consent of the European Parliament. Disputes concerned the ratio of grants to loans, the distribution criteria, and the linking of payments to the rule of law. The final decisions were to be taken at summits of the leaders of the Member States in the following weeks.

Why this matters for the biogas sector

European funds remain in Poland one of the main sources of grants for RES installations and waste management infrastructure. The changes in the financing system — grants awarded on the basis of a national plan, and not only through operational programmes — meant that the quality of the Polish recovery plan determined which technologies would receive funds. The biogas industry therefore had a reason to take part in consultations and to argue that biogas and biomethane contribute to climate goals and energy security.