Special Report Spending at least one euro 
in every five from the  
EU budget on climate 
action: ambitious work 
underway, but at serious 
risk of falling shortEN 2016  NO 31
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Spending at least one euro 
in every five from the  
EU budget on climate 
action: ambitious work 
underway, but at serious 
risk of falling short
(pursuant to Article 287(4), second subparagraph, TFEU)Special ReportEN 2016  NO 31
02
 Audit team
The ECA’s special reports set out the results of its performance and compliance audits of specific budgetary areas or 
management topics. The ECA selects and designs these audit tasks to be of maximum impact by considering the risks 
to performance or compliance, the level of income or spending involved, forthcoming developments and political 
and public interest.
This report was adopted by Audit Chamber I, which specialises in the sustainable use of natural resources. The audit 
was led by ECA Member Phil Wynn Owen, Dean of Chamber I, along with Kersti Kaljulaid, former ECA Member. The 
head of task was Bertrand Tanguy, with Tomasz Plebanowicz as deputy head of task. The audit team comprised 
Katharina Bryan, Peeter Latti, Alain Vansilliette, Angharad Weatherall, Armando Do Jogo, Michał Machowski,  
Vivi Niemenmaa, Olivier Prigent, Carlos Sanchez Rivero, Frédéric Soblet, Klaus Stern, Dana Moraru and  
Maria Ploumaki. Hannah Critoph assisted with drafting the report.
From left to right: P . Wynn Owen, H. Critoph, F. Soblet, K. Bryan, A. Do Jogo, B. Tanguy, O. Prigent,  
T. Plebanowicz, C. Sanchez Rivero, A. Weatherall, M. Machowski, V. Niemenmaa, K. Kaljulaid.
03
 Contents
Paragraph
 Glossary and abbreviations
I-VIII  Executive summary
1-14  Introduction
15-23  Audit scope and approach
24-90  Observations
24-64  Overall progress has been made but there is a serious risk that the 20 % target will not be met
25-33  A collective commitment, with some funding instruments expected to contribute more than 20 %
34-38  The Commission’s tracking method builds on international methodologies yet has weaknesses
39-48  Overall progress made towards reaching the target, but reporting only partially reliable and not focused 
enough on results
49-51  There is a serious risk that the target will not be met
52-54  Assumptions concerning the contribution from agricultural direct payments to the climate action target 
lack sound justification
55-59  Applying a different set of tracking coefficients based on internationally established methodologies to the 
European Agricultural Fund for Rural Development would reduce climate funding by 40 %
60-64 Prompt action required as contribution from research funding is falling significantly behind
65-90  More and better-focused climate action funding in some European Structural and Investment 
Funds, but largely business as usual in others
68-75  Higher climate allocations in the ERDF and CF demonstrate that better focus on climate can be achieved
76-79  The European Social Fund’s potential contribution to climate action — more could be achieved
04 Contents 
80-87  No significant change in the common agricultural policy spending, although good practices exist in rural 
development
88-90  Very limited increased focus on climate action in the European Maritime and Fisheries Fund
91-109  Conclusions and recommendations
 Annex  — Matrix of coefficients used by the ECA in the field of the rural development policy
 Reply of the Commission
05
 Glossary and abbreviations
Agricultural direct payments : Direct payments are granted to farmers in order to support their incomes and 
also to remunerate them for their production of public goods through greening, and in combination with 
cross-compliance.
Climate action : Actions tackling climate change (referred to as ‘climate action’ in this report).
Climate mainstreaming : Rather than creating a specific dedicated funding instrument, mainstreaming integrates 
climate action into EU policies, instruments, programmes or funds.
Climate tracking : Monitoring the progress towards reaching the 20 % target by measuring the financial 
contribution of funds to this target.
Cohesion Fund (CF) : The Cohesion Fund aims to strengthen the economic, social and territorial cohesion of the 
Union in the interest of promoting sustainable development. The CF focuses on investments in environment and 
transport, including areas related to sustainable development and energy which present environmental benefits.
Cross-compliance : System which links most common agricultural policy payments to farmers’ compliance with 
basic rules for the environment, food safety, animal health, and welfare, and good agricultural and environmental 
conditions of land.
EU climate coefficients : Weightings given to EU funds going to projects, measures or actions. Coefficients are 
based on the OECD Rio markers methodology. EU climate coefficients bear the weightings of 0 %, 40 % and 100 % 
depending on the action’s contribution to climate change mitigation or adaptation.
European Agricultural Fund for Rural Development (EAFRD) : The European Agricultural Fund for Rural 
Development is aimed to help the rural areas of the EU to meet a wide range of economic, environmental and social 
challenges.
European Agricultural Guarantee Fund (EAGF) : The European Agricultural Guarantee Fund provides funding for 
direct payment to farmers, for the management of the agricultural markets and for a number of other purposes 
such as veterinary and plant health measures, food programmes and information activities.
European Maritime and Fisheries Fund (EMFF) : The European Maritime and Fisheries Fund is the fund for the 
EU’s maritime and fisheries policies for 2014-2020. It aims to help fishermen in the transition to sustainable fishing 
and coastal communities in diversifying their economies. It also finances projects that create new jobs and improve 
quality of life along European coasts.
European Regional Development Fund (ERDF) : The European Regional Development Fund is aimed at reinforcing 
economic and social cohesion within the European Union by redressing the main regional imbalances. This is 
achieved through financial support for the creation of infrastructure and productive job-creating investment, 
mainly for businesses.
European Social Fund (ESF) : The aim of the European Social Fund is to strengthen economic and social cohesion 
within the European Union by improving employment and job opportunities, mainly through training measures, 
encouraging a higher level of employment and the creation of more and better jobs.
06 Glossary and abbreviations 
European Structural and Investment Funds (ESIF) : The European Structural and Investment Funds is a group 
of five separate funds that aim to reduce regional imbalances across the EU, with policy frameworks set for the 
7-year multiannual financial framework budgetary period. The five funds are: the European Regional Development 
Fund (ERDF); the European Social Fund (ESF); the Cohesion Fund (CF); the European Agricultural Fund for Rural 
Development (EAFRD); and the European Maritime and Fisheries Fund (EMFF).
Focus areas : The European Union has identified six priorities for Rural Development. These are broken down into 18 
‘focus areas’ in order to better detail the aims of each priority and to facilitate programming.
Greening : Component of agricultural direct payments which supports agricultural practices beneficial for the 
climate and the environment. Those practices include crop diversification, the maintenance of permanent grassland 
and the establishment of ecological infrastructure.
Horizon 2020 : EU’s research and innovation programme for 2014-2020.
LIFE Programme : EU’s programme supporting environmental, nature conservation and climate action projects 
throughout the EU, currently for 2014-2020.
Measure : In the rural development programmes, it means a set of operations or projects contributing to one or 
more of the Union priorities for rural development.
Programming documents : Programmes breaking down the overarching strategic objectives set in the partnership 
agreements between the European Commission and individual Member States into investment priorities, specific 
objectives and, further down, into concrete action. In rural development policy, they are called rural development 
programmes. For the other European Structural and Investment Funds, they are called operational programmes.
Rio markers : Codes employed by the OECD to track funds targeted at climate change mitigation and adaptation.
Union priorities : Objectives set for rural development, which contribute to the Europe 2020 strategy for smart, 
sustainable and inclusive growth. There are six union priorities in the fields of agriculture, forestry and rural areas 
which mainly concern fostering innovation and competitiveness, restoring and enhancing ecosystems, supporting 
the shift towards a low carbon and climate resilient economy, and promoting social inclusion and poverty 
reduction.
07
 Executive summary
I
Climate change is one of the greatest challenges facing the European Union (EU) and governments across the globe. 
In order to respond to climate change and the associated substantial investment needs, the EU has agreed that at 
least 20 % of its budget for 2014-2020 — one euro in every five — should be spent on climate-related action. This 
objective forms part of the EU’s leadership in climate action.
II
The target to spend one euro in every five on climate-related action is to be achieved by incorporating or ‘main -
streaming’ climate action within different EU funding instruments. This means that, instead of creating one dedi -
cated funding instrument, the objective is to be met through incorporating climate concerns into policy areas and 
the corresponding funds of the EU budget.
III
We sought to determine whether the target to spend at least 20 % of the EU budget on climate-related action was 
likely to be met and whether the approach employed was likely to add value, by leading to more and better-focused 
funding on climate action.
IV
We found that ambitious work was underway and that, overall, progress had been made towards reaching the 
target. However, there is a serious risk that the 20 % target will not be met without more effort to tackle climate 
change. The implementation of the target has led to more, and better-focused, climate action funding in the Euro -
pean Regional Development Fund and the Cohesion Fund. In the European Social Fund, and in the areas of agricul -
ture, rural development and fisheries, however, there has been no significant shift towards climate action and not 
all potential opportunities for financing climate-related action have been fully explored.
V
According to Commission figures, the share of funding dedicated to climate action has averaged 17.6 % between 
2014 and 2016. Overall, the Commission estimates that 18.9 % would be spent on climate action, thereby falling 
short of the 20 % objective.
08 Executive summary 
VI
We estimated that the rate of climate funding would need to be increased to an average of 22 % across the remain -
ing years of the current programming period, i.e. for 2017 to 2020, to reach the overall target of 20 % by the end of 
2020. There are serious risks to achieving this in the main contributing areas of agriculture, rural development and 
research. If calculated in accordance with internationally established methodologies for assessing levels of climate 
finance, the assessed contribution from agriculture and rural development would be reduced by up to approxi -
mately 33 billion euros. As regards research, the Horizon 2020 programme has fallen behind its target to allocate 
35 % to climate action, with its contribution currently standing at 24 %. The Commission has no detailed action plan 
setting out how it intends to catch up.
VII
The Commission’s approach to assessing levels of climate action funding focuses on identifying planned expendi -
ture. However, plans will not necessarily translate into actual spending, and this approach will not provide any com -
prehensive information on the results achieved. In addition, the tracking method does not reflect the full financial 
effects of EU spending on climate action through financial instruments, nor does it distinguish between funding for 
mitigation and adaptation measures.
VIII
Our main recommendations are for a robust multi-annual consolidation exercise and a comprehensive reporting 
framework to be set up, and for there to be an assessment of climate change needs. We also recommend that over -
estimates be corrected, that action plans be drawn up for areas that have fallen behind, and that actual spending 
and results be monitored. Finally, we recommend the exploration of all potential opportunities to ensure a further, 
real shift towards climate action.
09
 Introduction
01 
Climate change is one of the greatest challenges facing the European Union 
(EU) and governments across the globe. The Earth’s climate is changing due 
to a higher concentration of certain gases, known as greenhouse gases, in the 
atmosphere. These gases act as a blanket, trapping heat and so warming the 
Earth’s surface in what is known as the ‘greenhouse effect’1. Around 9 % of the 
greenhouse gases emitted worldwide in 2012 came from the EU.
Two sides of climate action: mitigation and adaptation 
to climate change
02 
There are two complementary policy responses to climate change: mitigation 
and adaptation. The first approach, mitigation , seeks to address the causes of 
climate change by reducing or limiting the emission of greenhouse gases, primar -
ily through reducing energy consumption, improving energy efficiency, increas -
ing the share of renewable energy. This approach also includes efforts to protect 
and enhance means of greenhouse gas sequestration2, as well as to improve 
forestry and agricultural practices for preserving and sequestering carbon in soils 
and forests.
03 
The importance of mitigation action is shown in Figure 1  below. It shows pro -
jected surface temperature changes for the 21st century relative to the average 
temperatures during the late 20th century for the scenario of business as usual 
carbon emissions3.
04 
The second approach for addressing climate change, adaptation , aims at antici -
pating the adverse and, where existing, positive effects of the climate change 
that will happen and taking appropriate action to prevent or minimise the poten -
tial damage. Despite the implementation of mitigation action, the Earth’s tem -
perature will continue to increase until at least 2040, irrespective of the green -
house gas emission scenario considered4. This means that adaptation measures 
will be necessary even in the best-case scenario.1 See IPCC, [Core Writing Team, 
R.K. Pachauri and L.A. Meyer 
(eds.)], ‘Climate Change 2014: 
Synthesis Report. Contribution 
of Working Groups I, II and III 
to the Fifth Assessment Report 
of the Intergovernmental 
Panel on Climate Change’, 
Geneva, Switzerland, 2014, 
p. 151.
2 Sequestration is the process of 
capturing and storing 
greenhouse gases on 
a long-term.
3 ‘Business-as-usual’ baseline 
case assumes that future 
development trends follow 
those of the past and no 
changes in policies will take 
place. See http://www.ipcc.ch/
ipccreports/tar/wg3/index.
php?idp=286
4 Seventh Environmental Action 
Programme (Decision No 
1386/2013/EU of the European 
Parliament and of the Council 
of 20 November 2013) and 
IPCC 2013.
10 Introduction Figure 1Projected surface temperature changes in the EU for 2071-2100 
The figure shows projected changes in the annual mean temperature for 2071-2100, compared with 1971-2000 (business as usual carbon  
emissions). Projected changes are based on the average of a multi-model ensemble using a high emissions scenario established by the  
Intergovernmental Panel on Climate Change.
Source:  European Environmental Agency.
(http://www.eea.europa.eu/data-and-maps/figures/projected-change-in-annual-mean )
4
0
°
3
0
°
2
0
°
1
0
°
0
°
5
0
°
4
0
°
60o°C
< 3
3 to 3.5 3.5 to 4 4 to 4.5 4.5 to 5 5 to 5.5 5.5 to 6> 6
11 Introduction 
05 
Adaptation measures are dependent on the impacts of climate change. Such 
impacts vary significantly according to geography. They include, for example, 
floods, rising sea levels, drought and desertification, and a loss of biodiversity 
(see Figure 2 ).Figure 2
Source:  European Environmental Agency, 2012.Key observed and projected impacts of climate change for the main regions in 
Europe

12 Introduction 
06 
The International Climate Change Agreement, adopted in Paris at the end of 2015, 
is the first binding universal agreement to fight against climate change5. It estab -
lishes a transparency framework for tracking the progress of countries towards 
achieving their individual greenhouse gas reduction targets6.
07 
Even before the Paris Agreement was adopted, the EU had already committed 
itself to cutting its emissions by at least 20 % compared with 1990 levels by 2020 
and by 40 % by 2030. It has also set a long-term goal for 2050 (see Box 1 ). Accord -
ing to the latest estimates7, the total EU greenhouse gas emissions in 2014 were 
around 24 % below 1990 levels, although this was partly owing to the impact of 
the economic crisis.
The EU’s commitment to spend 20 % of its budget on 
climate action
08 
In order to respond to the substantial investment needs associated with climate 
change, the EU has agreed that at least 20 % of its budget for 2014-2020 — one 
euro in every five — should be spent on climate-related action8. This objective 
forms part of the EU’s leadership in climate action, which the Commission regards 
as indispensable for the 2015 International Climate Change Agreement to suc -
ceed9. According to our estimates, the target corresponds to a pledge of approxi -
mately 212 billion euros10. According to the Commission, this commitment would 
triple the estimated indicative share of 6 % to 7 % of climate-related expenditure 
in the EU 2007-2013 budget11.
09 
The Commission decided to incorporate or ‘mainstream’ climate action within all 
policy fields including different EU funding instruments. This included setting 
a target to spend one euro in every five on climate-related action for the EU’s 
2014-2020 multiannual financial framework12. This means that instead of creating 
one dedicated funding instrument, the objectives linked to climate change miti -
gation and adaptation are to be achieved through incorporating related concerns 
into policy areas and the corresponding funds of the EU budget. This might be 
achieved by spending more on existing climate-related programmes, adapting 
existing programmes, or creating new programmes and features such as selec -
tion criteria which better target climate change-related topics.5 The Paris Agreement will enter 
into force on the 30th day 
after the date on which at least 
55 parties to the Convention, 
accounting in total for at least 
an estimated 55 % of the total 
global greenhouse gas 
emissions, have deposited 
their instruments of 
ratification, acceptance, 
approval or accession with the 
depositary. The fulfilment of 
the conditions took place on 
5 October 2016 when the EU 
deposited its notice of 
ratification. The agreement 
will enter into force on 
4 November 2016. By 
17 October 2016, 81 out of 197 
Parties to the Convention had 
ratified the Agreement ( http://
unfccc.int/paris_agreement/
items/9444.php ).
6 Article 13 of the Paris 
Agreement in the Report of 
the Conference of the Parties 
on its twenty-first session, held 
in Paris from 30 November to 
13 December 2015, dated 
29 January 2016 and 
referenced FCCC/CP/2015/10/
add.1.
7 http://www.eea.europa.eu/
publications/
european-union-greenhouse-
gas-inventory-2016
8 COM(2011) 500 final of 29 June 
2011, ‘A Budget for Europe 
2020’, Part II, p. 13.
9 COM(2013) 167 final of 
26 March 2013 ’The 2015 
International Climate Change 
Agreement: Shaping 
international climate policy 
beyond 2020‘.
10 Estimated as 20 % of 
1 062.6 billion euros, which 
corresponds to the total 
commitments at current prices 
of the 2014-2020 multiannual 
financial framework.
11 See the Directorate-General 
for Climate Action’s Annual 
Activity Report for 2014, p. 16.
12 This target does not include 
areas outside the EU budget, 
for example, the lending 
operations of the European 
Investment Bank. The 
European Investment Bank 
has set itself a target of 
committing a minimum of 
25 % of its total lending for 
climate action and a 35 % 
climate action share in its 
investments in developing 
countries.
13 Introduction 
Roles and responsibilities in mainstreaming climate 
action
10 
Each Commission directorate-general is responsible for incorporating climate 
action into its individual spending programmes, and for its implementation, in 
cooperation with the Member States where appropriate.
11 
Directorate-General Climate Action provides knowledge and guidance on climate 
action to other Commission directorate-generals.EU targets for reducing greenhouse gas emissions
 οBy 202013:
— 20 % reduction in greenhouse gases emissions (from 1990 levels);
— 20 % share of renewable energy in energy consumption;
— 20 % gains in energy efficiency.
 οBy 203014:
— at least 40 % reduction in greenhouse gases emissions (from 1990 levels);
— at least 27 % share of renewable energy in energy consumption;
— indicative target to improve energy efficiency by at least 27 % compared to projections of future 
energy consumption15.
 οBy 205016, the EU intends to reduce its greenhouse gas emissions by between 80 % and 95 % compared to 
1990 comprising all main sectors.
13 COM(2008) 30 final of 23 January 2008, ‘20 20 by 2020 Europe’s climate change opportunity’ (2020 Climate and Energy Package).
14 COM(2014) 15 final of 22 January 2014, ‘A policy framework for climate and energy in the period from 2020 to 2030’ (2030 Climate and Energy 
Framework).
15 The 2030 energy efficiency target will be reviewed in 2020 having in mind a 30 % target.
16 COM(2011) 112 final of 8 March 2011, ‘A roadmap for moving to a competitive low-carbon economy in 2050’. The European Council and the 
European Parliament endorsed this approach proposed by the Commission in February 2013 and March 2013 respectively.Box 1
14 Introduction 
12 
Directorate-General Budget coordinates the preparatory work for the alloca -
tion of resources to climate in the budgets, and collects and presents the related 
information. The Secretariat-General of the Commission plays a coordinating role, 
ensuring the overall consistency of the EU actions, which includes the main -
streaming policies.
13 
The exact responsibilities of the Commission and Member States vary depending 
on whether a policy area is under shared management17 or is directly managed 
by the Commission.  In the latter management mode, the Commission itself man -
ages programmes, including most of Horizon 202018 and the LIFE Programme19.
14 
Under shared management, the Commission appraises, discusses objectives, 
actions and choice of indicators and approves the programming documents 
prepared and submitted by the Member States. The Member States are respon -
sible for designing, implementing and monitoring the measures included in the 
programmes. The European Structural and Investment Funds’ (ESIF) programmes 
include an indicative amount of support envisaged for fulfilling the climate 
change objective, whereas with agricultural direct payments, the Commission 
calculates this amount centrally.
The context of climate mainstreaming in brief
 οClimate action refers to measures both to reduce greenhouse gas emissions (mitigation) and 
to adapt to the effects of global warming (adaptation). Both types of measure are necessary 
and complementary.
 οThe EU is a key player in global climate action, and its actions contributed to achieving the 
ambitious international agreement concluded in Paris.
 οMainstreaming climate action into existing policies and tracking the climate-relevant spend -
ing is a process involving cooperation between the Commission and the Member States.
 οSetting an objective to spend one euro in every five of the 2014-2020 EU budget on climate 
action is one way in which the EU is seeking to increase the climate relevance of EU spending.
 οThe approach aims to take account of different EU policies and programmes, and of geo -
graphical specificities.17 Areas under shared 
management include, most 
notably, the European 
Structural and Investment 
Funds and direct payments of 
the common agricultural 
policy.
18 The Horizon 2020  research 
programme is managed by 
Directorate-General Research. 
Some 25 % of the Horizon 
2020 budget is managed 
directly by the Commission, 
while 75 % is managed by 
implementing bodies.
19 The  LIFE  spending 
programme is managed 
directly by Directorate-
General Environment (for the 
sub-programme for 
Environment) and by 
Directorate-General Climate 
Action (the sub-programme 
for Climate Action), although 
implementation tasks for the 
management of projects are 
delegated to an agency.
15
 Audit scope and approach
15 
We sought to determine whether the target to spend at least 20 % of the EU 
budget on climate-related action is likely to be met and whether the approach 
employed is likely to add value.
16 
More specifically, we sought to answer the following questions:
— Is the action underway on track to meet the overall target?
— Is the target likely to add value by leading to more and better-focused fund -
ing on climate action?
17 
We established audit criteria concerning the design, implementation, monitor -
ing and evaluation of EU expenditure for climate change mitigation and adapta -
tion. The criteria were developed from EU policy papers, legislation, Commission 
guidelines, Council decisions, studies and other publications. We also consulted 
experts from the Organisation for Economic Cooperation and Development and 
the European Investment Bank (EIB) on mainstreaming and tracking methods, 
and carried out a review of existing literature.
18 
Figure 3  provides an overview of the audited budget areas and auditees. The 
audited areas of Horizon 2020, cohesion policy, the common agricultural policy, 
fisheries policy and the LIFE Programme represent around 78 % of the commit -
ments planned in the 2014-2020 multiannual financial framework and around 
85 % of the climate funding planned for the period.
16 Audit scope and approach 
19 
Our audit work focused on the overall system established at Commission level 
and in two areas of shared management: cohesion policy and the common 
agricultural policy. Together these areas account for two thirds of the EU budget 
and three quarters of the overall target for climate funding under the 2014-2020 
multiannual financial framework. Between October 2015 and February 2016 we 
conducted audits visits in Poland on cohesion and common agricultural poli -
cies, in Germany and Romania on cohesion policy, and in France and Spain on 
the common agricultural policy. Our sample took account of the materiality of 
expenditure, the volume of greenhouse gases emissions, and adaptation chal -
lenges. In each Member State, we reviewed the overall programming framework, 
including programmes set at national and regional level20. We also carried out 
similar audit work for Horizon 2020, fisheries policy and the LIFE Programme at 
Commission level. Figure 3Overview of audited budget areas and auditees
Member States
France, Poland
and SpainMember States
Germany, Poland
and RomaniaMember StatesDG CLIMA DG EMPLDG ENV DG MARE DG AGRI DG REGIO DG ResearchCoordinating roles:
Secretariat General, DGs CLIMA and Budget
LIFE Programme Fishery PolicyCommon Agricultural
PolicyCohesion Policy Horizon 2020
Source:  European Court of Auditors.
20 In the field of cohesion policy, 
the regional programmes for 
Saxony and North Rhine 
Westphalia in Germany and 
for Silesia in Poland were 
chosen for further scrutiny. In 
the field of rural development 
policy, the regional 
programmes for Rhône-Alpes 
in France and Andalusia in 
Spain were examined.
17 Audit scope and approach 
20 
We collected and examined audit evidence against the audit criteria by means of 
written questionnaires, interviews with Member State and Commission officials, 
and documentary and data analyses.
21 
This report also addresses the suggestion that the European Parliament made in 
2015 and 2016 that we audit how the agreed target of 20 % climate mainstream -
ing was being achieved.
22 
With spending in the 2014-2020 period still at an early stage, this report focuses 
on planned expenditure, and not on actual expenditure at project level. We did 
not analyse non-climate-related spending, nor did we examine the potential ad -
verse environmental effects generated by EU support21. Similarly, other climate-
related spending outside the EU budget was also beyond the audit scope. 
Therefore, this report does not include an assessment of the general effects of EU 
policies on climate, the performance of the EU against its 2020 and 2030 climate 
and energy targets, or the optimum level of EU climate funding.
23 
We also identified, where possible, examples illustrating good practices or practi -
cal case studies.21 For example, the funding 
provided to roads or aviation 
resulting in an increase of 
greenhouse gases emissions.
18
 Observations
Overall progress has been made but there is a serious 
risk that the 20 % target will not be met
24 
This section assesses the general approach adopted by the Commission to incor -
porate the climate action target into the EU budget, and the progress made to 
date. We analysed whether:
— there was a plan on how the overall target will be achieved;
— an appropriate tracking method built on internationally established method -
ologies has been set up (see for example paragraphs 34 to 36);
— progress had been reported based on reliable and relevant information.
A collective commitment, with some funding instruments 
expected to contribute more than 20 %
25 
We examined whether the Commission had set up a plan outlining which areas of 
the budget should contribute and to what extent. Such individual targets ought 
to have been laid down for specific budget areas based on a sound assessment 
of potential and investment needs in the area to ensure that investment is sup -
ported where most needed. At the same time, the actual potential of policies to 
deliver a contribution by implementing climate-related measures would need to 
be taken into account, for example, their principal aims and set up. The calcula -
tion used to measure climate action expenditure should be based on a transpar -
ent system.
26 
The target of ‘at least 20 %’ of EU expenditure was a political choice (see para -
graph 8). The Commission justified climate mainstreaming, including the level 
of the target, by citing its aim of responding to the challenge posed by climate 
change and the substantial investment needs for climate action, in particular 
those associated with implementing the 2020 climate and energy targets. How -
ever, we could not find clear evidence quantifying these investment needs.
19 Observations 
27 
The Commission has estimated that 6 to 7 % of the EU budget for 2007-2013 was 
spent on climate action (see paragraph 8). Since no procedure for monitoring  
climate action spending had been in place in the 2007-2013 period, we were  
unable to determine whether and to what extent the 20 % would call for an  
additional effort for 2014-2020.
28 
The 20 % target applies to the whole of the EU budget over the whole of the 
2014-2020 period; it is therefore not an annual target. Table 1  shows the main 
budget areas which are contributing to achieving the 20 % target. Table 1Audited budget areas in 2014-2020 multiannual financial framework and the 
Commission’s associated climate funding forecasts
Audited budget areaPlanned  
expenditure  
2014-2020  
(billion euro)Planned target  
of climate funding  
2014-2020  
(%)Planned  
climate funding  
2014-2020  
(billion euro)
Heading 1 a - Research (Horizon 2020) 74.9 ≥ 35.0 16.6
Heading 1 b - Cohesion Fund 63.3 28.4 18.0
Heading 1 b - European Social Fund 91.4 1.2 1.1
Heading 1 b - European Regional Development Fund 200.3 18.5 37.0
Heading 2 - European Agricultural Guarantee Fund (agricultural 
direct payments)288.0 16.3 47.0
Heading 2 - European Agricultural Fund for Rural Development 99.5 57. 5 57. 2
Heading 2 - European Maritime and Fisheries Fund 6.4 15.6 1.0
Heading 2 - LIFE 3.5 49.3 1.6
EU BUDGET 1 062.6 ≥ 20.0 212.5
Share of budget areas audited in EU budget 7 7.9  % 84.5  %
Source:  European Court of Auditors’ estimates based on Commission programme statements, programming documents, Commission data, regu -
lations and 2014-2020 multiannual financial framework.
20 Observations 
29 
We found that the co-legislators, i.e. the European Parliament and the Council, 
had set targets in several main budget areas by introducing them in the legis -
lation governing the respective funding instruments (see Figure 4 ). These are 
either presented in the preamble of the legal texts, or as legally binding targets 
underpin the planned targets shown in Table 1 , in the latter case they represent 
a mandatory minimum threshold. Figure 4Targets in regulations that support climate mainstreaming
1  Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013 establishing Horizon 2020 — the Frame -
work Programme for Research and Innovation (2014-2020) and repealing Decision No 1982/2006/EC (OJ L 347, 20.12.2013, p. 104).
2  Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on support for rural development by the 
European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005 (OJ L 347, 20.12.2013, p. 487).
3  Regulation (EU) No 1293/2013 of the European Parliament and of the Council of 11 December 2013 on the establishment of a Programme for 
the Environment and Climate Action (LIFE) and repealing Regulation (EC) No 614/2007 (OJ L 347, 20.12.2013, p. 185).
4  Regulation (EU) No 1301/2013 of the European Parliament and of the Council of 17 December 2013 on the European Regional Development 
Fund and on specific provisions concerning the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006 (OJ L 347, 
20.12.2013, p. 289).
Source:  European Court of Auditors, based on the respective regulations.
Horizon 2020
European Regional
Development FundFrom at least 12 % to at least 20 % for supporting the shift towards a low-carbon economy in all sectors
Article 4 of Regulation (EU) No 1301/2013 on the ERDF⁴LIFEEuropean Agricultural
Fund for Rural DevelopmentAt least 30 % for action on climate and environment
Article 59.6 of Regulation (EU) No 1305/2013 on support for rural development by the EAFRD/two.superiorAt least 35 % for climate action
Recital 10 of Regulation (EU) No 1291/2013 establishing the Framework Programme 
for Research and Innovation 2014-2020/one.superior
25 % for climate action
Article 4.2 of Regulation (EU) No 1293/2013 on the establishment of a Programme for the Environment and Climate Action/three.superior
21 Observations 
30 
We found that the resources generated in enforcing the targets introduced in the 
legislation were intended to make a significant contribution to the achievement 
of the climate action goal. We estimated this expected contribution to be 38 % of 
the amount needed to meet the overall target of spending at least 20 % of the EU 
budget on climate action in the 2014-2020 period.
31 
The absence of specific targets in other substantial parts of the EU budget makes 
it more difficult for the Commission to meet the 20 % target. For example, in the 
budget area of Competitiveness for Growth and Jobs, there are three financially 
significant programmes22 which, unlike the Horizon 2020 programme in this 
budget area, have no set targets for climate funding.
32 
However, no overall plan outlining which funding instruments could contribute 
and to what extent was ever devised (see paragraph 26 and Table 1 ). This is likely 
to prove to be a sub-optimal way to determine the climate action contribution to 
be made by spending programmes which differ in nature.
33 
Since 2014, the biggest contributors on climate action have been the common 
agricultural policy and cohesion policy (see Figure 5 ). Agricultural and rural 
development funds, namely the EAGF and EAFRD, are playing a key role in the ef -
forts to achieve the target. The Commission has forecast that they will contribute 
47 billion euros and 57.2 billion euros in climate funding respectively. The Com -
mission estimated that 51.9 % of the climate funding planned under the 2014-
2020 multiannual financial framework would come from agricultural funds, which 
is more than their 37.7 % share of the EU budget.22 The European Earth 
Observation Programme 
(known as Copernicus), the 
Connecting Europe Facility, 
and the Programme for the 
Competitiveness of 
Enterprises and Small and 
Medium-sized Enterprises. The 
Commission expects these 
three programmes to provide 
43 % of the climate funding in 
this budget area.
22 Observations 
The Commission’s tracking method builds on international 
methodologies yet has weaknesses
34 
Some measures contribute to climate change mitigation and adaptation more 
than others. A system therefore had to be devised to identify what action could 
be counted towards the 20 % target. The Commission built on an internationally 
established methodology, namely the OECD’s ‘Rio markers’, which assign catego -
ries to expenditure according to the rules mentioned in Table 2 . The EU’s tracking 
methodology is a system for gauging the contribution from different funding 
instruments and policy areas to climate action by establishing three categories of 
expenditure. In order to transform these ‘Rio markers’ into financial data, the EU 
climate coefficients of 0 %, 40 %, and 100 % were applied to the EU expenditure, 
following rules specific to the various spending areas. Figure 5Climate funding in 2014-2016 by EU budget area
Source:  Commission’s programmes statements of draft budgets of 2014, 2015 and 2016.Other areas: 9 % Other funds in natural resources 
(EMFF + LIFE): 1 %
Horizon 2020: 8 %
Cohesion policy (ERDF + CF): 27 %Common agricultural policy 
(EAGF + EAFRD): 55 %
23 Observations 
35 
The audited Commission directorate-generals and Member States found the 
use of these three climate coefficients to be a pragmatic approach for tracking 
climate expenditure. However, we found two main weaknesses in the tracking 
system:
— The EU climate coefficients applied in certain areas failed to respect system -
atically the conservativeness principle (see paragraphs 51 to 59), developed 
by the World Bank in order to avoid overestimates in climate funding (see 
Box 2 ). This failure resulted in over-estimates of the amounts allocated on 
climate action.
— The European Structural and Investment Funds Regulation adopts an ap -
proach which deviates from the OECD categories; the 100 % coefficient is 
applied to support making a significant contribution to climate change, while 
the 40 % coefficient is a marker of a moderate contribution. Assigning the 
top weighting to contributions which are merely ‘significant’, rather than only 
to those where climate change is the primary objective, increases the number 
of cases in which the maximum coefficient can be used. This leads to a risk of 
climate-related amounts being overestimated.Table 2OECD categories and EU climate coefficients
OECD EU
Applicable 
categoryCategories of activity EU climate coefficientsExample:  
Criteria used in European Structural  
and Investment Funds
2Expenditure for activities for which climate 
is the principal  (primary) objective.100 %The support makes a significant  contribution 
towards climate change objectives.
1Expenditure for activities for which climate 
is a significant, but not the principal , 
objective.40 %The support makes a moderate  contribution to 
climate change.
0Expenditure not targeted at climate 
objectives.0 %The support does not contribute towards those 
objectives or the contribution is insignificant.
Source:  Handbook on the OECD-DAC Climate Markers, http://www.oecd.org/dac/stats/48785310.pdf ; Article 8 of Regulation (EU) No 1303/2013 of 
the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Structural and Investment 
Funds (OJ L 347, 20.12.2013, p. 320).
24 Observations 
36 
We found weaknesses in the reporting arrangements. Unlike other international 
systems (see Box 2 ), the EU’s tracking system provides no information on how 
much is spent on climate change mitigation and adaptation23.23 According to the Commission, 
the only exception is the 
climate tracking applied for 
external instruments, as 
reported by the Directorate-
General for International 
Cooperation and 
Development to the OECD. We 
audited this area in Special 
Report No 17/2013, ‘EU climate 
finance in the context of 
external aid’ ( http://eca.
europa.eu ).Box 2Principles developed by international actors for tracking climate financing
The ‘Common Principles for Climate Mitigation Finance Tracking’, developed by the joint climate finance 
group of Multilateral Development Banks24 and the International Development Finance Club, include the 
principle of conservativeness, which dictates that ‘where data is unavailable, any uncertainty is to be over -
come following the principle of conservativeness  where under-reported rather than over-reported climate 
finance is preferable’.
The EIB has incorporated this principle within its general principles for recording its climate action lending:
‘Credibility : the recording system must maintain the credibility of the Bank’s reporting on climate action, and 
thus, in the case of doubt or uncertainty around climate impacts, the presumption will be to exclude.’
The EIB’s other general principles include that, as far as possible only the climate relevant parts of projects 
and programmes  should be recorded, and that mitigation and adaptation  are to be recorded separately.
24 The African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the European 
Investment Bank, the Inter American Development Bank, and the International Finance Corporation, World Bank from the World Bank Group.
Source:  Common Principles for Climate Mitigation Finance Tracking, 31 March 2015. European Investment Bank, EIB Climate Strategy, Mobilis -
ing finance for the transition to a low-carbon and climate-resilient economy, 22 September 2015.
25 Observations 
25 COM(2014) 903 final of 
26 November 2014, ‘An 
investment Plan for Europe’, 
pp.7, 10 and 11.
26 Commission estimate as at the 
end of 2015, see Special 
Report No 19/2016 
‘Implementing the EU budget 
through financial 
instruments — lessons to be 
learnt from the 2007-2013 
programme period’, 
paragraph 21 ( http://eca.
europa.eu ).
27 Developed by the European 
Investment Bank and the 
Commission, this financial 
instrument, which is part of 
the LIFE programme, seeks to 
use public funds to leverage 
private investment in natural 
capital activities.
28 The Natural Capital Finance 
Facility is expected to provide 
finance of 100 to 
125 million  euros between 
2015  and  2017.
29 SWD(2016) 299 of 
14 September 2016 
accompanying the mid-term 
review of the multiannual 
financial framework 
COM(2016) 603 final.37 
In 2014 the Commission proposed at least doubling expenditure via financial in -
struments under the European Structural and Investment Funds for the program -
ming period from 2014 to 202025. Approximatively 21 billion euros will be allo -
cated to financial instruments from these funds26. Such financial instruments aim 
to revolve and to have a multiplier effect generating additional investments. For 
example, the EU contribution of 10 million euros in 2016 to the Natural Capital 
Finance Facility27 is included in the climate tracking exercise. This facility’s actual 
contribution could be 10 times as high28. Tracking progress towards the 20 % in 
the EU core budget does not reflect the full financial effects of EU spending on 
climate action.
38 
At the same time, we found a potential overestimate of the Natural Capital Fi -
nance Facility’s contribution to climate action. This is because it can also invest in 
fields which do not have climate expenditure as either a principal or significant 
objective.
Overall progress made towards reaching the target, but 
reporting only partially reliable and not focused enough on 
results
39 
The system used to monitor progress towards the 20 % target is incorporated in 
the Commission’s annual budgetary procedure. Each directorate-general deter -
mines the level of tracking detail required and reports the aggregates to Directo -
rate-General Budget. Both Directorate-General Budget and Directorate-General 
Climate Action monitor progress on an annual basis.
40 
On average, the climate contribution rate has stood at 17.6 % between 
2014  and  2016. The Commission working document accompanying the mid-term 
review of the multiannual financial framework29 suggests that progress has been 
made between these years (see Figure 6 ), since the total EU budget contribution 
to climate funding was estimated by the Commission to be 13.6 % in 2014, 17.3 % 
in 2015 and 20.9 % in 2016. For 2017, the Commission estimates — based on its 
draft budget proposal — the climate funding to be 19.3 %.
26 Observations 
41 
The Commission acknowledged in a 2015 annual activity report that it was not 
in a position to assess with confidence whether it was on track to reach the 20 % 
objective for the 2014-2020 multiannual financial framework period overall30. The 
Commission assessed progress towards the 20 % target in the multiannual finan -
cial framework mid-term review, published on 14 September 2016. It estimated 
that 18.9 % of the EU budget would be spent on climate action. We found that 
the figures for 2014 and 2015 were largely based on estimates. This was particu -
larly the case with the European Structural and Investment Funds.30 See the Directorate-General 
for Climate Action’s Annual 
Activity Report for 2015, p. 7.Figure 6Overview of climate-related spending plans for 2014  to 2016Share of climate funding in EU budget
0510152025
17.6 %20.9 %
17.3 %
13.6 %Target 20 %
Average
2014-20162016 2015 2014
Source:  Commission data, mid-term review of the multiannual financial framework 2014-2020, SWD(2016) 299 final.
27 Observations 
42 
While this was unavoidable, since the spending instruments for the new pro -
gramming period had only just been set up, and so some information was not 
yet available, these limitations hampered the comparability from one year to the 
other of the data provided for the period 2014-2016 (see Figure 6 ). In addition, 
the approval of the multiannual spending programmes in 2015 automatically 
contributed to the increase in climate action funding since as programmes were 
approved their climate-related plans were entered into the system. As a result, 
the evolution between 2014 and 2016 cannot be taken as a trend for the whole 
period.
43 
In the fisheries spending area, Member States do not have to report their 
planned climate measures to the Commission until 2016. Until they do so, Direc -
torate-General Maritime Affairs and Fisheries cannot verify the accuracy of the 
indicative contribution to climate change action objectives communicated by the 
Member States in their operational programmes.
44 
To date, no tool has been available to provide a multiannual consolidated update 
on the situation across the EU budget. The Commission has recently updated 
climate-relevant spending data for the whole financial period in the context of 
the multiannual financial framework mid-term review.
45 
The established approach presents an inherent risk, since it focuses on identify -
ing the plans for future expenditure. Planned expenditure on climate action does 
not, however, necessarily translate into actual spending. While this audit did not 
look at actual expenditure, and, in general, data on actual expenditure is not yet 
available, we found instances which highlighted this inherent risk. When compar -
ing actual expenditure at project level against plans in the LIFE programme, we 
found that the LIFE projects chosen represented an EU climate action contribu -
tion of 34 % of the total EU funds allocated to LIFE. This fell short of the 49.3 % 
anticipated in the budgetary documents.
28 Observations 
31 For instance, the Commission 
has referred to its experience 
with some tools within the 
budget (e.g. CO2MPARE), and 
to approaches used at the EIB, 
the World Bank and other IFIs, 
and by private investors (e.g. 
SEI metrics, IIGCC).46 
This case illustrates the need for the authorities to re-evaluate any projected 
climate funding contributions once they are sufficiently certain of the nature of 
their forthcoming expenditure, while avoiding extra administrative costs. The 
Commission has not yet developed a procedure for doing so.
47 
In addition, the Commission’s approach to the 20 % target is solely focused on 
financial data. Information on what funds plan to achieve or have achieved in 
terms of results such as greenhouse gas reductions is only available for parts of 
the budget. The information is also not comparable, which hampers the consoli -
dation of the results achieved in different areas.
48 
In the European Regional Development Fund, Member States are not obliged 
to use the common greenhouse gas reduction output indicator apart from in 
the energy investments. While Member States may opt to include other areas, 
we found that not all of the audited Member States did so. In addition, different 
methodologies and tools31 are used to calculate greenhouse gas emissions and 
reductions. Several Member State authorities are developing tools to calculate 
emissions for certain project types such as climate-friendly transportation in the 
European Regional Development Fund. As a result, there is a lack of information 
about the extent to which climate-related action will contribute to the CO2 emis -
sion reductions, and the available data may not be comparable across Member 
States. We found that where indicators existed, they focused on mitigation within 
the energy sector, while adaptation related indicators are rare.
29 Observations 
There is a serious risk that the target will not be met
49 
We estimated that the rate of climate funding must be increased to an average of 
22 % across the remaining years of the current multiannual financial framework, 
i.e. for 2017 to 2020, to reach the overall target of 20 % by the end of 2020. This 
matches the estimate produced by the Directorate-General for Climate Action32. 
Compared to 2014-2016, this means that an increased effort will be required 
for 2017-2020. However, the mid-term review estimates an 18.9 % spending on 
climate action for the period of 2014-2020.
50 
We also conducted an analysis in order to assess the Commission’s prognosis. As -
suming that the areas responsible for most climate funding (see Table 1 ) actually 
provide the anticipated amounts of climate funding, we estimated that the rate 
of climate funding to be achieved in 2014-2020 in the areas of the EU budget not 
listed in Table 133 was 18.2 %. This would mean doubling current efforts in these 
areas34. We could find no evidence showing that the Commission was increasing 
efforts in these areas and how such a doubling would be feasible.
51 
In addition, there are serious risks that could affect the expected contribution in 
the areas mentioned in Table 1 , which are to provide most of the planned climate 
funding on 2014-2020 multiannual financial framework. The main risks are exam -
ined sector by sector in the three following sections:
— Assumptions concerning the largest contribution from agricultural direct 
payments to the climate action target are insufficiently justified and this may 
lead to overestimation (paragraphs 52 to 54).
— Application of EU climate coefficients has led to overestimation of the contri -
bution to climate of rural development (paragraphs 55 to 59).
— We adapted the climate contributions from agricultural direct payments and 
rural development measures where necessary to be in line with the principle 
of conservativeness (see paragraphs 54 and 58). These adjustments would 
reduce agricultural climate funding by up to approximately 33 billion euros, 
which represents around 15 % of the overall target.
— Horizon 2020 has fallen behind its 35 % target and needs to catch up (para -
graphs 60 to 64).32 See graph in the Directorate-
General for Climate Action’s 
Annual Activity Report for 
2015, p. 12.
33 They are mainly research 
programmes (excluding 
Horizon 2020) and the 
spending programmes under 
budget headings dealing with 
security and citizenship, and 
external relationships of the 
EU.
34 On the basis of the rate of 
11.4 % expected to be 
achieved for the years 
2014-2016, we estimated that 
a rate of 23.2 % would need to 
be achieved on average for 
the remaining years 2017-2020 
if the overall target of 20 % 
was to be reached.
30 Observations 
Assumptions concerning the contribution from agricultural 
direct payments to the climate action target lack sound 
justification
52 
Agricultural direct payments are composed of a greening component, which 
represents a 30 % share, and of a non-greening component, representing the re -
maining 70 %. The Commission estimates that the contribution from agricultural 
direct payments to climate change will be around 20 % per year in 2016-202035. 
The climate funding is calculated by adding the greening component which con -
tributes 14.0 % and the non-greening component which contributes 5.6 % (see 
Figure 7 ).35 However, on average for the 
whole 2014-2020 period, the 
contribution is estimated to be 
16.3 % since the payments for 
agricultural practices 
beneficial for the climate and 
the environment, known as 
‘greening payments’, have 
only been included in the 
calculation since 2016.Figure 7Overview of the method designed by the Commission to calculate climate funding 
from agricultural direct payments
Contribution to climate Share of direct payments EU climate coeﬃcientContribution of direct
payments to climate
Greening 
(30 %)
Direct payments 
outside greening
(70 %)Crop diversi/f_ication
(33 %)
Ecological focus areas
(33 %)
Permanent pastures
(33 %)
20 %0 %
40 %
100 %
40 %0.00 %
3.96 %
9.90 %
5.60 %
19.46 %
8 %x
xx
xx
Source:  Explanation of the methodology for applying climate tracking to direct payments (European Commission).
31 Observations 
36 The three farming practices 
are the following: crop 
diversification, having 
ecological focus area on the 
agricultural area, and 
maintaining existing 
permanent grassland.53 
The method and the EU climate coefficients applied when calculating the climate 
contribution of the greening component fairly reflect the climate-relatedness 
of the three farming practices36 connected with this payment. However, we 
found there to be a lack of quantifiable elements justifying the 20 % applied to 
non-greening direct payments (see Box 3 ). The Commission considers the final 
climate contribution of 8 %, i.e. 20 % x 40 %, to be conservative. Box 3Lack of appropriate justification for non-greening direct payments’ climate 
contribution
The Commission believes that some non-greening agricultural direct payments provide benefits for the 
climate, largely through cross-compliance standards. The Commission acknowledged that quantifying this 
contribution would be a very difficult and costly exercise, and decided to label 20 % of the budget for non-
greening direct payments as climate-related.
The Commission considered using the penalty system for cross-compliance infringements to justify this 20 % 
share. We found, however, that there were no clear grounds for doing so.
54 
In order to reflect the climate contribution of cross-compliance, a more conserva -
tive approach was considered by the Commission, which would have considered 
the part of the non-greening direct payments to be taken into account to be 
10 % instead of 20 %. This would have resulted in a lower contribution from agri -
cultural direct payments to climate action. As shown in Figure 8 , the contribution 
would be decreased by 9 billion from 47.1 to 38 billion euros. If the conservative -
ness principle developed by the World Bank (see paragraph 35) is applied, the 
Commission should have been taken into account the lower amount of climate 
contribution.
32 Observations Figure 8Comparison between the Commission’s chosen approach and a more conservative 
one (in billion euro)
Source:  Commission data and European Court of Auditors’ estimates based on Commission data.
- 9 billion euro
38.047.1
29.09.018.1
29.0
Estimation of
contribution of
direct payments with 
a more conservative
approachContribution of
direct paymentsGreening 10 % of direct
payments without
greening with 40 %
markerDirect payments
without greeningGreeningMore conservative approach Commission’s calculation
Applying a different set of tracking coefficients based on 
internationally established methodologies to the European 
Agricultural Fund for Rural Development would reduce 
climate funding by 40 %
55 
Regulation (EU) No 215/201437 lays down a methodology for tracking climate 
spending under each of the five European Structural and Investment Funds. For 
the European Agricultural Fund for Rural Development, this entails applying the 
EU climate coefficients to rural development priorities and focus areas, regardless 
of the measures and sub-measures used to achieve these policy objectives.37 Commission Implementing 
Regulation (EU) No 215/2014 of 
7 March 2014 laying down 
rules for implementing 
Regulation (EU) No 1303/2013 
of the European Parliament 
and of the Council laying 
down common provisions on 
the European Regional 
Development Fund, the 
European Social Fund, the 
Cohesion Fund, the European 
Agricultural Fund for Rural 
Development and the 
European Maritime and 
Fisheries Fund and laying 
down general provisions on 
the European Regional 
Development Fund, the 
European Social Fund, the 
Cohesion Fund and the 
European Maritime and 
Fisheries Fund with regard to 
methodologies for climate 
change support, the 
determination of milestones 
and targets in the 
performance framework and 
the nomenclature of 
categories of intervention for 
the European Structural and 
Investment Funds (OJ L 69, 
8.3.2014, p. 65).
33 Observations 
56 
The Commission deemed the OECD’s ‘Rio markers’ methodology inappropriate in 
the EAFRD field because the measures have multiple and systematic co-benefits 
of an environmental, economic or social nature. The Commission’s approach 
rightly awards a 100 % climate coefficient to climate-related Union priority 5 ‘Pro -
moting resource efficiency and supporting the shift towards a low-carbon and 
climate-resilient economy in the agriculture, food and forestry sectors’. However, 
the Commission has applied the same 100 % climate coefficient to all focus areas 
included under environment-related Union priority 4 ‘Restoring, preserving and 
enhancing ecosystems related to agriculture and forestry’, despite the difference 
in focus between these two priorities. The Commission decided that a coef -
ficient of 40 % was too low due to the characteristics of the rural development 
measures. As a result of the Commission’s approach, the 40 % climate coeffi -
cient was applied to only 10 % of the planned climate funding under the EAFRD; 
the remaining 90 % of the planned climate funding is weighted with the 100 % 
coefficient.
57 
In the EAFRD, unlike in the other European Structural and Investment Funds, 
we found that there was a need to use different EU climate coefficients for each 
measure. The approach followed for the EAFRD does not distinguish sufficiently 
between the climate contributions made by different activities, leading to an 
overestimation of contributions to climate action. For example, payments for 
‘areas under natural constraints’, aiming to prevent land abandonment, were 
weighted at 100 %. While such activities can mitigate climate change depending 
on the actual land use, this is not assured, and cannot be compared with activi -
ties such as forestry, which also receive 100 % (see Box 4 ).Box 4Illustration of the difference of rationale between measures
Payments for ‘areas under natural constraints’  compensate farmers for disadvantages stemming from natu -
ral or other constraints. Their ultimate aim is to prevent land abandonment. We found that while such pay -
ments could help prevent climate change, this was not their primary objective and so a climate coefficient of 
40 % would be more prudent. This correction alone would reduce the EAFRD’s contribution to climate funding 
by 16 %, or 9.2 billion euros, for the 2014-2020 period.
Forestry activities  like afforestation play an important role in helping to meet some of the key ecological ob -
jectives of the EU Rural Development Policy. Afforestation and the creation of woodland respond to the need 
to enhance ecosystems and carbon sequestration and to switch to a low-carbon economy. Afforestation also 
helps to prevent natural hazards and fires, and contributes to the adaptation to climate change. We found that 
this rationale justified a climate coefficient of 100 %.
34 Observations 
58 
When assessing the Member States’ rural development programmes, we found 
that the Commission’s approach had led to more expenditure being labelled as 
climate action than would have been the case had each measure been reviewed 
separately and classified according to international standards. In the light of this 
finding, we revised the climate coefficients ( Annex ), and estimated, for the whole 
EU, the revised amount of climate funding from the EAFRD for 2014-2020. Our 
estimates suggested that the EAFRD climate amounts should be reduced by 42 %, 
or by 23.9 billion euros (see Figure 9 ).Figure 9Variation in EAFRD climate amounts (in billion euro)
Source:  European Court of Auditors’ estimates based on data extracted from SFC2014 via Infoview as at 30 May 2016 — Planned EAFRD  
expenditure per focus area and measure of approved rural development programmes.33.357.2
23.9
ECA estimates Regulation (EU)
No 2015/2014- 42 %
35 Observations 
59 
In the ERDF and CF, the Commission faced similar issues in the classification of 
expenditure, but managed to apply a more detailed approach. We also found 
good practice within the same budget area as rural development: the LIFE Pro -
gramme’s tracking practices are more conservative than those of the EAFRD. Dif -
ferent tracking coefficients are used for the LIFE Programme’s Environment and 
Climate Action sub-programmes (similar to rural development priorities 4 and 5 
respectively) (see Box 5 ).Box 5Tracking methods applied in the LIFE Programme
In the LIFE Programme, in line with the OECD methodology, expenditure items have been assigned to one of 
three categories: primarily climate-related (100 %); significantly climate-related (40 %); and not climate-related 
(0 %).
Most of the amounts planned to be spent under the Environment sub-programme are tracked with a 40 % 
coefficient38, while they are tracked with a 100 % coefficient under the Climate Action sub-programme39.
The LIFE Programme provides us with a clear example of a case where environmental expenditure (with 
a maximum of 40 %) is not fully assimilated to climate, in contrast with practice in the rural development field. 
As a result, climate funding between areas cannot always be compared.
38 An example of a typical project under the Environment sub-programme would be the development of wastewater treatment plants to minimise 
the pollution of receiving waters. The main objective is environmental, i.e. reducing pollution, but part of such a project might cover urban 
drainage networks, thereby contributing to adaptation to climate change, through flood management.
39 An example of a typical project under the Climate Action sub-programme would be renovation of the existing building stock in order to save 
energy and to reduce greenhouse gas emissions.
36 Observations 
Prompt action required as contribution from research 
funding is falling significantly behind
60 
Horizon 2020’s climate tracking results for 2014 show that 24 % of the budget 
was dedicated to climate action40. This is considerably below the 35 % target (see 
Figure 4 ). The regulatory requirement41 for the multiannual work programme 
to include an indication of the amount of climate-related expenditure was not 
adhered to in either 2014-2015 or 2016-2017. Therefore, no quantified target has 
been assigned to the individual work programmes identifying their contribution 
towards the objective to spend at least 35 % of the overall Horizon 2020 budget 
on climate action.
61 
Horizon 2020 distinguishes between and sets out the relative budget propor -
tions for programmable and bottom-up actions42. For programmable actions, the 
climate-related expenditure can be estimated by applying EU climate coefficients 
to the relevant expenditure categories. However, the Commission considers that 
the results from bottom-up areas are unpredictable by nature43. In 2014, the 
bottom-up actions represented 35 % of the total Horizon 2020 budget, and, of 
these, 8.5 % were considered climate related.
62 
Using the projected climate contribution from programmable actions for the 
years 2014 to 2017, we calculated44 that between 2018 and 2020 the average 
share of climate-related expenditure in Horizon 2020 would have to reach 47 % 
to achieve the 35 % target for the whole 2014-2020 multiannual financial frame -
work. This represents a substantial increase compared with the rate of 24 % 
already achieved. Figure 10  shows an example of the path that the climate alloca -
tions under Horizon 2020 will have to take if the 35 % target is to be met.40 According to the Commission, 
data on climate-related 
expenditure does not yet take 
into account some of the 
financial instruments which 
are tracked at project level, i.e. 
in a bottom-up manner 
(InnovFin SMEG and InnovFin 
SME VC) due to the biennial 
nature of the European 
Investment Fund’s reporting.
41 Council Decision 2013/743/EU 
of 3 December 2013 
establishing the specific 
programme implementing 
Horizon 2020 (OJ L 347, 
20.12.2013, p. 965) states that 
the multiannual work 
programmes for Horizon 2020 
must provide an indication of 
the amount of climate-related 
expenditure, where 
appropriate.
42 Programmable actions have 
a clear thematic objective 
corresponding to one of the 
topics defined in the 
Commission’s work 
programme. For bottom-up 
actions, thematic objectives 
are not predetermined and 
can vary depending on the 
project.
43 Which share of bottom-up 
actions can be considered 
climate-related depends upon 
researcher proposals, which 
are evaluated for their 
scientific excellence.
44 Data source is Draft budget for 
the year 2017, Heading 1A: 
Competitiveness for growth 
and jobs, section 3.2.2 
Contribution to 
mainstreaming of climate 
action. The calculation is 
based on the fact that in 
2015-2017 (as in 2014) 
bottom-up actions accounted 
for 35 % of the total budget 
and that in that period (as in 
2014) 8.5 % of the budget for 
bottom-up actions was 
climate-related.
37 Observations Figure 10An example of a path for climate allocation if the 35 % target for Horizon 2020 is  
to be met (in billion euro)
63 
In November 2015 the Commission devised an action plan45 in order to remedy 
Horizon 2020’s sub-optimal progress towards its 35 % target. We analysed wheth -
er this action plan contained adequate provisions to deliver the necessary catch-
up in research. The action plan introduces some measures from the 2016-2017 
work programme onwards and recognises the need to do more in the 2018-2020 
work programme. For example, the Commission intends to introduce compulsory 
climate-related checks to be performed on the whole work programme prior to 
approval. In addition, climate-related considerations are to be included in the 
standard project proposal templates and in the award criteria. Allocating a suf -
ficient budget to measures that make a sizeable contribution to climate change 
objectives would be another means, recommended in the action plan, by which 
to help meet the general 35 % target.
02468101214
22 %53 %
47 %53 %
47 %53 %
47 %
23 %77 % 75 %
25 % 25 %75 %78 %9.59.013.2
12.2
11.0
10.09.4
Estimations2017 2014 2020 2019 2015 2016 2018Non climate action
Climate action
Source:  Commission’s data for 2014-2017 (draft budget 2017) and European Court of Auditors’ estimates of climate action for 2018-2020.
45 The Strategic Research and 
Innovation Directors-General 
Group endorsed on 
12 November 2015 the 
measures included in the 
Action Plan for increasing 
mainstreaming of climate 
action in Horizon 2020 and 
climate-related expenditure.
38 Observations 
64 
While the action plan includes useful proposals, it fails to present any quantifi -
able targets or models as to how the 35 % target might be met. For example, the 
action plan does not include related calculations, nor does it provide a roadmap 
on how the relatively low share of climate-related expenditure in the years 2014-
2017 can be compensated for in 2018-2020.
More and better-focused climate action funding in 
some European Structural and Investment Funds, but 
largely business as usual in others
65 
The target to spend 20 % of the EU budget on climate action can be factored 
into the various policy areas through spending more on existing climate-related 
programmes, creating new programmes or developing features to target spend -
ing more towards climate-related objectives. A sign of ‘better focused spending’ 
would be funds and programmes setting requirements which are more geared 
towards climate-related objectives than they were in the 2007-2013 period. Over -
all, we were unable to determine whether and to what extent the 20 % target 
represents an increase in climate action spending compared to 2007-2013 (see 
paragraph 27).
66 
We examined the European Structural and Investment Funds and the agricul -
tural direct payments, since these areas under shared management account for 
around three quarters of the planned climate funding (see paragraph 19). For 
these funds, we looked at whether, compared with 2007-2013, the 20 % target 
had added value to the fight against climate change through:
— a larger allocation of EU funds to climate action — a quantitative 
improvement — and/or
— better focused EU funding for climate action — a qualitative improvement.
39 Observations 
46 The sample project is 
intended to illustrate ERDF 
and CF spending on climate 
action. We did not audit the 
performance nor the 
cost-effectiveness of this 
project. See Special Report 
No 21/2012 ‘Cost-effectiveness 
of cohesion policy 
investments in energy 
efficiency’ on cost-
effectiveness issues regarding 
renewable energy ( http://eca .
europa.eu).67 
Since spending has just started for the 2014-2020 period, we analysed the quan -
titative and qualitative improvements by auditing the design of measures in the 
spending programmes as well as planned expenditure, and not actual expendi -
ture at project level. The examples mentioned in the section therefore primarily 
act as case studies to illustrate the strengths, weaknesses and good practices we 
noted.
Higher climate allocations in the ERDF and CF demonstrate 
that better focus on climate can be achieved
68 
We assessed whether the inclusion of climate action under the 2014-2020 ERDF 
and CF operational programmes had resulted in more funds being allocated to 
climate investments compared with 2007-2013. Since climate action spending 
was not specifically monitored in the 2007-2013 programmes, to perform our as -
sessment we first identified which investment categories, known as intervention 
fields, were comparable to the 2014-2020 climate-related categories. In a second 
step, we applied the 2014-2020 EU climate coefficients to the EU expenditure 
made in the relevant 2007-2013 investment categories.
Mainstreaming in the ERDF and CF resulting in higher climate 
allocations …
69 
Compared with 2007-2013, climate-related expenditure in 2014-2020 across all 
ERDF and CF programmes, including the European Territorial Cooperation frame -
work, is planned to increase by around 69 %, from 32.4 billion euros to 54.7 bil -
lion euros. When viewed in terms of its proportion of total ERDF and CF financ -
ing, climate-related expenditure is set to increase from 12 % in 2007-2013 to 21 % 
in 2014-2020.
70 
As shown in Figure 11 , the nature of climate-related expenditure changed be -
tween the two funding periods. Whereas in 2007-2013 railways and multimodal 
transport made the largest climate contribution, with this category accounting 
for 32 % of the total, in 2014-2020 energy efficiency investments come out on 
top, representing 34 % of the total estimate for climate action (see Box 6  for an 
example46).
40 Observations Figure 11Comparison of estimated contribution of ERDF and CF to climate action by sector 
and years (in billion euro)
Source:  European Court of Auditors’ estimates based on Commission data.2014-2020 MFFECA estimated 2007-2013 MFF Energy eﬃciency (100 %)
Railways & multimodal transport (40 %)
Adaptation to climate change (100 %)
Renewable energy (100 %)
Urban transport & intelligent transport systems (40 %)
Other (100 %)
Biodiversity, air quality and water management (40 %)
Ports and inland waterways (40 %)
Other (40 %)
Total60 50 40 30 20 10 0
6.1
10.2
0.4
4.5
3.5
0.7
4.6
1.6
0.8
32.418.4
8.4
6.4
5.9
5.8
4.4
3.3
1.1
1.0
54.7
41 Observations Box 6Example of an energy efficiency investment co-financed by the ERDF in Romania
Energy efficiency projects for private and public buildings47 are planned to account for around 6 % of total 
EU co-financing in Romania  in 2014-2020, compared with about 1 % in 2007-2013. The expenditure for such 
projects is weighted with a 100 % climate action coefficient.
One example of such projects aimed at increasing the energy efficiency of residential building  was fund -
ed in District 3 of Bucharest. The ERDF co-financing from the 2007-2013 Regional Operational Programme 
amounted to around 162 500 euros. The project was completed in 2015. Thermal insulation of the block 
of flats and renovation of the heating system resulted in a reduction of annual energy consumption from 
331 kWh/m2 to 143 kWh/m2, i.e. by 57 %. The CO2 emission savings are estimated to be 238 tonnes/year.
Block of flats before the investment  
(next to the project site)Ongoing works  
(next to the project site)Block of flats after the investment  
(project site)
47 Including high-efficiency co-generation and district heating.
Source:  European Court of Auditors.
42 Observations Table 3Climate funding of ERDF and CF in 2007-2013 and in 2014-2020
Member StatesEstimated share of  
climate funding in  
2007-2013Estimated amount of 
climate funding in  
2007-2013  
(billion euro)Share of  
climate funding in 
2014-2020Amount of  
climate funding in  
2014-2020  
(billion euro)
Germany 7.0 % 1.20 27.0  % 2.90
Poland 8.0 % 5.60 15.0  % 11.60
Romania 9.0 % 2.20 19.0  % 4.30
Source:  European Court of Auditors’ estimates based on programming documents and national reporting.71 
The general trend at EU level is also mirrored in all three Member States visited 
for the audit in the area of cohesion policy. Here too the climate expenditure un -
der all ERDF and CF operational programmes is planned to increase in 2014-2020. 
However, we also saw significant variations between Member States in terms of 
their financial commitments for climate action under the EU budget (see Table 3 ).
… and cases of better focus on climate do exist
72 
In addition to conducting a financial assessment, we also examined whether 
incorporating climate action into the 2014-2020 ERDF and CF operational pro -
grammes had resulted in investment activities which are better focused on 
climate action. We identified qualitative improvements in certain areas. Firstly we 
found that management processes were taking more account of the climate is -
sue. Across Germany, Poland and Romania we noted qualitative improvements in 
how grant applications were taking climate into account, including requirements 
to describe the climate change impacts and risks or the project’s climate change 
contribution. Secondly, we found instances where changes were being made to 
focus on climate action (see Box 7 ).
43 Observations Box 7Examples of a better focus on climate change in the audited ERDF and Cohesion 
Fund programmes
In Germany , the Federal Ministry for Environment, Nature Conservation, Building and Nuclear Safety set up 
a solely nationally funded project to encourage the active participation of environmental partners in the ERDF 
programming process and to support the incorporation of environmental and climate issues. Among other 
things, the project resulted in the production of two programming manuals. These included, for instance, 
examples of good practice for incorporating climate action into projects in different areas. The EU climate 
coefficients were labelled as a first step in the right direction, while stressing that ecological sustainability had 
to be integrated in all measures.
Under the German Saxony  operational programme, the selection criteria stipulate that company buildings 
must be renovated to energy efficiency standards which exceed legal requirements by 10 %. Furthermore, in 
energy-efficiency renovations, funding is targeted at only those parts of a project which bring added climate 
value, whereas previously whole projects were supported.
Romania  awards higher scores to projects in the Large Infrastructure Operational Programme providing 
higher savings in energy consumption. We also noted that the Polish and Romanian  national authorities had 
set eligibility conditions designed to obtain greater synergies with the relevant broader strategies like the 
Sustainable Energy Action Plans or Sustainable Urban Mobility Plans.
73 
In 2014-2020 up to 64 % of climate-related expenditure under the ERDF and CF 
operational programmes is expected from the investment categories for which 
the 100 % EU climate coefficient is applied. This means that they make a signifi -
cant contribution towards climate change objectives (see Table 2 ). This is an in -
crease compared with 2007-2013, when most of the climate-related expenditure 
came from activities with only a moderate contribution to climate change (see 
Figure 12 ).
44 Observations 
74 
Although in 2014-2020, the funding of measures deemed primarily directed at 
climate action is set to increase in each of the three Member States visited, the 
extent of this increase differs significantly. In Poland and Romania, mainly due 
to the continued support of railways and urban transport48, around half of the 
climate-related funding across all operational programmes is assigned a 100 % 
coefficient, while in German operational programmes nearly all of the climate-
related expenditure is weighted at 100 % due to its significant contribution to 
climate action.
75 
However, the role of climate action in research and innovation and in the field 
of small- and medium-sized enterprises was found to be relatively small. In the 
audited programmes in Germany and Romania, we found that the Commis -
sion had not pushed strongly during programming negotiations significantly to 
increase the amount of climate action taken in the research and development nor 
business development fields in programmes where this amount was either low or 
non-existent. Member States were able to hit the 20 % target without having to 
adapt funding in these areas. This means that not all the potential opportunities 
for financing climate-related action were fully utilised.48 These projects are considered 
as 40 % climate related.Figure 12Share and amounts of climate action expenditure according to the EU climate 
coefficients in the two periods
Source:  European Court of Auditors’ estimates based on Commission data.21 billion euro
(64 %)12 billion euro
(36 %)20 billion euro
(36 %)35 billion euro
(64 %)
40 % coeﬃcient100 % coeﬃcient
33 billion euro55 billion euro 2014-2020 MFF
2007-2013 MFF100 % 80 % 60 % 40 % 20 % 0 %
45 Observations 
The European Social Fund’s potential contribution to climate 
action — more could be achieved
76 
The Commission has acknowledged an increasing demand for green jobs, with 
the energy efficiency sector expected to employ 2 million by 2020, and the re -
newable energy sector 3 million49. Matching the supply of ‘green workers’ to the 
increased demand will prove crucial to the establishment of a green economy. 
A lack of qualified specialists and workers in the green jobs sector would trigger 
costs and delays50 in the implementation of climate-related actions.
77 
At the same time, the transition to a low-carbon economy will also lead to job 
cuts in the fossil fuel-based sectors, leaving workers from these sectors with 
a need to acquire new skills51. Compared to the other cohesion policy funds, the 
ESF operational programmes explicitly allocated a very low share to climate ac -
tion, specifically 1.4 % of 83 billion euros.
78 
The Commission considered that the share of the ESF allocated to climate-related 
expenditure established on the basis of the information reported by the Mem -
ber States in the ESF operational programmes may underestimate the expected 
contribution of the ESF to climate action in the 2014-2020 period, the final extent 
of which will only be known after the programmes’ implementation. Not hav -
ing set appropriate requirements for the ESF to take climate action into account 
represents a missed opportunity for this area to contribute more to the shift to 
a low-carbon economy and to climate action in general.
79 
When the 2014-2020 operational programmes were under approval, there was no 
requirement for Member States to provide the Commission with any justification 
of the ESF allocation to climate action objectives. Therefore, the programmes 
were not systematically checked to see whether they would target the demand 
for green jobs or support the transition to a low-carbon economy.49 See the Commission Staff 
Working Document 
‘Exploiting the employment 
potential of green growth’ of 
18 April 2012.
50 The UK House of Commons 
Environmental Audit 
Committee report ‘Green Jobs 
and Skills’ concludes that 
‘relying exclusively on the 
market to address skills gaps is 
causing delays in greening the 
economy.’ http://www.
publications.parliament.uk/
pa/cm200910/cmselect/
cmenvaud/159/159i.pdf
51 See e.g. paragraphs 324 and 
325 of the OECD report 
‘Aligning Policies for the 
Transition to a Low-Carbon 
Economy’ http://www.oecd.
org/env/Aligning-policies-for-
the-transition-to-a-low-
carbon-economy-
CMIN2015 -11.p df
46 Observations 
52 Special Report No 26/2016 
‘Making cross-compliance 
more effective and achieving 
simplification remains 
challenging’ ( http://eca.
europa.eu ).
53 Commission Staff Working 
Document of 22.6.2016 
‘Review of greening after one 
year’ — SWD(2016) 218 final, 
see p. 14 of Annex 2, part 3/6.
54 This amount has been 
estimated by adding the 
indicative figures on direct aid 
payments to producers 
according to Council 
Regulation (EC) No 1782/2003) 
(OJ L 270, 21.10.2003, p. 1) and 
Council Regulation (EC) 
No 73/2009 (OJ L 30, 31.1.2009, 
p. 16) provided in the reports 
on the distribution of direct 
aid to farmers for the financial 
years 2007 to 2013:  
http://ec.europa.eu/
agriculture/cap-funding/
beneficiaries/direct-aid/
index_en.htmNo significant change in the common agricultural 
policy spending, although good practices exist in rural 
development
80 
This section assesses whether the incorporation of climate action into the agricul -
tural direct payments and the rural development programmes under review has 
resulted in positive changes in the quantity of climate spending — measured by 
an increased volume of funds for climate-related spending — and in its quality — 
measured by its better focus on climate-related operations. We reviewed availa -
ble evidence upon the cross-compliance system and agricultural direct payments 
and also the 2014-2020 rural development programmes for Andalusia, Poland and 
the Rhône-Alpes and compared them to the 2007-2013 programmes.
Introduction of a Green Payment does not guarantee a significant 
change of the contribution of direct payments to climate
81 
In a recent report52, we concluded that the changes to the common agricultural 
policy for the period 2014-2020 reduced the number of the cross-compliance 
rules, by removing requirements which were not sufficiently relevant to the farm -
ing activity.
82 
The greening component was introduced as a new feature of the common 
agricultural policy for the period 2014-2020. Although it includes requirements 
relevant to climate (see paragraph 53), it is largely based on the previous good 
agricultural and environmental conditions, which covered similar agricultural 
practices, such as protection of permanent pastures or retention of landscape 
features. Available information shows that 64 % of beneficiaries of direct pay -
ments are exempted from greening requirements53. As a result, there is a risk that 
reorientation of direct payments towards climate action will be limited. The Com -
mission plans to evaluate the environmental achievements of the green payment 
in 2017 and at the end of 2018.
83 
The multiannual financial framework 2014-2020 contribution to agricultural direct 
payments is expected to amount to 288 billion euros. This amount is comparable 
to the amount of 276 billion euros of direct aid paid to producers in the financial 
years 2007 to 201354.
47 Observations 
Climate funding in rural development: no increase in the focus on 
climate action
84 
Due to the specificities of rural development, a comparison across all rural 
development programmes was not possible because programme measures are 
implemented through different types of operation from one programme to the 
next. Based on three rural development programmes, we estimated the share of 
climate funding in 2007-2013 and compared it against the plans for 2014-2020. 
Across these programmes, we saw no real upward or downward shift in invest -
ments (see Table 4 ).Table 4Climate funding in 2007-2013 and in 2014-2020
Rural development 
programmes reviewedEstimated share of 
climate funding in 
2007-2013Estimated amount of  
climate funding in  
2007-2013  
(billion euro)Share of  
climate funding in 
2014-2020Amount of  
climate funding in  
2014-2020  
(billion euro)
Andalusia, Spain 66.2  % 1.38 55.0  % 1.05
Poland (one rural develop -
ment programme for the 
whole of the Member 
State)37.0  % 0.50 39.4  % 0.34
Rhône-Alpes, France 78.0  % 0.51 75.0  % 0.80
Source:  European Court of Auditors’ estimates based on programming documents.
48 Observations 
Good practices exist in rural development but generally business 
as usual prevails
85 
When assessing the programmes for any qualitative improvements, we found so 
far no significant change in the key features of the management process, such 
as the requirements or eligibility and selection criteria. This was particularly true 
of financially significant measures, such as measures dealing with areas under 
natural constraints or organic farming.
86 
The design of some less material measures had, however, been modified to make 
them more climate-related. We estimated that around 10 % of the EAFRD climate 
funding in the Rhône-Alpes, 22 % in Poland and 36 % in Andalusia are related to 
measures which better target climate action compared to 2007-2013. We found 
several examples of emerging good practice contributing directly to tackling 
climate change (see Box 8 ).
Examples of better targeting climate change in the audited EAFRD programmes
The design of certain forestry measures  we came across in Poland , the Rhône-Alpes  and Andalusia  had 
been improved to support carbon storage, or to boost the resistance of forests to climate change. The Rhône-
Alpes programmes also included one measure helping to develop locally generated renewable energy by 
supporting investments from small forest-based companies in wood fuel.
We also found improvements in the three programmes’ design of climate-friendly agri-environment-climate  
measures. Poland has started chemically analysing the organic carbon content of soil, and intercropping in 
order to achieve a positive balance of organic matter on an agricultural plot. In Andalusia, new requirements 
have been introduced to tackle the issue of soil erosion which blights olive production.Box 8
49 Observations 
87 
We also found examples of good practice in measures created in 2007-2013 which 
are still being implemented in 2014-2020 (see Box 9 ).
Example of continuation in climate funding from the Rhône-Alpes regional 
programme in France
The 2014-2020 programme continues to support investment projects which contribute directly to mitigating 
climate change, for example through developing methane-production methods for agriculture . The objec -
tive is to facilitate the supply and use of renewable energy sources. Justifiably, the projects are tracked with 
a 100 % climate coefficient.
The project pictured below, funded in 2012 and completed in 2015, is an example of such a project, produc -
ing energy from waste. Half of the waste input into the facility is of agricultural origin, while the other half is 
locally sourced green waste provided by a local company. The outputs improve the food self-sufficiency of the 
farm, and also meet the heating needs of a local school and other local premises. The total EAFRD eligible cost 
for the methane-production facility was 881 000 euros. The project was 37.36 % funded through public  
support, with 105 000 euros provided in EAFRD grants and 224 415 euros of national co-financing.Box 9
Example of an agricultural climate-related project
Source:  Conseil Régional Auvergne Rhône-Alpes.
50 Observations 
Very limited increased focus on climate action in the 
European Maritime and Fisheries Fund
88 
Climate change was not mainstreamed into the 2007-2013 European Fisheries 
Fund and the Directorate-General Maritime Affairs and Fisheries therefore has 
not calculated its contribution to climate action in that period. We estimated55 
EFF’s contribution to climate action to have been around 1 billion euros in 2007-
2013, representing 26 % of the Fund. For 2014-2020, the aggregated estimates of 
climate action contributions (see paragraph 43) provided in all EMFF operational 
programmes by the Member States also stand at around 1 billion euros, repre -
senting around 18 % of the EMFF.
89 
One of the main reasons for this stability in absolute terms is the reduced support 
which the EMFF has assigned to fleet management measures. There was a de -
crease in the related support for the replacement or modernisation of engines 
and for the permanent or temporary cessation of fishing activities, which meas -
ures are tracked with 100 %, 100 % and 40 % coefficients respectively.
90 
We have compared the current legal framework with the 2007-2013 period to 
ascertain whether the current maritime and fisheries fund has moved towards 
a better integration of climate change objectives in the content of its measures. 
This was done for the measures which can be traced back to the 2007-2013 
period. Direct and clear references to climate change objectives, both mitigation 
and adaptation, are still rare and, as a result, the fisheries fund had not widened 
the scope of its contribution to climate action (see Box 10 ).55 Our estimate was mainly 
based on the methodology 
used by Directorate-General 
Maritime Affairs and Fisheries 
in the budgetary documents 
for 2014 to 2016, although we 
also included permanent and 
temporary cessation measures 
under the EFF, applying 
a coefficient of 100 % and 
40 % respectively. This 
addition is the only deviation 
from the methodology used 
by Directorate-General 
Maritime Affairs and Fisheries, 
as it reflects at face value the 
coefficient for fleet 
adjustment measures laid 
down in Commission 
Implementing Regulation (EU) 
No 1232/2014 of 
18 November 2014 amending 
Commission Implementing 
Regulation (EU) No 215/2014 in 
order to adapt references 
therein to Regulation (EU) 
No 508/2014 of the European 
Parliament and of the Council 
and correcting Implementing 
Regulation (EU) No 215/2014 
(OJ L 332, 19.11.2014, p. 5).
51 Observations 
Examples of better targeting climate change in the audited European Maritime and 
Fisheries Fund
Compared to the previous period, we have identified a limited number of improvements in the EMFF. Out of 
the 50 measures supported by the EMFF, three previously existing measures56 were improved to incorporate 
climate action and two new measures with climate change objectives were created57. In addition, the EMFF 
now contains a stand-alone measure for energy efficiency and climate change mitigation, although similar 
operations were eligible for financing previously. This clearly climate-targeted measure, tracked with a 100 % 
coefficient, should benefit 3 738 projects across the EU, the vast majority of which would concern engine 
replacement and modernisation.
56 These measures were on ‘Inland fishing and inland aquatic fauna and flora’, on ‘Productive investments in aquaculture’ and on ‘Processing of 
fishery and aquaculture products’. References were mainly made to improving energy efficiency.
57 These two new measures related to ‘Mutual funds for adverse climatic events and environmental incidents’ and ‘Aquaculture stock insurance’.Box 10
52
 Conclusions and 
recommendations
91 
The EU institutions made a political commitment for the 2014-2020 multiannual 
financial framework to mainstream climate action across EU budget spending, 
and to ensure that at least one euro in every five from the EU budget is spent on 
climate-related activities. The main aim of this pledge is to respond to the chal -
lenge posed by climate change and the substantial investment needs for climate 
action. We sought to determine whether the target to spend at least 20 % of the 
EU budget on climate-related action was likely to be met and whether the ap -
proach employed was likely to add value, by leading to more and better-focused 
funding on climate action.
92 
We found that ambitious work was underway and that, overall, progress had 
been made towards reaching the target. However, there is a serious risk of falling 
short of meeting the 20 % target without more effort to tackle climate change. 
The implementation of the target has led to more, and better-focused, climate 
action funding in some of the European Structural and Investment Funds namely 
the European Regional Development Fund and the Cohesion Fund. In other areas, 
however, such as in the European Social Fund, agriculture, and rural development 
and fisheries, it is largely business as usual, i.e. there has been no significant shift 
of these funds towards climate action.
Overall progress has been made, but there is serious risk that 
the 20 % target will not be met
93 
The objective to spend ‘at least 20 %’ of the EU Budget on climate action is part 
of the EU’s leadership in climate action and represents a clear commitment to 
tackling climate change. According to Commission figures, the share of funding 
dedicated to climate action has averaged 17.6 % between 2014 and 2016 (see 
paragraphs 26 and 40 to 41).
94 
To date, no tool has been available to provide a multiannual, consolidated update 
on the progress across the EU budget in achieving this aim. The Commission has 
recently updated climate-relevant spending data for the whole 2014-2020 period 
in the context of the multiannual financial framework mid-term review. Overall, 
the Commission estimates that 18.9 % would be spent on climate action, thereby 
falling short of the 20 % objective (see paragraph 44).
53 Conclusions and recommendations 
95 
Weaknesses of the tracking method used by the Commission and Member States 
concern reporting and comprehensiveness. The tracking method does not reflect 
the full financial effects of EU spending on climate action through financial in -
struments and off-balance sheet items, despite their increasing use (paragraphs 
37 and 38). It also does not differentiate between mitigation and adaptation 
measures, thereby making it difficult to assess the level of financing for these dif -
ferent approaches to addressing climate change (paragraph 36).
Recommendation 1 — Robust multi-annual consolidation 
exercise
The Commission should carry out annually, a robust, multi-annual consolidation 
exercise to identify whether climate expenditure is on track to achieve the 20 % 
target.
Target implementation date: December 2017.
Recommendation 2 — Comprehensive reporting framework
(a) The Commission  should report, annually, consolidated information on the 
progress towards the overall 20 % target in its annual management and per -
formance report and also report, with comprehensive information thereon, 
in each relevant annual activity report. This should include reporting on pro -
gress on action plans where they exist. In addition information on the climate 
contribution of financial instruments should be reported.
(b) Member States  should report, in their annual implementation reports to the 
Commission, on the areas under shared management where there are po -
tential opportunities for climate action, outlining how they plan to increase 
climate action in these areas.
Target implementation date: Annually, starting from the 2016 annual 
reports.
(c) The Commission  and the Member States  should ensure that data collection 
differentiates between mitigation and adaptation.
Target implementation date: Development of such a system for the next 
multiannual financial framework.
54 Conclusions and recommendations 
96 
We estimated that the rate of climate funding must be increased to an average of 
22 % across the remaining years of the current multiannual financial framework, 
i.e. for 2017 to 2020 (paragraph 46), to reach the overall target of 20 % by the end 
of 2020. The main contributors to the target are agriculture and rural develop -
ment and the cohesion policy, followed by the Horizon 2020 research programme 
(paragraph 33). No overall plan outlining which funding instruments could con -
tribute and to what extent was ever devised (paragraph 26). This is likely to prove 
to be a sub-optimal way of determining the climate action contribution to be 
made by spending programmes which differ in nature.
Recommendation 3 — Assessment of climate change needs
When planning the potential contribution to climate action from individual 
budget lines or funding instruments, the Commission  should ensure that such 
plans are based on a realistic and robust assessment of the climate change needs 
and on each area’s potential to contribute to the overall target.
Target implementation date: Development of such as system for the next 
multiannual financial framework.
97 
The main areas examined in this audit are expected to account for 84.5 % of 
expected contributions to the climate action target. Some of these areas have 
climate-related targets, the Horizon 2020 programme, the European Agricultural 
Fund for Rural Development, the LIFE programme and the European Regional 
Development Fund, supporting the delivery of their contribution (paragraphs 28 
and 29). However, there are serious risks that could affect the expected contribu -
tion in agriculture, rural development and research (paragraphs 49 to 51).
98 
The Commission’s approach to planning and measuring progress towards the 
20 % target across the EU budget was based on an internationally established 
methodology. The Commission and audited Member States found it to be a prag -
matic approach to tracking climate expenditure. However, the EU climate coef -
ficients applied in certain areas failed to respect systematically the conservative -
ness principle in order to avoid overestimating climate funding (paragraph 35).
55 Conclusions and recommendations 
99 
The assumptions concerning the contribution from agricultural direct payments 
to the climate action target are insufficiently justified. An application of the prin -
ciple of conservativeness would result in a decrease of 9 billion euros in climate 
contributions (paragraphs 53 and 54). Application of EU-climate coefficients led 
to an overestimation of the contribution to climate of rural development. The ap -
proach followed for the EAFRD does not distinguish sufficiently between the cli -
mate contributions made by different activities, leading to an overestimation of 
contributions to climate action. Our estimates suggested that the EAFRD climate 
amounts should be reduced by 23.9 billion euros (paragraph 58).
100  
We estimated that these adjustments together would reduce the agricultural and 
rural development climate funding contribution by up to approximately 33  bil-
lion euros, which represents around 15 % of the overall target (paragraphs 51, 54 
and 58).
Recommendation 4 — Correct overestimations
The Commission  and the Member States  should apply the principle of con -
servativeness and correct the overestimations in the EAFRD by reviewing the EU 
climate coefficients set.
Target implementation date: By December 2017.
101  
The Horizon 2020 research programme has fallen behind its 35 % target and 
needs to catch up. While it is encouraging that the Commission has put in place 
an action plan, the plan does not set out in sufficient detail how the required 
catch-up is expected to be ensured (paragraphs 60 to 64).
102  
Apart from these risks affecting the delivery of the climate contribution in the 
main areas, other, less significant, contributing areas would need to double their 
current efforts to achieve the 20 % target. We could find no evidence, such as an 
action plan, showing that the Commission is increasing efforts in these areas and 
how such a doubling would be feasible (paragraph 47).
56 Conclusions and recommendations 
Recommendation 5 — Draw up action plans
Whenever the annual consolidation exercise reveals a risk that the expected 
contributions from a particular area may not be achieved, the Commission  
should draw up an action plan for that area, setting out in detail how it expects 
to ensure the catch-up needed.
Target implementation date: By March 2017 for the drawing up of action 
plans.
103  
The Commission’s approach to assessing levels of climate action funding focuses 
on identifying planned expenditure. Yet this approach carries an inherent risk, 
since planned expenditure will not necessarily translate into actual spending. 
Therefore, it is the actual implementation of planned climate funding contribu -
tions which should be assessed, while avoiding disproportionate administrative 
costs. The Commission has not yet developed a procedure for doing so (para -
graph 46). Monitoring the actual financial implementation of the 20 % target 
would, however, not provide any information on results achieved by the climate 
action spending. We found that information on what funds plan to achieve, or 
have achieved in terms of results such as greenhouse gas reductions, is only 
available for parts of the budget and lacks comparability (paragraph 47).
Recommendation 6 — Develop indicators monitoring actual 
spending on climate action and related results
The Commission  should:
(a) in cooperation with the Member States , in the area of shared management, 
develop a harmonised and proportionate system for monitoring the actual 
implementation of climate action;
(b) in line with its ‘budget for results’ initiative, establish climate-related results 
indicators in all areas that contribute towards the achievement of the target, 
in particular to assess greenhouse gas emissions and reductions brought 
about through EU-funded measures;
(c) facilitate the exchange of good practice on climate-related result indicators 
between Member States.
Target implementation date: By December 2018.
57 Conclusions and recommendations 
More and better-focused climate action funding in some 
European Structural and Investment Funds, but largely 
business as usual in others
104  
Compared with 2007-2013, climate-related expenditure in 2014-2020 across all 
ERDF and CF programmes, including the European Territorial Cooperation frame -
work, is planned to increase from 32.4 billion euros to 54.7 billion euros. In addi -
tion to the financial increase, we identified a better focus on climate action and 
good practices in certain areas, such as in the programmes’ management process 
or in the type of funded investments (paragraphs 69 and 70).
105  
However, in the audited programmes in Germany and Romania, we found that 
the Commission had not pushed strongly during programming negotiations 
significantly to increase the amount of climate action taken in the research and 
development or business development fields. This means that not all the poten -
tial opportunities for financing climate-related action were fully explored (para -
graph 75).
106  
Similarly, the European Social Fund’s potential contribution to climate action 
could be increased in light of the increasing demand for green jobs in the econo -
my. We found that the ESF operational programmes allocated a very low share of 
1.4 % of 83 billion euros to climate action. The Commission did not systematically 
check whether the programmes would target the demand for green jobs or sup -
port the transition to a low-carbon economy (paragraphs 76 to 79).
107  
Despite some good practices emerging, there has been no significant shift to -
wards climate action in agricultural, rural development or fisheries policies.
58 Conclusions and recommendations 
108  
The introduction of a Green Payment does not guarantee a significant change 
of the contribution of direct payments to climate. This new scheme, while hav -
ing a certain climate action impact, rests in practise largely on already existing 
agricultural practices (paragraphs 81 and 83). Across the three rural development 
programmes audited, we saw no real upward or downward shift in investments. 
Regarding the better-targeting of climate action, we found no significant change 
in the key features of the management process, such as the requirements or 
eligibility and selection criteria. The design of some less material measures had, 
however, been modified to make them more climate-related. We also found sev -
eral examples of emerging good practice contributing directly to tackling climate 
change (paragraphs 84 to 87).
109  
There has been only a very limited increased focus on climate action in the mari -
time and fisheries fund. Direct and clear references to climate change objectives, 
both mitigation and adaption, are still rare. As a result, the maritime and fisheries 
fund has not widened the scope of its contribution to climate action (paragraphs 
88 to 90).
Recommendation 7 — Explore all potential opportunities 
and ensure a real shift towards climate action
The Commission  should:
(a) identify those areas with underutilised potential for climate action, such as 
the European Social Fund, and develop action plans for increasing the climate 
action contribution of these areas;
(b) The Commission  and Member States  should increase the mainstreaming of 
climate action in agriculture, rural development and fisheries, for example, by 
developing new, or retargeting existing, measures tackling climate change.
Target implementation date: By December 2017.
59 Conclusions and recommendations 
This report was adopted by Chamber I, headed by Mr Phil WYNN OWEN, Member 
of the Court of Auditors, in Luxembourg at its meeting of 26 October 2016.
 For the Court of Auditors
 Klaus-Heiner LEHNE
 President

60
 Annex
Matrix of coefficients used by the ECA in the field of the rural development policy
The proposed matrix based on the audit visits in the Member States, and also adapted from the prepara -
tory study commissioned by the Commission, remedies the lack of differentiation of EU climate coeffi -
cient by measure.
On the basis of the case studies examined in the Member States, a literature review1, an analysis of Commission 
internal notes and the application of international standards2, we established, as a first step, an updated matrix 
of climate coefficients which takes into account the measures and their policy objectives represented by the fo -
cus areas (see below). In a second step, we determined the EAFRD amounts by measure and focus area. The data 
are available from the Commission to do so. The only case where an assumption had to be made was with union 
priority 43. Finally, we applied the climate coefficients in the matrix below to the corresponding EAFRD amounts.Annex
1 The matrix has been developed in particular on the basis of the preparatory study commissioned by the Commission, ‘Tracking system for climate 
expenditure in the post-2013 EU budget’ — Detailed CAP assessment, Table 5.4 (pp. 25-30).
2 Rio markers of the OECD and tracking principles developed by the Multilateral Development Banks like the World Bank.
3 Union priority 4 is programmed as a ‘block’ according to the Commission ‘guidelines for strategic programming’, i.e. there is no allocation of EAFRD 
expenditure to individual focus areas. Therefore, we divided the planned EAFRD expenditure under this priority by three and allocated an equal 
EAFRD amount to each of the three focus areas under union priority 4: focus areas 4A (restoring, preserving and enhancing biodiversity), 4B 
(improving water management, including fertiliser and pesticide management) and 4C (preventing soil erosion and improving soil management).
61 Annex 
Proposed matrix
Priorities and FAs Priority 2 Priority 3 Priority 4 Priority 5 Priority 6
Enhancing farm 
viability and 
competitiveness of all 
types of agriculture 
in all regions and 
promoting innovative 
farm technologiesPromoting food chain 
organisation, animal welfare and 
risk management in agricultureRestoring, preserving and enhancing 
ecosystems related to agriculture and 
forestryPromoting resource 
efficiency and 
supporting the 
shift towards a low 
carbon and climate 
resilient economy in 
agriculture, food and 
forestry sectorsPromoting social 
inclusion poverty 
reduction 
and economic 
development in 
rural areasMeasure CodeMeasure Name For all focus areasImproving 
competitiveness 
of primary pro -
ducers by better 
integrating them 
into the food 
chainSupporting 
farm risk pre -
vention and 
managementRestoring, 
preserving 
and 
enhancing 
biodiversityImproving 
water 
management, 
including 
fertiliser and 
pesticide 
managementPreventing soil 
erosion and 
improving soil 
managementFor all focus areas For all focus areas
1Knowledge transfer and informa -
tion actions0 % 0 % 40 % 40 % 40 % 100 % 100 % 0 %
2Advisory services, farm manage -
ment and farm relief services0 % 0 % 40 % 40 % 40 % 100 % 100 % 0 %
3Quality schemes for agricultural 
products and foodstuffs0 % 0 % 0 % 40 % 40 % 40 % 100 % 0 %
4 Investments in physical assets 0 % 0 % 40 % 40 % 40 % 100 % 100 % 0 %
5Restoring agricultural production 
potential damaged by natural 
disasters and introduction of ap -
propriate prevention actions0 % 0 % 100 % 40 % 40 % 100 % 100 % 0 %
6 Farm and business development 0 % 0 % 0 % 0 % 0 % 0 % 100 % 0 %
7Basic services and village renewal 
in rural areas0 % 0 % 0 % 40 % 40 % 100 % 100 % 0 %
8Investments in forest area 
development and improvement of 
the viability of forests0 % 0 % 40 % 100 % 100 % 100 % 100 % 0 %
9 Setting up of producer groups 0 % 0 % 0 % 0 % 0 % 0 % 100 % 0 %
10 Agri-environment-climate 0 % 0 % 0 % 40 % 40 % 100 % 100 % 0 %
11 Organic farming 0 % 0 % 0 % 40 % 40 % 100 % 100 % 0 %
12Natura 2000 and Water Frame -
work Directive payments0 % 0 % 0 % 40 % 40 % 100 % 100 % 0 %
13Payments to areas facing natural 
or other specific constraints0 % 0 % 0 % 40 % 40 % 40 % 100 % 0 %
14 Animal welfare 0 % 0 % 0 % 0 % 0 % 0 % 100 % 0 %
15Forest-environmental and climate 
services and forest conservation0 % 0 % 40 % 40 % 40 % 100 % 100 % 0 %
16 Co-operation 0 % 0 % 0 % 40 % 40 % 100 % 100 % 0 %
17 Risk management 0 % 0 % 40 % 0 % 0 % 0 % 100 % 0 %
18Financing of complementary na -
tional direct payments for Croatia0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 %
19LEADER: Support for bottom-up 
capacity building that could lead 
to innovative approaches to meet 
climate change challenges0 % 0 % 0 % 40 % 40 % 100 % 100 % 0 %
20 Technical assistance 0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 %Annex
62 Reply of the  
Commission
Executive summary
I
The Commission is fully committed to fighting climate change. The EU approach to transitioning to low carbon and 
climate resilient economy is driven through policy measures, which seek to also shift investment patterns. Public 
spending from the EU and Member States’ national budgets complements and seeks to speed up this transition.
With the proposal to mainstream climate across the EU budget1 and to increase climate spending to 20 % of the 
budget, the Commission aimed to make the EU budget a pioneer in fostering mainstreaming. The European Council 
and the European Parliament supported the mainstreaming approach2, and confirmed that the 20 % is an appropri -
ate level of support.
II
The European Council explicitly confirmed the Commission’s approach to mainstream climate across the budget as 
the main objective, supported by the political objective of making at least 20 % of EU spending in the current MFF 
climate relevant.
In addition to mainstreaming, the Multiannual Financial Framework  (MFF) also set out a dedicated programme for 
addressing climate action.
IV
The Commission welcomes the Court’s recognition of the ambitious work undertaken and the need to continue the 
efforts to further improve mainstreaming. At the same time, the Commission considers that significant progress 
has been made both in including climate considerations in programme development and in developing the unique 
quantified mainstreaming approach, which now provides a transparent baseline.
The Commission notes, however, that the potential individual contribution of each of the funds varies according to 
its primary missions, and therefore, it is inevitable that the systems used to programme and to monitor the contri -
bution differ from one fund to another. Also, the reform of the common agricultural policy (CAP) has led to a sig -
nificant increase in the financing of climate action as compared to the 2007-2013 period. The Commission considers 
that there is a significant shift towards more climate action.
V
The Commission assessed progress towards the 20 % target in the MFF Mid Term Review (MTR), published on 
14 September 2016. The latest data, presented in the Staff Working Document (2016) 299 accompanying the Mid -
term Review of the Multiannual Financial Framework (COM(2016) 603) show that over the 2014-2020 period, a total 
of slightly above EUR 200 billion of climate-related spending will be reached. This is equivalent to around 18.9 % for 
the whole financial programming period.
See also Commission reply to paragraph 28.
1 See COM(2011) 500 final, Part I, section 6.1.4 http://ec.europa.eu/budget/library/biblio/documents/fin_fwk1420/MFF_COM-2011-500_Part_I_en.pdf
2 See 2013-02-07 European Council Conclusions and the 2013-03-13 European Parliament resolution on the new MFF (P7_TA(2013)0078).
Reply of the Commission 63
VI
The Commission takes note of the Court’s simulations. However, the Commission has established an innovative and 
detailed tracking methodology built on the OECD’s Rio markers.
Nevertheless, the Commission recognises the need to continue efforts to increase climate relevance across EU pro -
grammes, including those mentioned by the Court.
The method used by the Commission has been prepared in a transparent and coordinated manner. The EU 
approach to assessing levels of climate finance in agriculture and rural development is sound. Likewise, for green 
direct payments the calculation fairly reflects the climate-relatedness of the three farming practices. Also, for non-
greening direct payments, the climate impact of 8 % of non-greening direct payments is not overestimated if we 
look at the benefits for the climate of cross compliance and direct payments.
VII
The Commission recognises that the innovative approach to tracking climate spending and its implementation in 
the EU budget could be further improved, including in respect of increasing granularity with regard to mitigation 
and adaptation. At the same time, in light of the unclear administrative impact and the complexity of avoiding 
double counting while reflecting the frequent associated co-benefits, the Commission does not currently foresee 
further disaggregation in its tracking system.
VIII
The Commission notes that some of the Court’s recommendations have already been or will be addressed ( notably 
Recommendation 1, 6(b) and 6(c) ), some are partially acceptable (Recommendations 2(a), 3, 4, 5 and 7(a)), some are 
not appropriate or feasible ( Recommendations 2(c), 6(a) and 7(b) ). Overall, the Commission considers that the main -
streaming approach has increased the climate contribution of the EU budget.
Introduction
01
The Commission is fully committed to fighting climate change. The EU approach to transitioning to low carbon and 
climate resilient economy is driven through policy measures, which seek to also shift investment patters, as shown 
for again by the Commission’s recent package of measures3. The public spending from the EU and Member States’ 
national budgets complements and seeks to speed up this transition.
02
The Commission considers the adaptation to unavoidable climate change and mitigation as complementary policy 
responses and seeks to address both simultaneously, where relevant.
3 http://europa.eu/rapid/press-release_IP-16-2545_en.htm
Reply of the Commission 64
05
The adaptation measures seek to reduce the climate-related risks to an acceptable level, based on projections of 
climate change.
07
There are many drivers of the reduction in greenhouse gas (GHG) emission levels; chiefly, reduced energy intensity 
(less energy consumed per unit of GDP) and deployment of renewables. Economic growth (GDP per capita) was 
a positive driver of emissions (i.e. not a contributor to mitigation) throughout the period 2005-2013, though this 
effect has been weaker since 2007/084. In this context, it is not warranted to single out the impact of the economic 
crisis on emissions.
08
The Commission highlights that the 20 % objective was announced as one element of the mainstreaming approach 
in the EU budget, which itself is one element in the EU approach to responding to the investment needs associated 
with climate change.
The mainstreaming approach in the EU budget demonstrates the EU commitment to and leadership in climate 
action, like all EU actions to fight climate change.
09
The Commission considers that 20 % was announced as a political and aspirational target to support achieving 
greater climate relevance across operations financed by the EU budget. The approach was endorsed by the Euro -
pean Council and the European Parliament, and has underpinned subsequent implementation steps. The Commis -
sion underlines that, in spirit of the above, both the Commission and the budgetary authority decided not to make 
this target part of a legal text.
In addition to mainstreaming, the multiannual financial framework (MFF) also sets out a dedicated programme for 
addressing, inter alia, climate action (under the LIFE programme).
12
The Directorate-General Budget coordinates the allocation of resources in the budget towards policy priorities, 
including with regard to climate action, collects and consolidates in the Statement of Estimates of the Draft Budget 
the data to justify the amounts being proposed by the Commission to the Budget Authority for the annual budget 
procedure.
4 See EEA decomposition analysis: Section 2.4 of Trends & Projections in Europe 2015 : EEA Report No 4/2015
Reply of the Commission 65
Box — The context of mainstreaming in brief  
Fourth bullet
EU climate action covers a wide range of measures, and the ambitious targets make the EU a global leader in climate 
action. Mainstreaming climate across EU policies and programmes is one element of supporting the transition to 
low carbon and climate resilient society.
The EU approach to climate mainstreaming into the EU’s instruments and the budget is conceptualised at four lev -
els, as explained in the Commission reply to paragraph 24.
Observations
24
The Commission considers that the EU budget has made significant progress in climate mainstreaming. The EU 
approach to climate mainstreaming into the EU’s instruments and the budget is conceptualised at four levels:
— The political decisions made by the EU institutions (in the context of the adoption of the MFF 2014-2020) to 
mainstream climate action5 and to announce an objective of making at least 20 % of EU spending climate 
relevant.
— Enshrining climate objectives in the legal/guidance framework (legal basis for the new set of spending pro -
grammes, guidelines).
— The implementation of the climate related rules and guidelines (quality of implementation).
— As part of the approach, a common method to track climate-related expenditures in all EU instruments.
We recognise that the audit focusses primarily on the financial objective.
Second indent
The Commission disagrees with the Court’s choice to consider a set of principles agreed in 2015 by certain organisa -
tions that implement international development assistance as a benchmark for assessing the ‘appropriateness’ of 
the innovative and detailed EU mainstreaming approach agreed at EU level.
25
The Commission recognises the Court’s decision to consider the 20 % target as a budgetary objective, but reiterates 
that the target was announced by the Commission as a political objective to support climate mainstreaming in vari -
ous programmes. Given the nature of the target, the Commission considers that a budgetary interpretation alone 
does not reflect the EU’s approach to mainstreaming.
5 http://ec.europa.eu/budget/library/biblio/documents/fin_fwk1420/MFF_COM-2011-500_Part_I_en.pdf
Reply of the Commission 66
26
The Commission stresses that the 20 % political objective was announced to help mainstreaming climate action in 
the EU programmes (see Commission’s reply to paragraph 25). For this reason the Commission has not quantified 
the share of the investment needs that should be covered by the EU budget, but considered estimates as outlined in 
the Commission proposal for the MFF6.
27
The Commission considers that there were significant increases in climate-relevant spending. The Commission con -
firms, at the same time, that there are no comprehensive and comparable data on climate-relevant spending in the 
previous MFF, which would have been a prerequisite for developing more detailed targets. Developing a robust and 
transparent tracking system was one element of the EU mainstreaming approach.
28
The Commission assessed progress towards the 20 % target in the MFF Mid-term Review (MTR), published on 
14 September 2016. The data, presented in the Staff Working Document (2016) 299 (SWD) accompanying the Mid -
term Review of the multiannual financial framework (COM(2016) 603) show that over the 2014-2020 period, a total 
of slightly above EUR 200 billion of climate-related spending will be reached. This is equivalent to around 18.9 % for 
the whole financial programming period. The data published in Annex 2 of the SWD details totals by programme 
estimates on climate tracking of 20 % target for the full 2014-2020 programming period.
Climate Mainstreaming 2014-2020 — Totals by programme
(EUR million, commitment appropriations) 2014-2017 2018-2020 estimates
Programme 2014 2015 2016 2017 2018 2019 2020Total 
2014-2020
For reference: Total EU budget  
(Section III — Commission, Financial programming)118 054.4 158 606.8 151 241.6 153 757. 8 156 782.8 159 966.3 164 145.4 1 062 554.9
Total Climate Change finance in the EU budget 16 097.7 27 475.7 31 634.4 29 726.8 30 777.7 31 883.6 32 307.7 200 986.9
Share of Climate Change-relevant spending in EU 
Budget13.6 % 17.3 % 20.9 % 19.3 % 19.6 % 19.9 % 19.7 % 18.9 %
Common Commission reply to paragraphs 31 and 32
The Commission reiterates that the political objective of 20 % was announced to foster mainstreaming (see also 
Commission reply to paragraph 25). The Commission considers such a flexible setting of the 20 % target as appro -
priate in developing an innovative approach to mainstreaming and tracking climate-relevant spending. The EU 
mainstreaming approach seeks integrating climate aspects across the EU budget.
The Commission confirms that the co-legislators did not consider specific targets necessary for promoting climate 
mainstreaming in all programmes. As outlined in the Commission reply to paragraph 24, mainstreaming is pursued 
in multiple processes, with specific targets being one of these.
The data published in the MFF MTR show that many programmes across the EU budget contribute to climate 
action. At the same time, the Commission concurs that specific objectives can be useful for advancing climate 
mainstreaming.
Climate-relevant spending is tracked across the budget; in the case of the European Structural and Investment 
Funds (ESIF) this tracking requirement was set by the co-legislators.
6 http://ec.europa.eu/budget/library/biblio/documents/fin_fwk1420/MFF_COM-2011-500_Part_II_en.pdf
Reply of the Commission 67
34
The Commission recognises that the pioneering EU tracking method, unique in its coverage and detail and agreed 
in the EU legislative process, can be further improved. At the same time, there are no internationally agreed meth -
ods for quantified tracking climate spending.
35
The EU method of assigning coefficients to EU expenditure has proven to be an appropriate balance between the 
robustness of data and the administrative effort required both in the Commission and Member States.
First indent
The Commission recognises the possibility of some over- and under-estimation of climate relevance of certain 
spending with the current methodology and also as a direct consequence of applying a system based on the three 
‘Rio markers’ average ratios. At the same time, the Commission considers its methodology to be sufficiently con -
servative and does not consider a set of principles developed by a group of international aid organisations in 2015 
for mitigation tracking of their operations to be a relevant point of reference for the approach used by the Com -
mission. The Commission underlines that some of the Court’s calculations used in the report used coefficients that 
differ from the ones used by the Commission.
Second indent
The Commission considers the tracking approach agreed by the EU co-legislators robust and fit for its specific pur -
poses. While useful in informing the EU approach, the OECD categories and methods were not designed with the 
aim to support mainstreaming and quantified tracking in the EU budget and have therefore been adjusted by the 
co-legislator to the programme-specific needs in the respective legislative bases.
The Commission points out that the primary objective of different EU programmes is set in the respective legal 
base, and mainstreaming by nature means making the implementation of the primary objective consistent with EU 
climate policy, not replacing the primary objective.
36
The EU climate tracking system incorporates specific elements that make it differ from the ones used by the interna -
tional aid organisations, and therefore comparison to international assistance tracking systems is not relevant.
The Commission recognises that the innovative approach to tracking climate spending and its implementation in 
the EU budget could be further improved, including in respect of increasing granularity with regard to mitigation 
and adaptation. At the same time, in light of the unclear administrative impact and the complexity of avoiding 
double counting while reflecting the frequent associated co-benefits, the Commission does not currently foresee 
further disaggregation in its tracking system.
37
The Commission agrees with the importance of financial instruments and their contribution to EU climate action 
and has included the budget contribution to these in its tracking of climate spending.
Reply of the Commission 68
39
The Commission considers that good progress on climate mainstreaming has been achieved in most respects and 
that the tracking on budget spending is robust and transparent, as outlined in its replies notably to paragraphs 
12 and 28. The Commission recognises the need to further develop its approach to tracking and reporting climate 
results.
40
See also Commission replies to paragraphs V and 28.
41
The Commission confirms that before the MFF MTR, as detailed in the Commission reply to paragraph 28, it was not 
in a position to assess with confidence whether it is on track to reach the 20 % target, as information was still lack -
ing on ESIF funds programmed expenditure for the MFF period, and therefore no reliable data was available at the 
time. The Commission assessed progress towards the 20 % target in the MFF MTR, showing that over the 2014-2020 
period, a total of slightly above EUR 200 billion of climate-related spending will be reached. This is equivalent to 
around 18.9  % for the whole financial programming period.
43
The planned climate measures, with the corresponding coefficients, are listed in the operational programmes (OPs) 
of the European Maritime and Fisheries Fund (EMFF). The indicative EMFF allocation to each measure is included in 
the Member States’ (MS) annual implementation reports (starting in May 2016). The financial table in those reports 
and the key characteristics of the supported operations that will appear in the MS annual reports on operations 
(pursuant to EMFF Article 97(1)(a) will allow the Commission to continuously monitor the level of spending as well as 
any changes to the indicative contribution to climate change declared in the OP .
44
With the programming processes fully completed, the Commission is now in a position to consolidate reliable data 
for updated estimates of these programmes with regard to climate spending, and has published the state of play 
in the context of the MFF MTR. This exercise would have been based on inaccurate data and thus could have led to 
erroneous calculations and misinterpretations, if undertaken on the basis of 2014-2016 provisional data.
45
The Commission considers that it is most relevant to focus climate tracking on commitment appropriations/pro -
grammed and adopted spending, given that expenditure data would not provide useful information for improving 
mainstreaming due to the time delay in moving from programming to expenditure. The Commission also considers 
that tracking financial inputs from the EU budget cannot meaningfully be put into a causal relationship with achiev -
ing EU climate and energy targets or any estimated level of investment needs.
Introducing a tracking approach at the level of the programmed expenditure was the first natural and essential step 
to better integrate climate considerations in all EU programmes. The inherent risk the Court identifies is present in 
all budget plans. The Commission agrees with the Court that planned expenditure does not always translate into 
payments, but points out that on average 97 % of total 2015 EU budget commitments are realised, which makes the 
existing system of ex ante  commitment tracking an efficient proxy also for spending. Also, the Commission points 
out that the methodologies used to calculate the 34 % and 49.3 % are different in approach and scope.
Reply of the Commission 69
46
The Commission regularly reviews data and reflects changes in programming in the context of the annual budget 
procedure and of the execution of the annual budget. Also, the Commission committed in the MFF MTR to assessing 
progress towards the 20 % target in the mid-term reviews of MFF programmes. The Commission considers the exist -
ing tracking and reporting systems as being appropriate, and does not consider the introduction of any additional 
reporting requirements to be necessary at this stage.
47
The Commission confirms the 20 % target to be expressly related to the EU budget spending, and considers that it 
would not be appropriate to mix non-financial elements into tracking a financial target.
At the same time, we recognise that the link between spending, mobilised actions, and results should be improved. 
In the context of different spending programmes and depending on the degree to which they focus on investment 
in climate action, output and result indicators have been set and, for certain common indicators, can be aggregated 
at EU level. Such common indicators have been developed based on policy learning within the specific programme 
concerned (i.e. an indicator measuring GHG emissions from agriculture is included in the monitoring and evaluation 
framework of the common agricultural policy (CAP). An ERDF specific output indicator of reduction in GHG emis -
sions is defined for funded infrastructure investments).
That said, it is currently not technically possible to prepare consolidated data on, for instance, reduction in GHG 
emissions from activities financed through the EU budget.
48
ERDF common indicators have common definitions which are recommended in Commission guidance7, which was 
discussed with Member State (MS) experts before finalisation. While it was possible to propose a methodology for 
measuring GHG reductions in renewable sand energy savings, there was no consensus and multiple methods avail -
able for other such calculation in other domains. All data that is collected using common or specific indicators will 
be available for evaluation and can potentially add to further policy learning.
49
The Commission considers that progress on climate mainstreaming has been made in most respects and achieving 
the target is feasible. The Commission refers to the recent analysis provided in the MFF MTR published on 14 Sep -
tember (as referred to in its reply to paragraph 28, inter alia) and confirms its intention to continue its efforts to 
mainstream climate in the EU programmes.
7 http://ec.europa.eu/regional_policy/sources/docoffic/2014/working/wd_2014_en.pdf
Reply of the Commission 70
50
As announced in the MFF MTR, the Commission points out that it plans to assess progress on the 20 % target in the 
mid-term reviews of individual programmes, which provide an opportunity to further mainstream climate into the 
EU spending programmes.
51
The Commission reiterates that it does not consider the methodology agreed for the EU climate tracking approach 
to pose a risk to climate mainstreaming, but takes note of the Court’s simulations using different co-efficients for EU 
agriculture spending.
First indent
The Commission considers that the method it uses has been prepared in a transparent and coordinated manner; it 
has been communicated to the European Parliament and the Council and it does not lead to overestimation.
See also Commission reply to paragraph 53.
Second indent
Likewise, the climate-coefficients for rural development have been set up in a transparent manner, in line with the 
political objective of 20 %.
Third indent
The Commission considers that its estimates of the overall climate contribution of both CAP funds is based on an 
EU agreed methodology, on which full details are provided yearly in the programme statements accompanying the 
Commission’s draft budget.
As pointed out in its reply to paragraph 35, the Commission does not consider a set of principles developed by 
a group of international aid organisations in 2015 for mitigation tracking of their operations to be a relevant point of 
reference for the approach agreed at EU level. The Commission underlines that the Court’s calculations used in the 
report differ from the ones agreed at EU level which are sufficiently conservative.
Fourth indent
Horizon 2020 represents a considerable increase in research of this field as regards FP7. The ‘Cooperation’ part of 
FP7 is estimated to have contributed EUR 2.4 bn to climate action (2007-2013), whereas for only the first 2 years 
(2014-2015) of Horizon 2020 the figure is EUR 3.2 bn.
Nevertheless, an action plan for a further boost in this respect is already in place (see Commission reply to para -
graph 60) in order to reach the projected spending level (as indicative target) set out in the Horizon 2020 regulation.
Reply of the Commission 71
53
The Commission takes note of the Court’s simulations using different methodologies and general principles agreed 
by some international aid organisations, but reiterates its commitment to the EU approach. The method used by the 
Commission is sound, it has been prepared in a transparent and coordinated manner; it is based on Rio markers and 
it was communicated to the European Parliament and the Council.
The benefit of cross compliance for climate actions can be assessed by applying a Rio marker of 40 % to a share of 
20 % of non-greening direct payments. As for any other calculation this is a proxy, based on the penalty system of 
cross compliance. However, the Commission considers that a climate impact of 8 % of non-greening direct pay -
ments is not overestimated considering the benefits of cross compliance and direct payments for the climate.
See Commission reply to paragraph 51.
Box 3 — Lack of appropriate justification for non-greening direct payments’ climate 
contribution
See Commission reply to paragraph 51.
54
The Commission considers that the elements applied are sufficiently conservative.
See Commission reply to paragraph 51, first indent.
55
The climate tracking of the European Agricultural Fund for Rural Development (EAFRD) expenditure follows the 
principle of applying a marker to policy objectives, as expressed in rural development Union priorities and focus 
areas. Since MS can programme measures in a flexible manner, depending on their expected contribution to these 
different objectives, tracking needs to be carried out at the level of these EAFRD priorities rather than at measure 
level.
Due to this intervention logic and the principle of shared management it is the Member States which determine 
which priority or focus area a measure contributes to most.
As an example, measure 13 under the areas facing natural constraints (ANC) scheme has been programmed under 
four different priorities/focus areas. Those MS which have programmed measure 13 under priority four consider it 
more relevant for achieving the objectives of this priority.
Common Commission reply to paragraphs 56, 57, 58 and Box 4
The Commission takes note of the Court’s reflections on the shortcomings of the tracking methodology for the 
EAFRD and the simulations based on different approaches.
The current tracking methodology for EAFRD tries to strike a balance between providing a reasonably reliable esti -
mate for climate related expenditure and minimising the administrative burden and costs.
Reply of the Commission 72
The Court’s proposed approach of applying different climate coefficients to different measures/operations within 
specific focus areas and Union Priorities would increase the accuracy, but would also lead to an increase of the 
administrative burden on national and regional administrations.
Priority 4 should be attributed a 100 % marker since it includes measures which contribute to protecting the envi -
ronment and strengthening the resilience of ecosystems to adapt to climate change. Taken into account the variety, 
diversity and complexity of operations under Union priority 4 (e.g. agri-environment and climate measures) a differ -
entiation by measure/operation would render the tracking exercise burdensome and difficult for Member States.
The ANC measure (areas facing natural constraints) in EAFRD is important to prevent land abandonment and main -
tain the environmental and economic value of farming the areas under natural constraints. It helps to maintain agri -
cultural ecosystems which could be lost without support which is important in the context of both climate change 
adaptation and mitigation (e.g. pastures). The new designation approach based on commonly agreed biophysi -
cal criteria to be set up during the current programming period will lead to a stronger focus on keeping the most 
vulnerable agricultural land farmed and thus increase the importance of the measure for climate change mitigation 
and adaptation.
59
The Commission considers that the specific tracking methodologies specified in the Programme Statement of 
EAFRD and LIFE Programme referred to in this paragraph have been agreed within the EU tracking methodology 
which was developed to be used over the current programming period.
60
Horizon 2020 represents a considerable increase in research of this field as regards FP7. While direct comparisons of 
the whole programme are not possible, the ‘Cooperation’ part of FP7 is estimated to have contributed EUR 2.4 bn 
to climate action over the 7 years of the programme (2007-2013), whereas the last validated figures for only the first 
2 years (2014-2015) of the comparable ‘programmable’ parts of Horizon 2020 are EUR 3.2 bn. Therefore, although 
the current figures are below the initial projected spending level, they do represent a positive signal of the Commis -
sion’s commitment.
The Introductions to the ‘main’ Work Programmes for 2014-2015 and 2016-2017 have provided clear indications 
on climate-related expenditure through relevant references to calls/topics, where appropriate. In this context, the 
Commission services have been carefully and continuously monitoring all Horizon 2020 work programme topics in 
terms of climate-related expenditure to measure the progress towards Horizon 2020 projected spending level.
The action plan launched last year gives a further boost in this respect. Moreover, the ongoing 2018-2020 strategic 
programming process recognises the importance of mainstreaming climate action and increasing related expendi -
ture. Once the strategic programming process has been finalised, more quantitative aspects for 2018-2020 can be 
addressed.
Reply of the Commission 73
61
The contribution of bottom-up initiatives to climate action cannot be established until the individual projects have 
been selected for funding and may well vary year on year.
62
The Commission is closely monitoring the progress of this indicator and still has some margin of manoeuvre. By 
the time the next Work Programmes are approved (ca. autumn 2017) the Commission will have updated figures 
to determine more accurately the state of play and the budget required for the years 2018-2020. The MFF MTR (as 
detailed in the Commission reply to paragraph 28) also explicitly highlights elements that should support further 
climate mainstreaming in Horizon 2020.
63
The 2018-2020 strategic programming process is ongoing and identifies climate action as a strong priority. Once 
the strategic programming process has been finalised, more quantitative aspects for 2018-2020 including budget 
allocation for climate action can be addressed.
64
The Commission action plan should be complemented with ‘quantifiable targets’. However, the best time to set 
these is when drafting the Work Programmes for 2018-2020 which are not yet completed.
65
The Commission confirms that no comparable data regarding climate related spending under the previous MFF 
exist. At the same time, the Commission considers that the major increase in climate spending in the Court’s esti -
mates for some programmes (notably those in paragraph 69) broadly confirm the scale of the Commission’s working 
level estimates from the beginning of the MFF.
67
The Commission considers that the primary benefit of climate tracking in the EU budget lies in supporting a cli -
mate-friendly design of spending measures across EU programmes. We recognise that the examples highlighted in 
the section do not provide ground for drawing broader conclusions and can only serve as illustrations.
70
The Commission stresses that the aim of its mainstreaming approach is to integrate climate considerations across 
the EU budget instruments, and that the change in the composition of climate relevant spending mirrors the 
changes in the spending priorities in individual programmes and the roles of different financing sources available at 
country level.
Reply of the Commission 74
71
The variations in climate relevant spending in different country programmes reflect to a great extent the sector pri -
orities of the country, and thus should not be seen as an indication of broader or narrower commitment to climate 
action.
75
The targeting of research and innovation (R&I) activities on particular sectors or clusters (such as low carbon econ -
omy) were expressly not the subject of detailed discussions in programming. The negotiation of R&I objectives was 
subject to the ex ante  conditionality on smart specialisation. Had the Commission intervened to have a stronger 
climate-related orientation as regards research and innovation in the German and Romania OPs it would have been 
contrary to the legally established ex ante  conditionality on smart specialisation strategies for which a bottom-up 
process is essential. The Commission services are observing that sustainable energy and climate are one of the top 
priories of these strategies.
76
The Commission notes that the European Social Fund (ESF) programmes can respond to any changes in demand for 
green skills as and when they emerge.
Common Commission reply to paragraphs 77-79
The Commission notes that while the contribution of all the ESI Funds together to climate action exceeds 25 %, 
the individual contribution of each of the funds is inevitably set to vary according to how closely its specific pri -
mary missions are linked to climate action. For the ESF, such a contribution can only be indirect, in particular 
through investments into green skills, which are in turn closely related to labour market developments and hence 
demand-driven.
The Commission notes that the monitoring system to track the ESF contribution to climate action has been 
strengthened in the 2014-2020 financial period in particular by including climate action as a ‘secondary theme’ for 
tracking the ESF contribution.
Notwithstanding, the Commission admits that the ESF contribution to climate action can be better valorised, and 
will consider options to this end in the future.
81
With the last CAP reform the scope of cross compliance was subject to a considerable review in light of the fact if 
requirements were controllable, directly addressed to farmers and linked to farming activity. As a result, the list of 
Good Agricultural and Environmental Conditions (GAECs) was shortened by more than 50 % (from 15 to 7) and the 
statutory management requirements (SMRs) reduced from 18 to 13.
Reply of the Commission 75
82
The Commission does not share the view that the greening of direct payments is largely based on the previous 
GAECs. The requirements for ecological focus area and crop diversification are new and the protection of perma -
nent pasture has been strongly reinforced with for instance the full protection of environmentally sensitive perma -
nent grassland and a reduced margin of possibility to plough up permanent grassland.
The Commission also believes that the greening of direct payments has a significant impact rather than a limited 
impact. The impact fairly reflects the climate-relatedness of the three farming practices. While indeed the greening 
requirements do not affect all farmers, the available information also shows that 72 % of the total agricultural area is 
concerned, which is even more relevant with regard to climate action.
84
Climate mainstreaming does not require each region/Member State to step up the investment in climate change 
mitigation or adaptation. Climate action has to be given due consideration in the SWOT analysis and the identifica -
tion of needs and are evaluated against other priorities. The basis of comparison has changed in the two program -
ming periods. In particular, the effect of the economic crisis has in many areas led to a greater need of enhancing 
the economic situation in the farming sector which has been affected by the crisis. Against this background, the 
stabilisation of climate-related expenditure (even if this cannot be precisely quantified due to a lack of appropriate 
methodologies) is not a negative outcome.
85
The setting of selection criteria is a responsibility of the Member States. The Commission provided guidance on the 
‘potential for climate action in EAFRD’ which included a recommendation to design selection criteria.
89
The objective to adapt fishing capacity to available resources through financial support to fleet management meas -
ures was partially achieved in the last programming period. This explains the reduced support from the EMFF to 
fleet measures compared to the previous period under the EFF.
Conclusions and recommendations
91
The Commission stresses that the undertaking to increase climate-related spending to at least 20 % of the EU 
budget was a political commitment intended to mainstream climate action across EU programmes.
Reply of the Commission 76
92
The Commission considers that, in general, important progress has been made both in including climate considera -
tions in programme development and in developing the unique quantified mainstreaming approach, which now 
provides a transparent baseline.
The Commission notes, however, that the potential individual contribution of each of the funds is set to vary accord -
ing to how closely its specific primary missions are linked to climate action. It is, therefore, inevitable that the sys -
tems used to programme and to monitor the contribution would differ from one fund to another.
Nevertheless, the Commission considers that it is broadly on track towards the 20 % target, while recognising that 
further efforts are needed, as outlined in the MFF MTR.
93
The Commission highlights that the 20 % objective was announced as one element of the mainstreaming approach 
in the EU budget, with is in itself one element in the EU approach to responding to the investment needs associated 
with climate change (see Commission reply to paragraph 24).
The mainstreaming approach in the EU budget demonstrates the EU commitment to and leadership in climate 
action, like all EU actions to fight climate change.
The Commission has assessed progress towards the 20 % target in the MFF MTR, as explained in its reply to para -
graph 28.
94
With the programming processes completed, the Commission is now in a position to consolidate the reliable data 
for updated estimates of these programmes with regard to climate spending, and has published the state of play 
in the context of the MFF MTR. This exercise would have been based on inaccurate data and thus could have led to 
erroneous interpretations, if undertaken on the basis of the 2014-2016 data.
The MFF MTR estimates that over the 2014-2020 period a total of slightly above EUR 200 billion of climate-related 
spending will be reached. This is equivalent to around 18.9 % for the whole financial programming period.
95
The Commission underlines that the EU method of tracking climate-related spending is pioneering a quantified 
approach to monitoring budgetary spending. As such, there are opportunities for further improvement, while over -
all the methodology is robust and transparent.
Recommendation 1 — Robust multi annual consolidation exercise
The Commission accepts the recommendation with regard to carrying out a robust, multi-annual consolidation 
exercise to identify whether programmed climate expenditure is on track to achieve the 20 % target, and considers 
it delivered within the context of the MFF MTR. The Commission plans to continue monitoring progress annually in 
the context of preparing annual draft budgets.
Reply of the Commission 77
Recommendation 2 — Comprehensive reporting framework  
(a)
The Commission partially accepts the recommendation.
It accepts to show relevant aspects of, and progress made on, climate action in the relevant AARs as appropriate. 
The new Annual Management and Performance report (AMPR) summarises (section 1) the EU budget performance 
based on the latest available evidence on the results achieved with the EU budget. This reporting draws on informa -
tion from the Annual Activity Reports; the budgetary Programme Statements; and other sources such as evaluation 
and implementation reports on EU programmes. The report provides a summary account whereas further detailed 
reporting on programmes’ objectives and progress on indicators are available in the Annual Activity Reports and 
Programme Statements.
The Commission does not accept the recommendation to report on financial instruments in the context of tracking 
budgetary effort towards the 20 % target.
(b)
The Commission notes that this recommendation is addressed to the Member States.
(c)  
The Commission does not accept the recommendation. While committed to improving the granularity of data, the 
implications of such additional administrative burden imposed on both the Commission and the Member States are 
unclear. The Commission will consider the possibility of differentiating between mitigation and adaptation if the 
methodology is revised in the future, and highlights that the two are closely interlinked.
96
The Commission agrees that further efforts are needed to mainstream climate across EU programmes. The politi -
cal objective of 20 % was set to foster mainstreaming (see also Commission reply to paragraph 25). The Commis -
sion considers such flexibility in relation to the 20  % target as appropriate in developing an innovative approach to 
mainstreaming and tracking climate relevant spending. The EU mainstreaming approach seeks to integrate climate 
aspects into all policies and uses the 20 % target to foster mainstreaming.
The Commission has assessed progress towards the 20 % target in the MFF MTR, as explained in the Commission 
reply to paragraph 28.
Recommendation 3 — Assessment of climate change needs
The Commission partially accepts the recommendation.
The Commission accepts to consider the climate change needs and the potential to contribute of different areas 
when proposing a new overall political target. The Commission does not accept to plan specific contributions for 
each area or programme.
Reply of the Commission 78
97
The Commission considers that good progress has been made in climate mainstreaming in the EU budget and that 
the EU methodology is transparent and fit for purpose.
The Commission refers to its reply to paragraph 29 with regard to the nature of the climate spending in various 
instruments. It points out that the legal texts differ in their integration of the political objective of climate main -
streaming which in several cases is introduced as a political ambition in the preamble, not a legally binding target. 
See also Commission reply to paragraphs 25 and 26.
The Commission has outlined its projection for climate-related spending until 2020 in the context of the MFF MTR.
98
The EU approach to climate mainstreaming was built on international practices and has developed a quantified 
tracking methodology that balances the administrative burden and robustness of data.
The Commission notes the Court’s calculations based on other methods of climate tracking, but does not consider 
that these should be given preference over the innovative and detailed mainstreaming approach that has been 
agreed in the EU.
99
The Commission acknowledges that there is a possibility of over- and under-estimation of certain spending elem-  
ents of climate relevance under the current methodology. At the same time, we do not consider a set of principles 
developed by a group of international aid organisations in 2015 for mitigation tracking of their operations to be 
a relevant point of reference for the approach agreed at EU level. The method used by the Commission is sound and 
has been prepared in a transparent and coordinated manner and was communicated to the European Parliament 
and the Council.
The Commission estimates the overall climate contribution of both CAP funds on the basis of a sound methodology, 
on which full details are provided in the programme statements accompanying the Commission’s Draft Budget.
The Commission believes that for green direct payments the impact fairly reflects the climate-relatedness of the 
three farming practices. For non-greening direct payments, their benefit for climate actions in association with 
cross compliance can be assessed by applying a Rio marker of 40 % to a share of 20 % of non-greening direct pay -
ments. As for any other calculation this is a proxy, based on the penalty system of cross compliance. However the 
Commission believes that a climate impact of 8 % of non-greening direct payments is not overestimated if we look 
at the benefits for the climate of cross compliance and direct payments. This calculation fully reflects the principle 
of conservativeness.
100
The Commission estimates the overall climate contribution of both CAP funds on the basis of a sound methodology, 
on which full details are provided in the programme statements accompanying the Commission’s Draft Budget.
Reply of the Commission 79
Recommendation 4 — Correct overestimations
The Commission partially accepts the recommendation. The tracking methodology needs to remain stable during 
the current MFF for reasons of predictability, consistency and transparency. However, the Commission will con -
sider ways of fine-tuning the tracking methodology for the EAFRD for the post-2020 programming period without 
increasing the administrative burden.
101
The Commission action plan will be complemented with more detailed, quantifiable targets. However, the most 
suitable time to set these is when drafting the Work Programmes for 2018-2020, not yet completed.
102
The Commission recognises that additional efforts are needed in several programmes to improve mainstreaming, 
but does not consider specific action plans to increase climate spending would have an added value.
Recommendation 5 — Draw up action plans
The Commission partially accepts the recommendation.
The Commission will assess opportunities to increase climate relevance in the context of the Mid-term Reviews of 
individual programmes and policies, as set out in the MFF MTR. Pending the outcome of these reviews, the Com -
mission will consider corrective action. Instituting individual action plans would not be appropriate as individual 
programmes already provide processes for priority setting depending on the management mode.
103
The Commission considers that tracking commitment appropriations was a necessary first step to better integrat -
ing climate actions into the EU budget and provides a reasonable proxy, balancing the administrative burden of 
an additional layer of monitoring. The current estimates are indeed done on the basis of programmed expenditure 
(draft budget), they are however updated based on the actual voted budget and amending letters. The Commission 
will assess the cost-effectiveness of providing ex post  estimates based on actual commitments. However, calcula -
tions based on the actual payments would create additional administrative burden since the payments may last for 
years and may be subject to financial corrections. The Commission can however provide an estimate, as approxi -
mately 97  % of commitment appropriations become payment appropriations.
The Commission agrees with the need to strengthen the focus on results of the EU spending. However, the current 
performance framework set by the legislator provide for climate-related indicators only for a part of the spending 
and these indicators cannot be aggregated at the level of the EU budget. The lessons learnt will be taken into con -
sideration in the setup of the next MFF performance framework.
Reply of the Commission 80
Recommendation 6 — Develop indicators monitoring actual spending on climate 
action and related results  
(a)
The Commission does not accept the recommendation to develop a new monitoring system at this stage. It would 
lead to an increase in the level of the administrative burden imposed on Member States which was not foreseen 
under the current regulations and were not included in the partnership agreements and Operational Programmes. 
The Commission will continue to use the monitoring systems in place that also provide data on expenditure.
(b)
The Commission accepts the recommendation and will implement it as explained below.
It will strengthen and improve comparability of the climate-related results indicators in all EU budget areas, and 
will consider options in the context of the next MFF to establish climate-related results indicators to assess the EU 
budget contribution to climate action, in particular to assess greenhouse gas emissions and reductions brought 
about through EU-funded measures.
(c)
The Commission accepts the recommendation which it considers as implemented as explained below.
It will continue to actively promote the exchange of good practices also in the specific area of climate-related result 
indicators. For example, the Expert group on monitoring and evaluation for the CAP already provides a forum for 
exchanges of good practices on the evaluation of the CAP , including on such indicators.
105
The targeting of research and innovation activities on particular sectors or clusters (such as low carbon economy) 
were expressly not the subject of detailed discussions in programming. The negotiation of R&I objectives was 
subject to the ex ante  conditionality on smart specialisation. Had the Commission intervened to have a stronger 
climate-related orientation as regards research and innovation in the OPs this would have been contrary to regula -
tory requirements, in particular the fact that smart specialisation strategies are a bottom-up process. In that context 
the trend is that investments in R&I in energy-low carbon themes are likely to be significantly higher that set out in 
the programmes and captured initially in the tracking methodology.
106
The Commission underlines that as the ESF contribution to climate action can only be indirect, in particular through 
investments into green skills, which are in turn closely related to labour market developments and hence demand-
driven, the actual share of the ESF allocated to climate-related expenditure will only be known after the pro -
grammes’ implementation.
The Commission considers that the share of the ESF allocated to climate-related expenditure established on the 
basis of the information reported by the Member States in the ESF operational programmes may therefore underes -
timate the expected contribution of the ESF to climate action in the 2014-2020 period.
The Commission refers to its common reply to paragraphs 77-79.
Reply of the Commission 81
107
The reform of the CAP has led to a significant increase in the financing of climate action as compared to the 2007-
2013 period.
108
The Commission does not share the view that the greening of direct payments rests in practice largely on already 
existing agricultural practices. Instead the Commission believes that the introduction of greening will significantly 
contribute to additional climate actions. The requirements for ecological focus area and crop diversification are 
indeed new and the protection of permanent pasture has been strongly reinforced with for instance the full protec -
tion of environmentally sensitive permanent grassland and a reduced margin of possibility to plough up permanent 
grassland.
The green payment has de facto increased the baseline beyond which environmental practices can be paid under 
rural development programmes. The payments granted for types of operations programmed under the agri-envi -
ronment climate measure can only be made for commitments and requirements going beyond the greening obliga -
tions. This implies higher environmental and climatic outcomes.
109
There is an increased focus on monitoring EMFF spending in climate action in the MS EMFF annual implementation 
reports. See Commission reply to paragraph 43.
Recommendation 7 — Explore all potential opportunities and ensure a real shift 
towards climate action  
(a)
The Commission partially accepts the recommendation in the same sense as for Recommendation 5, i.e. that it will 
identify the areas with under-utilised potential and consider opportunities and actions to increase climate relevance 
in their spending programmes in the context of their individual Mid-term Reviews. However, it will not develop 
specific action plans on climate spending for individual programmes.
Recommendation 7  
(b)
The Commission does not accept this recommendation. Changing the multiannual financial programming at this 
stage in ESIF programmes managed under shared management, with financing structures that are determined by 
pre-allocated envelopes, is neither practicable nor feasible. Similarly not feasible within this programming period 
are the development and adoption of new climate action measures in the legislative framework (e.g. of the EMFF).
At the same time the Commission will consider options to strengthen climate mainstreaming in the context of the 
midterm reviews of individual programmes.

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Event Date
Adoption of the Audit Planning Memorandum/Start of audit 14.10.2015
Official sending of draft report to Commission (or other auditee) 2 2.7. 2016
Adoption of the final report after the adversarial procedure 26.10.2016
Commission’s (or other auditee’s) official replies received in all languages 14.11.2016
In order to respond to climate change and the associated 
substantial investment needs, the EU has agreed that at 
least 20 % of its budget for 2014-2020 should be spent on 
climate-related action. We found that ambitious work was 
underway and that, overall, progress had been made. 
However, there is a serious risk that the 20 % target will not 
be met without more effort. The implementation of the 
target has led to more, and better-focused, climate action 
funding in the European Regional Development Fund and 
the Cohesion Fund. In the European Social Fund, and in the 
areas of agriculture, rural development and fisheries, 
however, there has been no significant shift towards climate 
action.
EUROPEAN
COURT
OF AUDITORS