Regulation (EU) 2021/241 on the Recovery and Resilience Facility signed

Regulation (EU) 2021/241 establishing the Recovery and Resilience Facility (RRF) was signed on 12 February 2021; its publication in the Official Journal of the EU was due in the following days. The RRF is the main pillar of the Next Generation EU recovery fund: it has EUR 672.5 billion at its disposal, of which EUR 312.5 billion in the form of grants and EUR 360 billion in the form of loans. For Poland and other countries it opens the way to financing investment in the green transition.

Key rules

• Climate goals – at least 37% of expenditure in each national plan is to support climate goals.
• Digital transition – at least 20% of expenditure.
• The "do no significant harm" principle – investments must not do significant harm to the six environmental objectives set out in the EU taxonomy.
• Deadlines – Member States were to submit plans by 30 April 2021; funds are paid out on the basis of milestones and targets achieved.
• Areas of support – green transition, digitalisation, smart and sustainable growth, cohesion, health and resilience, policies for young people.

The "do no significant harm" principle refers to the same six objectives that define sustainable activity in the EU taxonomy, including the transition to a circular economy and pollution prevention.

Significance for biogas and waste

For the biogas industry the RRF matters in two ways. First, investments in RES, grids, energy efficiency and waste management can be financed under the national plans. Second, the "do no significant harm" principle means that projects must be consistent with the waste hierarchy – investments in waste incineration must show that they do not undermine recycling, while biowaste digestion or sorting projects fit more easily within the waste hierarchy.

In practice, which biogas, biomethane and waste projects receive grants will be decided by the content of the national recovery plan, not by the fund itself.

What this means for Poland

At that time Poland was preparing its National Recovery Plan (KPO), which was to cover, among other things, energy, transport and environmental protection. The deadline for submitting the plan to the Commission expired at the end of April 2021. For investors this meant a window in which they could seek to have their projects included in the plan, and for local governments – to prepare investment projects in waste management and renewable energy.

What next

After the plans were submitted, the Commission was to assess them and the Council to approve them. Only after approval was it possible to sign agreements and pay out the first instalments.

The difference between grants and loans

The grant part of the RRF does not need to be repaid, whereas loans must be repaid by the state. Countries use the two parts differently: some draw only on grants, others also on loans. The choice affects the scale of funds available to investors, including for energy and environmental projects, and how the state plans to finance the transition.