### (15) the territorial just transition plans should identify the territories most negatively affected , where jtf support should be concentrated and describe specific actions to be undertaken to reach a climate-neutral economy , notably as regards the conversion or closure of facilities involving fossil fuel production or other greenhouse gas intensive activities. those territories should be precisely defined and correspond to nuts level 3 regions or should be parts thereof. the plans should detail the challenges and needs of those territories and identify the type of operations needed in a manner that ensures the coherent development of climate-resilient economic activities that are also consistent with the transition to climate-neutrality and the objectives of the green deal. only investments in accordance with the transition plans should receive financial support from the jtf. the territorial just transition plans should be part of the programmes (supported by the erdf , the esf+ , the cohesion fund or the jtf , as the case may be) which are approved by the commission. ### (15) the territorial just transition plans should identify the territories most negatively affected , where jtf support should be concentrated and describe specific actions to be undertaken to reach a climate-neutral economy , notably as regards the conversion or closure of facilities involving fossil fuel production or other greenhouse gas intensive activities. those territories should be precisely defined and correspond to nuts level 3 regions , or make coalitions between two and six of them , or should be parts thereof. the plans should detail the challenges and needs of those territories and identify the type of operations needed in a manner that ensures the coherent development of climate-resilient economic activities that are also consistent with the transition to climate-neutrality and the objectives of the green deal. only investments in accordance with the transition plans should receive financial support from the jtf. the territorial just transition plans should be part of the programmes (supported by the erdf , the esf+ , the cohesion fund or the jtf , as the case may be) which are approved by the commission.


### (15) the territorial just transition plans should identify the territories most negatively affected , where jtf support should be concentrated and describe specific actions to be undertaken to reach a climate-neutral economy , notably as regards the conversion or closure of facilities involving fossil fuel production or other greenhouse gas intensive activities. those territories should be precisely defined and correspond to nuts level 3 regions or should be parts thereof. the plans should detail the challenges and needs of those territories and identify the type of operations needed in a manner that ensures the coherent development of climate-resilient economic activities that are also consistent with the transition to climate-neutrality and the objectives of the green deal. only investments in accordance with the transition plans should receive financial support from the jtf. the territorial just transition plans should be part of the programmes (supported by the erdf , the esf+ , the cohesion fund or the jtf , as the case may be) which are approved by the commission. ### (15) the territorial just transition plans should identify the territories most negatively affected , where jtf support should be concentrated and describe specific actions to be undertaken to reach a fully renewables-based , highly resource and energy-efficient climate-neutral and circular economy aimed at achieving net zero ghg emissions by 2040 , notably as regards the conversion or closure of facilities involving fossil fuel production or other greenhouse gas intensive activities. those territories should be precisely defined and correspond to nuts level 3 regions or should be parts thereof. the plans should detail the challenges , the opportunities and needs of those territories , including the green , permanent and quality job creation potential required to achieve a socially just transition which leaves no one behind , and identify the type of operations needed in a manner that ensures the coherent development of climate-resilient economic activities that are also consistent with the transition to renewables-based , highly resource and energy-efficient climate-neutral and circular economy aimed at achieving net zero ghg emissions by 2040 and the objectives of the green deal. only investments in accordance with the transition plans should receive financial support from the jtf. the territorial just transition plans should be part of the programmes (supported by the erdf , the esf+ , the cohesion fund or the jtf , as the case may be) which are approved by the commission.


### (15) the territorial just transition plans should identify the territories most negatively affected , where jtf support should be concentrated and describe specific actions to be undertaken to reach a climate-neutral economy , notably as regards the conversion or closure of facilities involving fossil fuel production or other greenhouse gas intensive activities. those territories should be precisely defined and correspond to nuts level 3 regions or should be parts thereof. the plans should detail the challenges and needs of those territories and identify the type of operations needed in a manner that ensures the coherent development of climate-resilient economic activities that are also consistent with the transition to climate-neutrality and the objectives of the green deal. only investments in accordance with the transition plans should receive financial support from the jtf. the territorial just transition plans should be part of the programmes (supported by the erdf , the esf+ , the cohesion fund or the jtf , as the case may be) which are approved by the commission. ### (15) the territorial just transition plans should identify the territories most affected , where jtf support should be concentrated and describe specific actions to be undertaken to reach a climate-neutral economy , notably as regards the conversion or closure of facilities involving fossil fuel production or other greenhouse gas intensive activities , as well as a detailed plan on investments in new infrastructure , whilst maintaining and expanding employment opportunities in the affected territories in order to avoid social exclusion. those territories should be precisely defined and correspond to nuts level 3 regions or should be parts thereof. the plans should detail the challenges and needs of those territories , including in terms of infrastructure and job creation , and identify the type of operations needed in a manner that ensures the coherent development of climate-resilient economic activities that are also consistent with the transition to climate-neutrality. only investments in accordance with the transition plans should receive financial support from the jtf. the territorial just transition plans should be part of the programmes (supported by the erdf , the esf+ , the cohesion fund or the jtf , as the case may be) which are approved by the commission.


### 2. it lays down the specific objective of the jtf , its geographical coverage and resources , the scope of its support with regard to the investment for jobs and growth goal referred to in [point (a) of article 4(2)] of regulation (eu) [new cpr] as well as specific provisions for programming and indicators necessary for monitoring. ### 2. it lays down the specific objective of the jtf , its geographical coverage and resources , the scope of its support as well as specific provisions for programming and indicators necessary for monitoring.


### in accordance with the second subparagraph of article [4(1)] of regulation (eu) [new cpr] , the jtf shall contribute to the single specific objective ‘enabling regions and people to address the social , economic and environmental impacts of the transition towards a climate-neutral economy’. ### the jtf shall contribute to the specific objective ‘enabling regions and people to address the social , economic and environmental impacts of the transition towards a climate-neutral economy’.


### in accordance with paragraph 1 , the jtf shall exclusively support the following activities: ### in accordance with paragraph 1 , the jtf shall support the following activities:


### investments in research and innovation activities and fostering the transfer of advanced technologies; ### investments in research and innovation activities and fostering the transfer of advanced technologies , including ai technologies;


### investments in the deployment of technology and infrastructures for affordable clean energy , in greenhouse gas emission reduction , energy efficiency and renewable energy; ### investments in the deployment of technology and infrastructures for affordable clean energy , in greenhouse gas emission reduction , energy efficiency and renewable energy , including investments in development and deployment of means of zero-emission mobility and automated driving;


### the decommissioning or the construction of nuclear power stations; ### deleted


### investment related to the production , processing , distribution , storage or combustion of fossil fuels; ### investment related to the production , processing , distribution , storage or combustion of fossil fuels other than natural gas;;


### the jtf resources shall be programmed for the categories of regions where the territories concerned are located , on the basis of the territorial just transition plans established in accordance with article 7 and approved by the commission as part of a programme or a programme amendment. the resources programmed shall take the form of one or more specific programmes or of one or more priorities within a programme. ### the jtf resources shall be programmed for the categories of regions where the territories concerned are located , on the basis of the territorial just transition plans established in accordance with article 7 and approved by the commission as part of a programme or a programme amendment , except for modifications regarding pillars 2 or 3 of the just transition mechanism. the resources programmed shall take the form of one or more specific programmes or of one or more priorities within a programme.


### the jtf resources shall be programmed for the categories of regions where the territories concerned are located , on the basis of the territorial just transition plans established in accordance with article 7 and approved by the commission as part of a programme or a programme amendment. the resources programmed shall take the form of one or more specific programmes or of one or more priorities within a programme. ### the jtf resources shall be programmed for the categories of regions where the territories concerned are located , on the basis of the territorial just transition plans established in accordance with article 7 and approved by the commission as part of a programme or a programme amendment. the resources programmed shall take the form of one or more specific programmes or of one or more priorities within a programme covered by regulation (eu) .../... [new cpr].


### the commission shall only approve a programme where the identification of the territories most negatively affected by the transition process , contained within the relevant territorial just transition plan , is duly justified and the relevant territorial just transition plan is consistent with the national energy and climate plan of the member state concerned. ### the commission shall only approve a programme where the identification of the territories affected by the transition process , contained within the relevant territorial just transition plan , is duly justified and the relevant territorial just transition plan is consistent with the national energy and climate plan of the member state concerned.


### 1. member states shall prepare , together with the relevant authorities of the territories concerned , one or more territorial just transition plans covering one or more affected territories corresponding to level 3 of the common classification of territorial units for statistics (‘nuts level 3 regions’) as established by regulation (ec) no 1059/2003 of the european parliament and of the council as amended by commission regulation (ec) no 868/201417 or parts thereof , in accordance with the template set out in annex ii. those territories shall be those most negatively affected based on the economic and social impacts resulting from the transition , in particular with regard to expected job losses in fossil fuel production and use and the transformation needs of the production processes of industrial facilities with the highest greenhouse gas intensity. ### 1. member states shall prepare , together with the relevant authorities of the territories concerned , one or more territorial just transition plans covering one or more affected territories corresponding to level 3 of the common classification of territorial units for statistics (‘nuts level 3 regions’) as established by regulation (ec) no 1059/2003 of the european parliament and of the council as amended by commission regulation (ec) no 868/201417 or parts thereof , in accordance with the template set out in annex ii. these regions shall be able to make coalitions between two and six of them. those territories shall be those most negatively affected based on the economic and social impacts resulting from the transition , in particular with regard to expected job losses in fossil fuel production and use and the transformation needs of the production processes of industrial facilities with the highest greenhouse gas intensity.


### 1. member states shall prepare , together with the relevant authorities of the territories concerned , one or more territorial just transition plans covering one or more affected territories corresponding to level 3 of the common classification of territorial units for statistics (‘nuts level 3 regions’) as established by regulation (ec) no 1059/2003 of the european parliament and of the council as amended by commission regulation (ec) no 868/201417 or parts thereof , in accordance with the template set out in annex ii. those territories shall be those most negatively affected based on the economic and social impacts resulting from the transition , in particular with regard to expected job losses in fossil fuel production and use and the transformation needs of the production processes of industrial facilities with the highest greenhouse gas intensity. ### 1. member states shall prepare , together with the relevant authorities of the territories concerned , one or more territorial just transition plans covering the areas of one or more affected territories corresponding to level 3 of the common classification of territorial units for statistics (‘nuts level 3 regions’) as established by regulation (ec) no 1059/2003 of the european parliament and of the council as amended by commission regulation (ec) no 868/201417 or parts thereof , in accordance with the template set out in annex ii. those territories shall be those most negatively affected based on the economic and social impacts resulting from the transition , in particular with regard to expected job losses in fossil fuel production and use and the transformation needs of the production processes of industrial facilities with the highest greenhouse gas intensity.


### a description of the transition process at national level towards a climate-neutral economy , including a timeline for key transition steps which are consistent with the latest version of the national energy and climate plan (‘necp’); ### a description of the transition process at national , regional and local levels towards a climate-neutral economy , including a timeline for key transition steps which are consistent with the latest version of the national energy and climate plan (‘necp’);


### territorial just transition plans shall be consistent with the territorial strategies referred to in article [23] of regulation (eu) [new cpr] , with relevant smart specialisation strategies , the necps and the european pillar of social rights. ### territorial just transition plans shall be consistent with the territorial strategies referred to in article [23] of regulation (eu) [new cpr] , with relevant smart specialisation strategies , the necps.


### 2. for output indicators , baselines shall be set at zero. the milestones set for 2024 and targets set for 2029 shall be cumulative. targets shall not be revised after the request for programme amendment submitted pursuant to article [14(2)] of regulation (eu) [new cpr] has been approved by the commission. ### 2. for output indicators , baselines shall be set at zero. the targets set for 2029 shall be cumulative. targets shall not be revised after the request for programme amendment submitted pursuant to article [14(2)] of regulation (eu) [new cpr] has been approved by the commission.


### for each member state , the financial envelope is determined in accordance with the following steps: ### for each member state , the financial envelope is determined in accordance with the following steps:


### 1. notes that , as indicated in the annual report of the court of auditors for the financial year 2018 , the estimated level of error in spending on ‘economic , social and territorial cohesion’ increased from 3 % in 2017 to 5 % in 2018; regrets that , even if it should be stressed that errors in the implementation of the budget do not automatically imply a fraud , the positive trend of the last years has been reversed; ### 1. regrets that , as indicated in the annual report of the court of auditors for the financial year 2018 , the estimated level of error in spending on ‘economic , social and territorial cohesion’ increased from 3 % in 2017 to 5 % in 2018; regrets that , even if it should be stressed that errors in the implementation of the budget do not automatically imply a fraud , the positive trend of the last years has been reversed with a huge damage for european citizens;


### 3. draws attention to the fact that high-risk expenditures are often subject to complex rules and eligibility conditions which lead to errors and that a number of these errors are compounded by a supplemental layer added by national authorities; recalls that simpler national eligibility rules might help reduce this source of error and result in a smaller administrative burden for beneficiaries; ### 3. draws attention to the fact that high-risk expenditures are often subject to complex rules and eligibility conditions which lead to errors and that a number of these errors are compounded by a supplemental layer added by national and union authorities; recalls that simpler eligibility rules might help reduce this source of error and result in a smaller administrative burden for beneficiaries; invite the commission to take note of the problem and find better solutions in order to avoid the administrative burdens and to foster simplified procedures;


### 3. draws attention to the fact that high-risk expenditures are often subject to complex rules and eligibility conditions which lead to errors and that a number of these errors are compounded by a supplemental layer added by national authorities; recalls that simpler national eligibility rules might help reduce this source of error and result in a smaller administrative burden for beneficiaries; ### 3. draws attention to the fact that high-risk expenditures are often subject to complex rules and eligibility conditions which lead to errors and that a number of these errors are compounded by a supplemental layer added by national authorities; recalls that simpler national eligibility rules might help reduce this source of error and result in a smaller administrative burden for beneficiaries; highlights that flexibility can be conducive to a more rapid and efficient uptake of funds;


### 3. draws attention to the fact that high-risk expenditures are often subject to complex rules and eligibility conditions which lead to errors and that a number of these errors are compounded by a supplemental layer added by national authorities; recalls that simpler national eligibility rules might help reduce this source of error and result in a smaller administrative burden for beneficiaries; ### 3. draws attention to the fact that high-risk expenditures are often subject to complex rules and eligibility conditions which lead to errors and that a number of these errors are compounded by a supplemental layer added by national authorities; agrees with court of auditors conclusion that simpler national eligibility rules might help reduce this source of error and result in a smaller administrative burden for beneficiaries;


### 4. stresses that the absorption of european structural and investment funds (‘esi funds’) has continued to be slower than planned - by the end of 2018 , only 27 ,3% - notes that this value is even lower than the absorption rate of 2011 , the corresponding year of the previous multiannual financial framework; ### 4. stresses that the absorption of european structural and investment funds (‘esi funds’) has continued to be slower than planned - by the end of 2018 , only 27 ,3% - notes that this value is even lower than the absorption rate of 2011 , the corresponding year of the previous multiannual financial framework; in order to better use esi funds , suggests to have a swot analysis on the functioning of such funds and their absorption rate for the implementation period;


### 4. stresses that the absorption of european structural and investment funds (‘esi funds’) has continued to be slower than planned - by the end of 2018 , only 27 ,3% - notes that this value is even lower than the absorption rate of 2011 , the corresponding year of the previous multiannual financial framework; ### 4. stresses that the absorption of european structural and investment funds (‘esi funds’) has continued to be slower than planned - by the end of 2018 , only 27 ,3% - notes that this value is even lower than the absorption rate in 2011 of 33 ,4% , the corresponding year of the previous multiannual financial framework;


### 4. welcomes the eca's analytical review on european defence and supports its recommendations; calls on the commission as guardian of the treaties to ensure the coherence of all union defence efforts carried out for the implementation of a union activity under the csdp (pesco , edidp , edf , card etc.) and to ensure synergies with nato; considers that a competitive european defence technological and industrial base , enhancing member states’ military capabilities and framing a european defence union must be the key objectives of the union under the next mff; ### 4. welcomes the eca's analytical review on european defence and supports its recommendations; calls on the commission as guardian of the treaties to ensure the coherence of all union defence efforts carried out for the implementation of a union activity under the csdp (pesco , edidp , edf , card etc.) and to ensure synergies with nato; considers that a competitive european defence technological and industrial base , improved coordination of member states’ military capabilities and framing a european defence union are important objectives of the union under the next mff.


### 5. recalls that the reasons behind this low absorption rate not only lie in the decommitment methodology (the so-called “n+3 rule”) , but also in the late adoption of the legislative framework enabling the implementation of the cohesion policy; therefore calls on the commission and the council to ensure proper measures in the next programming period 2021-2027 to avoid the repetition of delayed implementation of esi funds and its domino effect. ### 5. recalls that the reasons behind this low absorption rate not only lie in the decommitment methodology (the so-called “n+3 rule”) , but also in the late adoption of the legislative framework enabling the implementation of the cohesion policy , which is a situation that needs to be averted in the future; therefore calls on the council and its successive presidencies to match the parliament's speed and focus in the ongoing legislative procedure concerning adoption of the mff and cohesion policy regulations for the next programming period 2021 -2027; further calls on the commission and the council to ensure proper measures in the (next programming period) 2021-2027 programming period in order to avoid the repetition of delayed implementation of esi funds and its domino effect;


### 5. recalls that the reasons behind this low absorption rate not only lie in the decommitment methodology (the so-called “n+3 rule”) , but also in the late adoption of the legislative framework enabling the implementation of the cohesion policy; therefore calls on the commission and the council to ensure proper measures in the next programming period 2021-2027 to avoid the repetition of delayed implementation of esi funds and its domino effect. ### 5. recalls that the reasons behind this low absorption rate lie in the late adoption of the legislative framework enabling the implementation of the cohesion policy; therefore calls on the commission and the council to ensure proper measures in the next programming period 2021-2027 to avoid the repetition of delayed implementation of esi funds and its domino effect;


### 5. is concerned by alleged cases of high-level conflicts of interest and land-grabbing by oligarchs with possible facilitation by governments and public authorities; calls on the commission to increase efforts to prevent and detect fraud; urges the commission to be extra vigilant on rule of law matters; ### 5. calls on the commission to continue , as guardian of the treaties , underlining aspects of legality and the prevention of all kinds of abuse;


### 2. takes note that the source of those errors is mainly a result of reimbursements of ineligible costs , infringements of internal market rules and lack of support documentation , but is also due to the previous year’s overall low rates of reimbursement and payments as well as fewer financial instruments having been included in the audit; ### 2. takes note that the source of those errors is mainly a result of reimbursements of ineligible costs , infringements of internal market rules and lack of support documentation , but is also due to the previous year’s overall low rates of reimbursement and payments as well as fewer financial instruments having been included in the audit; reminds that simplification of rules in general can greatly contribute to the more effective use of funds and to the reduction of the error rate;


### 2. takes note that the source of those errors is mainly a result of reimbursements of ineligible costs , infringements of internal market rules and lack of support documentation , but is also due to the previous year’s overall low rates of reimbursement and payments as well as fewer financial instruments having been included in the audit; ### 2. takes note that the source of those errors is mainly a result of reimbursements of ineligible costs (44%) , infringements of internal market rules (40%) and lack of support documentation (11%) , but is also due to the previous year’s overall low rates of reimbursement and payments as well as fewer financial instruments having been included in the audit;


### 2. points to the eca special report no 35/2018 (“transparency of eu funds implemented by ngos: more effort needed”) , which finds that transparency is often lacking regarding the implementation of union funds by non-governmental organisations (ngos) , particularly when funds are sub-contracted by un bodies; calls on the commission to improve its systems for tracing the use of funds implemented by ngos and ensure and verify the correct application of rules and procedures , in line with the eca’s recommendations; ### 2. points to the eca special report no 35/2018 ('transparency of eu funds implemented by ngos: more effort needed') , which concludes that the commission has not been sufficiently transparent with regard to the implementation of eu funds by ngos , particularly when funds are sub-contracted by un bodies; calls on the commission to improve its systems for tracing the use of funds implemented by ngos , apply a consistent interpretation of the applicable rules of the financial regulation among the different services and ensure and verify the correct application of rules and procedures , in line with the eca’s recommendations;


### 95. notes that for the third year in a row , dg budget set a reservation on the value of tradition own resource collected by the united kingdom , due to the country’s failure to make available to the union budget evaded customs duties on textiles and footwear imports; ### deleted


### 97. regrets that after asking the united kingdom in 2011 to set risk profiles for under-valued textiles and footwear imports from china , it took the commission more than seven years to launch an infringement procedure; ### deleted


### 98. welcomes the facts that in 2018 , the commission sent a reasoned opinion to the united kingdom having calculated the total losses (principal and interest) to the union budget at eur 2 ,8 billion and that in march 2019 , the commission referred the case to the court of justice; ### deleted


### 100. notes with concern that the court found in spain weaknesses in the control systems for compiling the monthly statements of customs duties; ### deleted


### 101. notes with concern that in france , italy and spain the court detected weaknesses in the management of established duties not yet collected; notes that these weaknesses mainly concerned delays in enforcing recovery of customs debts and the late recording or writing off of debts in the accounting system; notes weaknesses in the commission’s verifications of the member states’ tor statements; ### deleted


### 107. notes with concern that in 2018 , the commission placed a general reservation relating to france’s estimation of its gni because france had provided insufficient information on the compilation of its gni; ### deleted


### czech republic ### deleted


### 181. was informed that the commission carried out comprehensive audits regarding the application of union and national law; expects that the commission will inform parliament’s responsible committee about the findings of the audits the moment they become available; ### deleted


### 182. deplores the fact that the auditors detected , in the area of regional and cohesion funds , serious deficiencies in the functioning of the management and control systems and therefore suggested a financial correction of almost 20 %; ### deleted


### 183. also deplores the fact that the commission auditors detected cases of conflict of interests; understands , however , that the czech national law on conflicts of interests does not prohibit granting public funds and that the auditors therefore suggested cancelling public contribution to the projects , as no expenditures were declared so far; ### deleted


### hungary ### deleted


### 184. welcomes the fact that the commission has informed its competent committee that dg regio intends to recover more than eur 1 billion from programmes , in which it discovered irregularities and that this amount affects the following operational programmes: ### deleted


### 185. notes furthermore that dg regio has not yet completed verifications concerning technical assistance programmes and programmes concerning electronic administration; it expects however to issue recovery orders worth at least eur 60 million; ### deleted


### 186. ask the commission to establish , for the programmes above , a clear timeline from the start of the project until the recovery of the funds , explaining the different stages; ### deleted


### 187. asks the commission how these recoveries will be budgeted as they affect programmes of the previous programming period 2007 to 2013; ### deleted


### 219. takes note of the fact that (see reply to written question no 3 at the cont hearing of the dg agri director general 17 october 2019): ### deleted


### - the commission is currently following up on allegations of conflict of interest in the czech republic based on article 61 of the financial regulations. in january-february 2019 , a coordinated audit was carried out by several commission services (dg agri/dg regio/dg empl). dg agri audited the investment measures under rural development; ### deleted


### - the commission enquiry is ongoing. and as a precautionary measure and until the situation is clarified , no payments from the union budget under the esi funds are being made to companies directly and indirectly owned by pm babiš that could be potentially affected by the alleged conflict of interest; ### deleted


### - in relation to the rural development fund , the commission is not reimbursing to the czech authorities the amounts related to agrofert projects that could be potentially affected by the alleged conflict of interest; ### deleted


### 220. calls on the commission , in case of non-compliance with the rules , to take appropriate measures to protect the union budget including corrective actions for the past where this is provided for; ### deleted


### 221. calls on the commission to cautiously supervise the process in the czech republic , especially payments being made to companies directly and indirectly owned by the prime minister or other members of the czech government , at present; notes that there is still high risk of extensive financial damage in view of the fact that the ministry of agriculture of the czech republic still reimburses subsidies to agrofert; ### deleted


### 222. calls on the commission to cautiously supervise the process of recovering misused funds in order to ensure that the czech republic will take legal steps to enforce remedy from those responsible for the misuse of union funds; ### deleted


### 223. calls on the commission to inform parliament’s responsible committee about the findings of the audits immediately in full respect with the principles of transparency and legal certainty which are part of the rule of law principles; ### deleted


### 224. calls on the commission to carefully scrutinise whether the political situation in czech republic fully respect the rule of law principles; ### deleted


### slovakia ### deleted


### 225. calls on the commission to carefully scrutinise the replies given in august 2019 by the slovak authorities about the legislative measures they are taking to improve the correctness and transparency of the “land registry” (cadastre) , the follow-up on the allegation of fraud , the recoveries as well as about a new methodology implemented by the slovak paying agency (apa) for the treatment of double claims; ### deleted


### 226. calls on the commission to keep parliament informed in a timely manner about the evolution of the files in czech republic and in slovakia; ### deleted


### hungary ### deleted


### 227. notes that as regards hungary , following the results of olaf investigations , dg agri audits of 2015 and 2017 found a systemic lack of verification of conflict of interest in public procurement procedures under 2007 to 2013 rural development programme; ### deleted


### 228. welcomes the facts that: ### deleted


### - the commission decided the application of financial corrections totalling around eur 6.5 million; ### deleted


### - the hungarian authorities committed to remedy the situation for the programming period 2014 to 2020 , including appointing an audit company that would conduct the review of public procurement processes; ### deleted


### 229. calls on dg agri to closely monitor the situation in hungary and to timely report on the follow-up to parliament; ### deleted


### 232. calls on the commission to table a modification of the cap rules with a view to avoiding that union funds be given where the land has been taken by force; ### 232. calls on the commission to table a modification of the cap rules with a view to avoiding that union funds be given where the land has been taken by force or where ownership thereof has been falsely declared , possibly even without the knowledge of the true owners or , in case of state-owned land , of the public bodies concerned;


### 278. regrets the fact that it takes such a long time to remedy the problems detected in germany since 2013 considering that the scope of the reservation is not so large; ### deleted


### - use lessons learned to build on experience for any possible voluntary relocation mechanism in the future and to propose new measures to tackle effectively any emergency situation like the migration crisis of 2015 , which are acceptable for the member states; ### - ca1ls on the commission to acknowledge the failure of the mandatory relocation schemes and to propose new measures to tackle effectively any similar emergency situation like the migration crisis of 2015 , which are acceptable for all member states.;


### 7. stresses that support to young farmers from the cap is essential; encourages the commission to move towards a greener cap in line with the paris agreement. ### 7. stresses that support to young farmers from the cap is essential; encourages the commission to move towards an appropriate level of eu financing in line with the paris agreement.


### (8) the eu ets should incentivise production from installations that partly or fully reduce greenhouse gas emissions. therefore , the description of some categories of activities in annex i to directive 2003/87/ec should be amended to ensure an equal treatment of installations in the sectors concerned. in addition , free allocation for the production of a product should be independent of the nature of the production process. it is therefore necessary to modify the definition of the products and of the processes and emissions covered for some benchmarks to ensure a level playing field for new and existing technologies. it is also necessary to decouple the update of the benchmark values for refineries and for hydrogen to reflect the increasing importance of production of hydrogen outside the refineries sector. ### (8) the eu ets should incentivise production from installations that partly or fully reduce greenhouse gas emissions. therefore , the description of some categories of activities in annex i to directive 2003/87/ec should be amended to ensure an equal treatment of installations in the sectors concerned. in addition , free allocation for the production of a product should be independent of the nature of the production process.


### (28) achieving the increased climate ambition will require substantial public resources in the eu as well as national budgets to be dedicated to the climate transition. to complement and reinforce the substantial climate-related spending in the eu budget , all auction revenues that are not attributed to the union budget should be used for climate-related purposes. this includes the use for financial support to address social aspects in lower- and middle-income households by reducing distortive taxes. further , to address distributional and social effects of the transition in low-income member states , an additional amount of 2 ,5 % of the union-wide quantity of allowances from [year of entry into force of the directive] to 2030 should be used to fund the energy transition of the member states with a gross domestic product (gdp) per capita below 65 % of the union average in 2016-2018 , through the modernisation fund referred to in article 10d of directive 2003/87/ec. ### (28) achieving the increased climate ambition will require substantial public resources in the eu as well as national budgets to be dedicated to the climate transition. to complement and reinforce the substantial climate-related spending in the eu budget , all auction revenues that are not attributed to the union budget should be used for climate-related purposes. this includes the use for financial support to address social aspects in lower- and middle-income households by reducing distortive taxes. further , to address distributional and social effects of the transition in low-income member states , an additional amount of 4 % of the union-wide quantity of allowances from [year of entry into force of the directive] to 2030 should be used to fund the energy transition of the member states with a gross domestic product (gdp) per capita below 65 % of the union average in 2016-2018 , through the modernisation fund referred to in article 10d of directive 2003/87/ec.


### (30) the carbon border adjustment mechanism (cbam) , established under regulation (eu) […./..] of the european parliament and of the council51 , is an alternative to free allocation to address the risk of carbon leakage. to the extent that sectors and subsectors are covered by that measure , they should not receive free allocation. however , a transitional phasing-out of free allowances is needed to allow producers , importers and traders to adjust to the new regime. the reduction of free allocation should be implemented by applying a factor to free allocation for cbam sectors , while the cbam is phased in. this percentage (cbam factor) should be equal to 100 % during the transitional period between the entry into force of [cbam regulation] and 2025 , 90 % in 2026 and should be reduced by 10 percentage points each year to reach 0 % and thereby eliminate free allocation by the tenth year. the relevant delegated acts on free allocation should be adjusted accordingly for the sectors and subsectors covered by the cbam. the free allocation no longer provided to the cbam sectors based on this calculation (cbam demand) must be auctioned and the revenues will accrue to the innovation fund , so as to support innovation in low carbon technologies , carbon capture and utilisation (‘ccu’) , carbon capture and geological storage (‘ccs’) , renewable energy and energy storage , in a way that contributes to mitigating climate change. special attention should be given to projects in cbam sectors. to respect the proportion of the free allocation available for the non-cbam sectors , the final amount to deduct from the free allocation and to be auctioned should be calculated based on the proportion that the cbam demand represents in respect of the free allocation needs of all sectors receiving free allocation. ### (30) the carbon border adjustment mechanism (cbam) , established under regulation (eu) […./..] of the european parliament and of the council51 , is an alternative to free allocation to address the risk of carbon leakage. to the extent that sectors and subsectors are covered by that measure , they should not receive free allocation. however , a transitional phasing-out of free allowances is needed to allow producers , importers and traders to adjust to the new regime. the reduction of free allocation should be implemented by applying a factor to free allocation for cbam sectors , while the cbam is phased in. sufficient safeguards should nevertheless be provided for the products intended for exports and their producers. this percentage (cbam factor) should be equal to 100 % during the transitional period between the entry into force of [cbam regulation] and 2025 , 90 % in 2026 and should be reduced by 10 percentage points each year to reach 0 % and thereby eliminate free allocation by the tenth year. the relevant delegated acts on free allocation should be adjusted accordingly for the sectors and subsectors covered by the cbam taking into account the need to maintain free allowances for the products that are exported. the free allocation no longer provided to the cbam sectors based on this calculation (cbam demand) must be auctioned and the revenues will accrue to the innovation fund , so as to support innovation in low and zero carbon technologies , carbon capture and utilisation (‘ccu’) , carbon capture and geological storage (‘ccs’) , renewable energy and energy storage , in a way that contributes to mitigating climate change. special attention should be given to projects in cbam sectors. to respect the proportion of the free allocation available for the non-cbam sectors , the final amount to deduct from the free allocation and to be auctioned should be calculated based on the proportion that the cbam demand represents in respect of the free allocation needs of all sectors receiving free allocation.


### (33) the scope of the innovation fund referred to in article 10a(8) of directive 2003/87/ec should be extended to support innovation in low-carbon technologies and processes that concern the consumption of fuels in the sectors of buildings and road transport. in addition , the innovation fund should serve to support investments to decarbonise the maritime transport sector , including investments in sustainable alternative fuels , such as hydrogen and ammonia that are produced from renewables , as well as zero-emission propulsion technologies like wind technologies. considering that revenues generated from penalties raised in regulation xxxx/xxxx [fueleu maritime]52 are allocated to the innovation fund as external assigned revenue in accordance with article 21(5) of the financial regulation , the commission should ensure that due consideration is given to support for innovative projects aimed at accelerating the development and deployment of renewable and low carbon fuels in the maritime sector , as specified in article 21(1) of regulation xxxx/xxxx [fueleu maritime]. to ensure sufficient funding is available for innovation within this extended scope , the innovation fund should be supplemented with 50 million allowances , stemming partly from the allowances that could otherwise be auctioned , and partly from the allowances that could otherwise be allocated for free , in accordance with the current proportion of funding provided from each source to the innovation fund. ### (33) the scope of the innovation fund referred to in article 10a(8) of directive 2003/87/ec should be extended to support innovation in low-carbon technologies and processes that concern the consumption of fuels in the sectors of buildings and road transport. in addition , the innovation fund should serve to support investments to decarbonise the maritime transport sector , including investments in sustainable alternative fuels , such as hydrogen and ammonia that are produced from renewables , as well as zero-emission propulsion technologies like wind technologies. considering that revenues generated from penalties raised in regulation xxxx/xxxx [fueleu maritime]52 are allocated to the innovation fund as external assigned revenue in accordance with article 21(5) of the financial regulation , the commission should ensure that due consideration is given to support for innovative projects aimed at accelerating the development and deployment of renewable and low carbon fuels in the maritime sector , as specified in article 21(1) of regulation xxxx/xxxx [fueleu maritime]. to ensure sufficient funding is available for innovation within this extended scope , the innovation fund should be supplemented with 50 million allowances , stemming partly from the allowances that could otherwise be auctioned , and partly from the allowances that could otherwise be allocated for free , in accordance with the current proportion of funding provided from each source to the innovation fund. projects supported from the innovation fund should respect the principle of geographical balance.


### (35) carbon contracts for difference (ccds) are an important element to trigger emission reductions in industry , offering the opportunity to guarantee investors in innovative climate-friendly technologies a price that rewards co2 emission reductions above those induced by the current price levels in the eu ets. the range of measures that the innovation fund can support should be extended to provide support to projects through price-competitive tendering , such as ccds. the commission should be empowered to adopt delegated acts on the precise rules for this type of support. ### (35) carbon contracts for difference (ccds) are an important element to trigger emission reductions in industry , offering the opportunity to guarantee investors in innovative climate-friendly technologies a price that rewards co2 emission reductions above those induced by the current price levels in the eu ets. the range of measures that the innovation fund can support should be extended to provide support to projects through price-competitive tendering , such as ccds and respect the principle of geographical balance. the commission should be empowered to adopt delegated acts on the precise rules for this type of support.


### (38) the scope of the modernisation fund should be aligned with the most recent climate objectives of the union by requiring that investments are consistent with the objectives of the european green deal and regulation (eu) 2021/1119 , and eliminating the support to any investments related to fossil fuels. in addition , the percentage of the modernisation fund that needs to be devoted to priority investments should be increased to 80 %; energy efficiency should be targeted as a priority area at the demand side; and support of households to address energy poverty , including in rural and remote areas , should be included within the scope of the priority investments. ### (38) the scope of the modernisation fund should be aligned with the most recent climate objectives of the union by requiring that investments are consistent with the objectives of the european green deal and regulation (eu) 2021/1119 , and eliminating the support to any investments related to solid fossil fuels. in addition , the percentage of the modernisation fund that needs to be devoted to priority investments should be increased to 80 %; energy efficiency should be targeted as a priority area at the demand side; and support of households to address energy poverty , including in rural and remote areas , should be included within the scope of the priority investments.


### (43) the communication of the commission on stepping up europe’s 2030 climate ambition57 , underlined the particular challenge to reduce the emissions in the sectors of road transport and buildings. therefore , the commission announced that a further expansion of emissions trading could include emissions from road transport and buildings. emissions trading for these two new sectors would be established through separate but adjacent emissions trading. this would avoid any disturbance of the well-functioning emissions trading in the sectors of stationary installations and aviation. the new system is accompanied by complementary policies and measures safeguarding against undue price impacts , shaping expectations of market participants and aiming for a carbon price signal for the whole economy. previous experience has shown that the development of the new market requires setting up an efficient monitoring , reporting and verification system. in view of ensuring synergies and coherence with the existing union infrastructure for the eu ets covering the emissions from stationary installations and aviation , it is appropriate to set up emissions trading for the road transport and buildings sectors via an amendment to directive 2003/87/еc. ### deleted


### (47) the regulated entities falling within the scope of the emissions trading in the sectors of buildings and road transport should be subject to similar greenhouse gas emissions permit requirements as the operators of stationary installations. it is necessary to establish rules on permit applications , conditions for permit issuance , content , and review , and any changes related to the regulated entity. in order for the new system to start in an orderly manner , member states should ensure that regulated entities falling within the scope of the new emissions trading have a valid permit as of the start of the system in 2025. ### deleted


### (48) the total quantity of allowances for the new emissions trading should follow a linear trajectory to reach the 2030 emissions reduction target , taking into account the cost-efficient contribution of buildings and road transport of 43 % emission reductions by 2030 compared to 2005. the total quantity of allowances should be established for the first time in 2026 , to follow a trajectory starting in 2024 from the value of the 2024 emissions limits (1 109 304 000 co2t) , calculated in accordance with article 4(2) of regulation (eu) 2018/842 of the european parliament and of the council59 on the basis of the reference emissions for these sectors for the period from 2016 to 2018. accordingly , the linear reduction factor should be set at 5 ,15 %. from 2028 , the total quantity of allowances should be set on the basis of the average reported emissions for the years 2024 , 2025 and 2026 , and should decrease by the same absolute annual reduction as set from 2024 , which corresponds to a 5 ,43 % linear reduction factor compared to the comparable 2025 value of the above defined trajectory. if those emissions are significantly higher than this trajectory value and if this divergence is not due to small-scale differences in emission measurement methodologies , the linear reduction factor should be adjusted to reach the required emissions reduction in 2030. ### deleted


### (49) the auctioning of allowances is the simplest and the most economically efficient method for allocating emission allowances , which also avoids windfall profits. both the buildings and road transport sectors are under relatively small or non-existent competitive pressure from outside the union and are not exposed to a risk of carbon leakage. therefore , allowances for buildings and road transport should only be allocated via auctioning without there being any free allocation. ### deleted


### (50) in order to ensure a smooth start to emissions trading in the buildings and road transport sectors and taking into account the need of the regulated entities to hedge or buy ahead allowances to mitigate their price and liquidity risk , a higher amount of allowances should be auctioned early on. in 2026 , the auction volumes should therefore be 30 % higher than the total quantity of allowances for 2026. this amount would be sufficient to provide liquidity , both if emissions decrease in line with reduction needs , and in the event emission reductions only materialise progressively. the detailed rules for this front-loading of auction volume are to be established in a delegated act related to auctioning , adopted pursuant to article 10(4) of directive 2003/87/ec. ### deleted


### (51) the distribution rules on auction shares are highly relevant for any auction revenues that would accrue to the member states , especially in view of the need to strengthen the ability of the member states to address the social impacts of a carbon price signal in the buildings and road transport sectors. notwithstanding the fact that the two sectors have very different characteristics , it is appropriate to set a common distribution rule similar to the one applicable to stationary installations. the main part of allowances should be distributed among all member states on the basis of the average distribution of the emissions in the sectors covered during the period from 2016 to 2018. ### deleted


### (52) the introduction of the carbon price in road transport and buildings should be accompanied by effective social compensation , especially in view of the already existing levels of energy poverty. about 34 million europeans reported an inability to keep their homes adequately warm in 2018 , and 6 ,9 % of the union population have said that they cannot afford to heat their home sufficiently in a 2019 eu-wide survey60 . to achieve an effective social and distributional compensation , member states should be required to spend the auction revenues on the climate and energy-related purposes already specified for the existing emissions trading , but also for measures added specifically to address related concerns for the new sectors of road transport and buildings , including related policy measures under directive 2012/27/eu of the european parliament and of the council61 . auction revenues should be used to address social aspects of the emission trading for the new sectors with a specific emphasis in vulnerable households , micro-enterprises and transport users. in this spirit , a new social climate fund will provide dedicated funding to member states to support the european citizens most affected or at risk of energy or mobility poverty. this fund will promote fairness and solidarity between and within member states while mitigating the risk of energy and mobility poverty during the transition. it will build on and complement existing solidarity mechanisms. the resources of the new fund will in principle correspond to 25 % of the expected revenues from new emission trading in the period 2026-2032 , and will be implemented on the basis of the social climate plans that member states should put forward under regulation (eu) 20…/nn of the european parliament and the council62 . in addition , each member state should use their auction revenues inter alia to finance a part of the costs of their social climate plans. ### (52) the increased costs of the green transition should be accompanied by effective social compensation , especially in view of the already existing levels of energy poverty. about 34 million europeans reported an inability to keep their homes adequately warm in 2018 , and 6 ,9 % of the union population have said that they cannot afford to heat their home sufficiently in a 2019 eu-wide survey60 . to achieve an effective social and distributional compensation , member states should receive additional funding to spend on the climate and energy-related purposes , but also for measures added specifically to address related concerns for the new sectors of road transport and buildings , including related policy measures under directive 2012/27/eu of the european parliament and of the council61 . these resources should be used to address social aspects of the green transition with a specific emphasis in vulnerable households , micro-enterprises and transport users. in this spirit , a strengthened and expanded modernisation fund would provide dedicated funding to member states to support the european citizens affected or at risk of energy or mobility poverty. this will further promote fairness and solidarity between and within member states while mitigating the risk of energy and mobility poverty during the transition. it will build on and complement existing solidarity mechanisms. in addition , each member state should use their resources as well inter alia to finance a part of the costs related to the green transition.


### (54) innovation and development of new low-carbon technologies in the sectors of buildings and road transport are crucial for ensuring the cost-efficient contribution of these sectors to the expected emission reductions. therefore , 150 million allowances from emissions trading in the buildings and road transport sectors should also be made available to the innovation fund to stimulate the cost-efficient emission reductions. ### deleted


### (55) regulated entities covered by the buildings and road transport emissions trading should surrender allowances for their verified emissions corresponding to the quantities of fuels they have released for consumption. they should surrender allowances for the first time for their verified emissions in 2026. in order to minimise the administrative burden , a number of rules applicable to the existing emissions trading system for stationary installations and aviation should be made applicable to emissions trading for buildings and road transport , with the necessary adaptations. this includes , in particular , rules on transfer , surrender and cancellation of allowances , as well as the rules on the validity of allowances , penalties , competent authorities and reporting obligations of member states. ### deleted


### (56) for emissions trading in the buildings and road transport sectors to be effective , it should be possible to monitor emissions with high certainty and at reasonable cost. emissions should be attributed to regulated entities on the basis of fuel quantities released for consumption and combined with an emission factor. regulated entities should be able to reliably and accurately identify and differentiate the sectors in which the fuels are released for consumption , as well as the final users of the fuels , in order to avoid undesirable effects , such as double burden. to have sufficient data to establish the total number of allowances for the period from 2028 to 2030 , the regulated entities holding a permit at the start of the system in 2025 should report their associated historical emissions for 2024. ### (56) to ensure effectiveness , it should be possible to monitor emissions with high certainty and at reasonable cost.


### (57) it is appropriate to introduce measures to address the potential risk of excessive price increases , which , if particularly high at the start of the buildings and road transport emissions trading , may undermine the readiness of households and individuals to invest in reducing their greenhouse gas emissions. these measures should complement the safeguards provided by the market stability reserve established by decision (eu) 2015/1814 of the european parliament and of the council64 and that became operational in 2019. while the market will continue to determine the carbon price , safeguard measures will be triggered by rules-based automatism , whereby allowances will be released from the market stability reserve only if concrete triggering conditions based on the increase in the average allowance price are met. this additional mechanism should also be highly reactive , in order to address excessive volatility due to factors other than changed market fundamentals. the measures should be adapted to different levels of excessive price increase , which will result in different degrees of the intervention. the triggering conditions should be closely monitored by the commission and the measures should be adopted by the commission as a matter of urgency when the conditions are met. this is without prejudice to any accompanying measures that member states may adopt to address adverse social impacts. ### deleted


### (58) the application of emissions trading in the buildings and road transport sectors should be monitored by the commission , including the degree of price convergence with the existing ets , and , if necessary , a review should be proposed to the european parliament and the council to improve the effectiveness , administration and practical application of emissions trading for those sectors on the basis of acquired knowledge as well as increased price convergence. the commission should be required to submit the first report on those matters by 1 january 2028. ### deleted


### (59) in order to ensure uniform conditions for the implementation of articles 3gd(3) , 12(3b) and 14(1) of directive 2003/87/ec , implementing powers should be conferred on the commission. to ensure synergies with the existing regulatory framework , the conferral of implementing powers in articles 14 and 15 of that directive should be extended to cover the sectors of road transport and buildings. those implementing powers should be exercised in accordance with regulation (eu) no 182/2011 of the european parliament and of the council65 . ### deleted


### (60) in order to adopt non-legislative acts of general application to supplement or amend certain non-essential elements of a legislative act , the power to adopt acts in accordance with article 290 of the treaty on the functioning of the european union should be delegated to the commission in respect of articles 10(4) and 10a(8) of that directive. moreover , to ensure synergies with the existing regulatory framework , the delegation in articles 10(4) and 10a(8) of directive 2003/87/ec should be extended to cover the sectors of road transport and buildings. it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level , and that those consultations be conducted in accordance with the principles laid down in the interinstitutional agreement on better law-making of 13 april 2016. in particular , to ensure equal participation in the preparation of delegated acts , the european parliament and the council receive all documents at the same time as member states' experts , and their experts systematically have access to meetings of commission expert groups dealing with the preparation of delegated acts. in accordance with the joint political declaration of 28 september 2011 of member states and the commission on explanatory documents66 , member states have undertaken to accompany , in justified cases , the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments. with regard to this directive , the legislator considers the transmission of such documents to be justified ### (60) in order to adopt non-legislative acts of general application to supplement or amend certain non-essential elements of a legislative act , the power to adopt acts in accordance with article 290 of the treaty on the functioning of the european union should be delegated to the commission in respect of articles 10(4) and 10a(8) of that directive. it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level , and that those consultations be conducted in accordance with the principles laid down in the interinstitutional agreement on better law-making of 13 april 2016. in particular , to ensure equal participation in the preparation of delegated acts , the european parliament and the council receive all documents at the same time as member states' experts , and their experts systematically have access to meetings of commission expert groups dealing with the preparation of delegated acts. in accordance with the joint political declaration of 28 september 2011 of member states and the commission on explanatory documents66 , member states have undertaken to accompany , in justified cases , the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments. with regard to this directive , the legislator considers the transmission of such documents to be justified


### (63) furthermore , in order to ensure that the level of allowances that remains in the market stability reserve after the invalidation is predictable , the invalidation of allowances in the reserve should no longer depend on the auction volumes of the previous year. the number of allowances in the reserve should , therefore , be fixed at a level of 400 million allowances , which corresponds to the lower threshold for the value of the tnac. ### (63) furthermore , in order to ensure that the level of allowances that remains in the market stability reserve after the invalidation is predictable , the invalidation of allowances in the reserve should no longer depend on the auction volumes of the previous year. the number of allowances in the reserve should , therefore , be fixed at a level of 2000 million allowances , which corresponds to the lower threshold for the value of the tnac.


### (63) furthermore , in order to ensure that the level of allowances that remains in the market stability reserve after the invalidation is predictable , the invalidation of allowances in the reserve should no longer depend on the auction volumes of the previous year. the number of allowances in the reserve should , therefore , be fixed at a level of 400 million allowances , which corresponds to the lower threshold for the value of the tnac. ### (63) furthermore , in order to ensure that the level of allowances that remains in the market stability reserve after the invalidation is predictable , the invalidation of allowances in the reserve should no longer depend on the auction volumes of the previous year. the number of allowances in the reserve should , therefore , be fixed at a level of 2 000 million allowances , which corresponds to the lower threshold for the value of the tnac.


### (66) in order to mitigate the risk of supply and demand imbalances associated with the start of emissions trading for the buildings and road transport sectors , as well as to render it more resistant to market shocks , the rule-based mechanism of the market stability reserve should be applied to those new sectors. for that reserve to be operational from the start of the system , it should be established with an initial endowment of 600 million allowances for emissions trading in the road transport and buildings sectors. the initial lower and upper thresholds , which trigger the release or intake of allowances from the reserve , should be subject to a general review clause. other elements such as the publication of the total number of allowances in circulation or the quantity of allowances released or placed in the reserve should follow the rules of the reserve for other sectors. ### deleted


### 1. this directive shall apply to the activities listed in annexes i and iii , and to the of greenhouse gases listed in annex ii. where an installation that is included in the scope of the eu ets due to the operation of combustion units with a total rated thermal input exceeding 20 mw changes its production processes to reduce its greenhouse gas emissions and no longer meets that threshold , it shall remain in the scope of the eu ets until the end of the relevant five year period referred to in article 11(1) , second subparagraph , following the change to its production process. ### 1. this directive shall apply to the activities listed in annexes i and iii , and to the of greenhouse gases listed in annex ii.


### in addition , 2 ,5 % of the total quantity of allowances between [year following the entry into force of the directive] and 2030 shall be auctioned for the modernisation fund. the beneficiary member states for this amount of allowances shall be the member states with a gdp per capita at market prices below 65 % of the union average during the period 2016 to 2018. the funds corresponding to this quantity of allowances shall be distributed in accordance with part b of annex iib. ### in addition , 4 % of the total quantity of allowances between [year following the entry into force of the directive] and 2030 shall be auctioned for the modernisation fund. the beneficiary member states for this amount of allowances shall be the member states with a gdp per capita at market prices below 65 % of the union average during the period 2016 to 2018. the funds corresponding to this quantity of allowances shall be distributed in accordance with part b of annex iib.


### paragraph 1 is amended as follows: ### deleted


### the following two subparagraphs are inserted after the second subparagraph: ### deleted


### in the case of installations covered by the obligation to conduct an energy audit under article 8(4) of directive 2012/27/eu of the european parliament and of the council(*) [article reference to be updated with the revised directive] , free allocation shall only be granted fully if the recommendations of the audit report are implemented , to the extent that the pay-back time for the relevant investments does not exceed five years and that the costs of those investments are proportionate. otherwise , the amount of free allocation shall be reduced by 25 %. the amount of free allocation shall not be reduced if an operator demonstrates that it has implemented other measures which lead to greenhouse gas emission reductions equivalent to those recommended by the audit report. the measures referred to in the first subparagraph shall be adjusted accordingly. ### in the case of entities covered by the obligation to conduct an energy audit under article 8(4) of directive 2012/27/eu of the european parliament and of the council [article reference to be updated with the revised directive] , the recommendations of the audit report need to be implemented , to the extent that the pay-back time for the relevant investments does not exceed five 3 years and that the costs of those investments are proportionate. an operator can demonstrate that it has implemented other measures which lead to greenhouse gas emission reductions equivalent to those recommended by the audit report.


### no free allocation shall be given to installations in sectors or subsectors to the extent they are covered by other measures to address the risk of carbon leakage as established by regulation (eu) …./.. [reference to cbam](**). the measures referred to in the first subparagraph shall be adjusted accordingly ### deleted


### no free allocation shall be given in relation to the production of products listed in annex i of regulation [cbam] as from the date of application of the carbon border adjustment mechanism. ### free allocation at benchmark level shall be given in relation to the production of products listed in annex i of regulation [cbam] until the full effectiveness of the cbam in tackling the carbon leakage risk both on the eu market and on export markets is assessed and positively verified. for this purpose , in 2029 the commission shall present to the european parliament and the council a report pursuant to regulation [cbam] regarding the effectiveness of the cbam. the report shall also include the selected option to address the carbon leakage risk on export markets. the report by the commission shall be accompanied by a legislative proposal to amend this article in view of gradually phasing out free allocation after 2030. allowances resulting from the reduction of free allocation shall be made available to support innovation in relation to the production of products listed in annex i of regulation [cbam] in accordance with article 10a(8).


### by way of derogation from the previous subparagraph , for the first years of operation of regulation [cbam] , the production of these products shall benefit from free allocation in reduced amounts. a factor reducing the free allocation for the production of these products shall be applied (cbam factor). the cbam factor shall be equal to 100 % for the period during the entry into force of [cbam regulation] and the end of 2025 , 90 % in 2026 and shall be reduced by 10 percentage points each year to reach 0 % by the tenth year. ### deleted


### the reduction of free allocation shall be calculated annually as the average share of the demand for free allocation for the production of products listed in annex i of regulation [cbam] compared to the calculated total free allocation demand for all installations , for the relevant period referred to in article 11 , paragraph 1. the cbam factor shall be applied. ### deleted


### allowances resulting from the reduction of free allocation shall be made available to support innovation in accordance with article 10a(8).; ### deleted


### the innovation fund shall cover the sectors listed in annex i and annex iii , including environmentally safe carbon capture and utilisation (“ccu”) that contributes substantially to mitigating climate change , as well as products substituting carbon intensive ones produced in sectors listed in annex i , and to help stimulate the construction and operation of projects aimed at the environmentally safe capture and geological storage (“ccs”) of co2 , as well as of innovative renewable energy and energy storage technologies; in geographically balanced locations. the innovation fund may also support break-through innovative technologies and infrastructure to decarbonise the maritime sector and for the production of low- and zero-carbon fuels in aviation , rail and road transport. special attention shall be given to projects in sectors covered by the [cbam regulation] to support innovation in low carbon technologies , ccu , ccs , renewable energy and energy storage , in a way that contributes to mitigating climate change. ### the innovation fund shall cover the sectors listed in annex i and annex iii , including environmentally safe carbon capture and utilisation (“ccu”) that contributes substantially to mitigating climate change , as well as products substituting carbon intensive ones produced in sectors listed in annex i , and to help stimulate the construction and operation of projects aimed at the environmentally safe capture and geological storage (“ccs”) of co2 , as well as of innovative renewable or low carbon energy and energy storage technologies; in geographically balanced locations. the innovation fund may also support break-through innovative technologies and infrastructure to decarbonise the maritime sector and for the production of low- and zero-carbon fuels in aviation , rail and road transport. special attention shall be given to projects in sectors covered by the [cbam regulation] to support innovation in low carbon technologies , ccu , ccs , renewable energy and energy storage , in a way that contributes to mitigating climate change.


### projects in the territory of all member states , including small-scale projects , shall be eligible. technologies receiving support shall be innovative and not yet commercially viable at a similar scale without support but shall represent breakthrough solutions or be sufficiently mature for application at pre-commercial scale. ### in accordance with the principle of geographical balance projects in the territory of all member states , including small-scale projects , shall be eligible. technologies receiving support shall be innovative and not yet commercially viable at a similar scale without support but shall represent breakthrough solutions or be sufficiently mature for application at pre-commercial scale.


### the commission shall ensure that the allowances destined for the innovation fund are auctioned in accordance with the principles and modalities laid down in article 10(4). proceeds from the auctioning shall constitute external assigned revenue in accordance with article 21(5) of the financial regulation. budgetary commitments for actions extending over more than one financial year may be broken down over several years into annual instalments. ### the commission shall ensure that the allowances destined for the innovation fund are auctioned in accordance with the principles and modalities laid down in article 10(4) , as well as with the principle of geographical balance. proceeds from the auctioning shall constitute external assigned revenue in accordance with article 21(5) of the financial regulation. budgetary commitments for actions extending over more than one financial year may be broken down over several years into annual instalments.


### 365 million allowances from the quantity which could otherwise be allocated for free pursuant to this article , and 85 million allowances from the quantity which could otherwise be auctioned pursuant to article 10 , as well as the allowances resulting from the reduction of free allocation referred to in article 10a(1a) , shall be made available to a fund with the objective of supporting innovation in low-carbon technologies and processes , and contribute to zero pollution objectives (the ‘innovation fund’). allowances that are not issued to aircraft operators due to the closure of aircraft operators and which are not necessary to cover any shortfall in surrenders by those operators , shall also be used for innovation support as referred to in the first subparagraph. ### 365 million allowances from the quantity which could otherwise be allocated for free pursuant to this article , and 85 million allowances from the quantity which could otherwise be auctioned pursuant to article 10 , as well as the allowances resulting from the reduction of free allocation referred to in article 10a(1a) , shall be made available to a fund with the objective of supporting innovation in low-carbon technologies and processes , and contribute to zero pollution objectives (the ‘innovation fund’). ). special attention should be given to projects developed by the industry to improve their production processes. allowances that are not issued to aircraft operators due to the closure of aircraft operators and which are not necessary to cover any shortfall in surrenders by those operators , shall also be used for innovation support as referred to in the first subparagraph.


### projects in the territory of all member states , including small-scale projects , shall be eligible. technologies receiving support shall be innovative and not yet commercially viable at a similar scale without support but shall represent breakthrough solutions or be sufficiently mature for application at pre-commercial scale. ### in accordance with the principle of geographical balance , projects in the territory of all member states , including small-scale projects , shall be eligible. technologies receiving support shall be innovative and not yet commercially viable at a similar scale without support but shall represent breakthrough solutions or be sufficiently mature for application at pre-commercial scale.


### the investments supported shall be consistent with the aims of this directive , as well as the objectives of the communication from the commission of 11 december 2019 on the european green deal (*) and regulation (eu) 2021/1119 of the european parliament and of the council (**) and the long-term objectives as expressed in the paris agreement. no support from the modernisation fund shall be provided to energy generation facilities that use fossil fuels.”; ### the investments supported shall be consistent with the aims of this directive , as well as the objectives of the communication from the commission of 11 december 2019 on the european green deal (*) and regulation (eu) 2021/1119 of the european parliament and of the council (**) and the long-term objectives as expressed in the paris agreement. no support from the modernisation fund shall be provided to energy generation facilities that use solid fossil fuels.”;


### the generation and use of electricity from renewable sources; ### the generation and use of electricity from renewable sources and from low-carbon fuels where it is replacing a more carbon-intensive system;


### heating and cooling from renewable sources; ### heating and cooling from renewable sources and from low-carbon fuels when it is replacing a more carbon-intensive system ;


### heating and cooling from renewable sources; ### heating and cooling from renewable sources and from low-carbon fuels when it is replacing amore carbon-intensive system;


### [...] ### deleted


### in order to provide further incentives for reducing greenhouse gas emissions and improving energy efficiency , the determined union-wide ex-ante benchmarks shall be reviewed before the period from 2026 to 2030 in view of potentially modifying the definitions and system boundaries of existing product benchmarks.; ### in order to provide further incentives for reducing greenhouse gas emissions and improving energy efficiency , the commission needs to conduct a thorough impact assessment to determine if union-wide ex-ante benchmarks shall be reviewed before the period from 2026 to 2030 in view of potentially modifying the definitions and system boundaries of existing product benchmarks.


### where the annual reduction rate exceeds 2 ,5 % or is below 0 ,2 % , the benchmark values for the period from 2026 to 2030 shall be the benchmark values applicable in the period from 2013 to 2020 reduced by whichever of those two percentage rates is relevant , in respect of each year between 2008 and 2028.; ### where the annual reduction rate exceeds 1 ,6 % or is below 0 ,2 % , the benchmark values for the period from 2026 to 2030 shall be the benchmark values applicable in the period from 2013 to 2020 reduced by whichever of those two percentage rates is relevant , in respect of each year between 2008 and 2028.;


### where the annual reduction rate exceeds 2 ,5 % or is below 0 ,2 % , the benchmark values for the period from 2026 to 2030 shall be the benchmark values applicable in the period from 2013 to 2020 reduced by whichever of those two percentage rates is relevant , in respect of each year between 2008 and 2028.; ### where the annual reduction rate exceeds 1 ,6 % or is below 0 ,2 % , the benchmark values for the period from 2026 to 2030 shall be the benchmark values applicable in the period from 2013 to 2020 reduced by whichever of those two percentage rates is relevant , in respect of each year between 2008 and 2028.


### measures intended to improve energy efficiency , district heating systems and insulation , or to provide financial support in order to address social aspects in lower- and middle-income households , including by reducing distortive taxes;; ### measures intended to improve energy efficiency , efficient and renewable heating and cooling systems , district heating systems and insulation , or to provide financial support in order to address social aspects in lower- and middle-income households , including by reducing distortive taxes;


### (8) those amendments have differing economic and social impacts on the different sectors of the economy , on the citizens , and the member states. in particular , the inclusion of greenhouse gas emissions from buildings and road transport into the scope of directive 2003/87/ec of the european parliament and the council31 should provide an additional economic incentive to invest into the reduction of fossil fuel consumption and thereby accelerate the reduction of greenhouse gas emissions. combined with other measures , this should , in the medium to long term , reduce the costs for buildings and road transport , and provide new opportunities for job creation and investment. ### (8) those amendments have differing economic and social impacts on the different sectors of the economy , on the citizens , and the member states. combined with other measures , this should , in the medium to long term , provide necessary resources for member states to achieve the increased climate targets and provide new opportunities for job creation and investment.


### (9) however , resources are needed to finance those investments. in addition , before they have taken place , the cost supported by households and transport users for heating , cooling and cooking , as well as for road transport , is likely to increase as fuel suppliers subject to the obligations under the emission trading for buildings and road transport pass on costs on carbon to the consumers. ### (9) however , resources are needed to finance investments related to the increased climate ambition.


### (11) therefore , a part of the revenues generated by the inclusion of building and road transport into the scope of directive 2003/87/ec should be used to address the social impacts arising from that inclusion , for the transition to be just and inclusive , leaving no one behind. ### deleted


### (13) a social climate (‘the fund’) should therefore be established to provide funds to the member states to support their policies to address the social impacts of the emissions trading for buildings and road transport on vulnerable households , vulnerable micro-enterprises and vulnerable transport users. this should be achieved notably through temporary income support and measures and investments intended to reduce reliance on fossil fuels through increased energy efficiency of buildings , decarbonisation of heating and cooling of buildings , including the integration of energy from renewable sources , and granting improved access to zero- and low-emission mobility and transport to the benefit of vulnerable households , vulnerable micro-enterprises and vulnerable transport users. ### (13) a social climate (‘the fund’) should therefore be established to provide funds to the member states to support their policies to address the social impacts of the increased climate ambition. this should be achieved notably through temporary income support and measures and investments intended to reduce reliance on fossil fuels through increased energy efficiency of buildings , decarbonisation of heating and cooling of buildings , including the integration of energy from renewable sources , and granting improved access to zero- and low-emission mobility and transport to the benefit of vulnerable households , vulnerable micro-enterprises and vulnerable transport users.


### (16) ensuring that the measures and investments are particularly targeted towards energy poor or vulnerable households , vulnerable micro-enterprises and vulnerable transport users is key for a just transition towards climate neutrality. support measures to promote reductions in greenhouse gas emissions should help member states to address the social impacts arising from the emissions trading for the sectors of buildings and road transport. ### (16) ensuring that the measures and investments are particularly targeted towards energy poor or vulnerable households , vulnerable micro-enterprises and vulnerable transport users is key for a just transition towards climate neutrality. support measures to promote reductions in greenhouse gas emissions should help member states to address the social impacts arising from the increased climate ambition.


### (17) pending the impact of those investments on reducing costs and emissions , well targeted direct income support for the most vulnerable would help the just transition. such support should be understood to be a temporary measure accompanying the decarbonisation of the housing and transport sectors. it would not be permanent as it does not address the root causes of energy and transport poverty. such support should only concern direct impacts of the inclusion of building and road transport into the scope of directive 2003/87/ec , not electricity or heating costs related to the inclusion of power and heat production in the scope of that directive. eligibility for such direct income support should be limited in time. ### (17) pending the impact of those investments on reducing costs and emissions , well targeted direct income support for the most vulnerable would help the just transition. such support should be understood to be a temporary measure accompanying the decarbonisation of the housing and transport sectors. it would not be permanent as it does not address the root causes of energy and transport poverty. such support should concern impacts deriving from the increased climate ambition. eligibility for such direct income support should be limited in time.


### (18) taking into account the importance of tackling climate change in line with paris agreement commitments , and the commitment to the united nations sustainable development goals , the actions under this regulation should contribute to the achievement of the target that 30% of all expenditure under the 2021-2027 multiannual financial framework should be spent on mainstreaming climate objectives and should contribute to the ambition of providing 10% of annual spending to biodiversity objectives in 2026 and 2027 , while considering the existing overlaps between climate and biodiversity goals. for this purpose , the methodology set out in annex ii of regulation (eu) 2021/1060 of the european parliament and of the council33 should be used to tag the expenditures of the fund. the fund should support activities that fully respect the climate and environmental standards and priorities of the union and comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852 of the european parliament and of the council34 . only such measures and investments should be included in the plans. direct income support measures should as a rule be considered as having an insignificant foreseeable impact on environmental objectives , and as such be considered compliant with the principle of ‘do no significant harm’. the commission intends to issue technical guidance to the member states well ahead of the preparation of the plans. the guidance will explain how the measures and investments must comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852. the commission intends to present in 2021 a proposal for a council recommendation on how to address the social aspects of the green transition. ### (18) taking into account the importance of tackling climate change in line with paris agreement commitments , and the commitment to the united nations sustainable development goals , the actions under this regulation should contribute to the achievement of the target that 30% of all expenditure under the 2021-2027 multiannual financial framework should be spent on mainstreaming climate objectives and should contribute to the ambition of providing 10% of annual spending to biodiversity objectives in 2026 and 2027 , while considering the existing overlaps between climate and biodiversity goals. for this purpose , the methodology set out in annex ii of regulation (eu) 2021/1060 of the european parliament and of the council33 should be used to tag the expenditures of the fund. the fund should support activities that fully respect the climate and environmental standards and priorities of the union and comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852 of the european parliament and of the council34. only such measures and investments should be included in the plans. direct income support measures should as a rule be considered as having an insignificant foreseeable impact on environmental objectives , and as such be considered compliant with the principle of ‘do no significant harm’. replacing coal-fired boilers with less emitting gas-boilers or hybrid heat pumps as the most cost-effective method of reducing emissions in the group of poorest households in certain member states should also be considered as not having a significant impact on these objectives and deemed compliant with the aforementioned principle.


### (18) taking into account the importance of tackling climate change in line with paris agreement commitments , and the commitment to the united nations sustainable development goals , the actions under this regulation should contribute to the achievement of the target that 30% of all expenditure under the 2021-2027 multiannual financial framework should be spent on mainstreaming climate objectives and should contribute to the ambition of providing 10% of annual spending to biodiversity objectives in 2026 and 2027 , while considering the existing overlaps between climate and biodiversity goals. for this purpose , the methodology set out in annex ii of regulation (eu) 2021/1060 of the european parliament and of the council33 should be used to tag the expenditures of the fund. the fund should support activities that fully respect the climate and environmental standards and priorities of the union and comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852 of the european parliament and of the council34 . only such measures and investments should be included in the plans. direct income support measures should as a rule be considered as having an insignificant foreseeable impact on environmental objectives , and as such be considered compliant with the principle of ‘do no significant harm’. the commission intends to issue technical guidance to the member states well ahead of the preparation of the plans. the guidance will explain how the measures and investments must comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852. the commission intends to present in 2021 a proposal for a council recommendation on how to address the social aspects of the green transition. ### (18) taking into account the importance of tackling climate change in line with paris agreement commitments , and the commitment to the united nations sustainable development goals , the actions under this regulation should contribute to the achievement of the target that 30% of all expenditure under the 2021-2027 multiannual financial framework should be spent on mainstreaming climate objectives and should contribute to the ambition of providing 10% of annual spending to biodiversity objectives in 2026 and 2027 , while considering the existing overlaps between climate and biodiversity goals. for this purpose , the methodology set out in annex ii of regulation (eu) 2021/1060 of the european parliament and of the council33 should be used to tag the expenditures of the fund. the fund should support activities that fully respect the climate and environmental standards and priorities of the union and comply with the principle of ‘do no significant harm’ within the meaning of article 17 of regulation (eu) 2020/852 of the european parliament and of the council34 . only such measures and investments should be included in the plans. direct income support measures should as a rule be considered as having an insignificant foreseeable impact on environmental objectives , and as such be considered compliant with the principle of ‘do no significant harm’. replacing coal-fired boilers with less emitting gas-boilers or hybrid heat pumps as the most cost-effective method of reducing emissions in the group of poorest households in certain member states should also be considered as not having a significant impact on these objectives and deemed compliant with the aforementioned principle.


### (19) women are particularly affected by carbon pricing as they represent 85% of single parent families. single parent families have a particularly high risk of child poverty. gender equality and equal opportunities for all , and the mainstreaming of those objectives , as well as questions of accessibility for persons with disabilities should be taken into account and promoted throughout the preparation and implementation of plans to ensure no one is left behind. ### (19) women are particularly affected by carbon pricing as they represent 85% of single parent families. single parent families and large families have a particularly high risk of child poverty. gender equality and equal opportunities for all , and the mainstreaming of those objectives , as well as questions of accessibility for persons with disabilities should be taken into account and promoted throughout the preparation and implementation of plans to ensure no one is left behind.