Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) 2021/1058 and (EU) 2021/1056 as regards specific measures to address strategic challenges in the context of the mid-term review
Date: 2025-04-01
Institutions: Directorate-General for Regional and Urban Policy, European Commission
Subjects: Cohesion Fund, Community support framework, European Regional Development Fund, European defence policy, adaptation to climate change, economic and social cohesion, energy transition, housing policy, investment promotion, twin transition

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   EUROPEAN COMMISSION  Strasbourg, 1.4.2025  COM(2025) 123 final 2025/0084 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) 2021/1058 and (EU) 2021/1056 as regards specific measures to address strategic challenges in the context of the mid-term review  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The mid-term review of cohesion policy presents an opportunity for Member States to redirect 
2021-2027 resources towards investment in defence capabilities and for the competitiveness 
and strategic autonomy of the EU and in other emerging priorities, including clean industrial 
deal  objectives  by  submitting  corresponding  programme  amendments  to  the  Commission. 
However, the framework for cohesion policy investments set out in the ERDF, Cohesion Fund 
and  JTF  regulations  is  not  sufficiently  aligned  with  these  new  priorities.  Furthermore, 
additional flexibility  is  required to  accelerate investment  in  these areas, notably to  reinforce 
the resilience of the EU economy and all its regions at a critical geopolitical juncture such as 
the one the EU is  currently facing.  This  proposal sets  out  a number of adjustments to  these 
regulations to achieve these objectives. 

Aligning cohesion policy investments to new priorities 

In  recent  years,  geopolitical  dynamics  have  been  marked  by  profound  uncertainty, 
necessitating  a  fundamental  re-evaluation  of  the  EU’s  strategic  autonomy,  resilience  and 
preparedness.  These  shifts  are  unfolding  alongside  the  green,  social  and  technological 
transitions, which are rapidly reshaping the world around us. The challenges posed by these 
simultaneous transformations were comprehensively analysed in the report on the “Future of 
European Competitiveness”, published in September 2024. The report underscores the urgent 
need  to  close  the  innovation  gap,  accelerate  decarbonisation  efforts  to  strengthen  economic 
competitiveness, and reduce external dependencies by diversifying supply chains and scaling-
up  domestically  produced  green  energy  investing  in  climate  resilience,  digitalisation  and 
critical sectors. 

In  response,  several  major  initiatives  have  already  been  launched  to  enhance  the  EU’s 
economic  resilience  and  strategic  autonomy.  These  include  the  “Strategic  Technologies  for 
Europe  Platform”  (STEP),  which  aims  to  strengthen  Europe’s  technological  leadership; 
“REPowerEU”,  designed  to  reduce  reliance  on  external  energy  sources  and  accelerate  the 
green transition, to complete interventions already underway via cohesion policy programmes 
and the “Recovery and Resilience Facility” (RRF), to support structural changes in Member 
States and regions as well as to enhance their resilience. 

As the EU’s main investment instrument within the Multiannual Financial Framework (MFF), 
cohesion  policy  plays  a  crucial  role  in  supporting  these  priorities.  It  drives  targeted 
investments that contribute to economic, social and territorial cohesion while at the same time 
addressing  emerging  challenges.  However,  the  regulatory  framework  governing  the  2021-
2027  cohesion  policy  funds  was  drafted,  negotiated  and  adopted  before  the  series  of  major 
geopolitical and economic events that have since reshaped some of the EU’s strategic political 
priorities. 

Similarly,  the  Partnership  Agreements  and  the  national  and  regional  cohesion  policy 
programmes were developed and approved within this same timeframe, hence reflecting the 
priorities set at the time. Given the evolving global and regional context, the 2025 mid-term 
review presents a critical opportunity to assess their implementation and the effectiveness of 
their  contribution  to  the  evolving  priorities.  This  review  will  help  determine  the  extent  to 
which  cohesion  policy  programmes  can  directly  and  swiftly  respond  to  rapidly  changing 
political, economic and social realities. 

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At  the  same  time,  it  has  become  evident  that  the  early  implementation  of  the  2021-2027 
cohesion policy programmes has faced challenges which have not been conducive to a swift 
uptake  and  rapid  disbursement  of  the  funds,  leading  to  delays  in  their  implementation 
compared  to  previous  programming  periods.  These  delays  come  at  a  time  when  strong  and 
accelerated investment is essential to support economic resilience and competitiveness. 

•  Against this backdrop, the Commission is proposing targeted amendments to Regulations 
(EU)  2021/1056  and  (EU)  2021/1058.  These  changes  aim  to  adjust  investment  priorities 
with the evolving economic, societal, and geopolitical context, as well as with our climate 
and  environment  objectives,  while  at  the  same  time  introducing  greater  flexibility  and 
incentives to facilitate and encourage the rapid deployment of much-needed resources. By 
refining the 2021-2027 cohesion policy framework, the EU can ensure that its investment 
mechanisms remain agile and responsive, enabling a more effective response to current and 
future challenges.  

•  In  order  for  Member  States  to  make  effectively  use  of  the  possibilities  provided  in  this 
proposal,  the  Commission  proposes  that  they  be  allowed  to  re-submit  their  mid-term 
review  proposal  by  2  months  after  the  entry  into  force  of  the  present  proposal  for 
amendment  to  Regulation  (EU)  2021/1058.  Any  programme  amendment  that  would  be 
carried out pursuant to the new priorities and flexibilities, shall be without prejudice to the 
application  of  any  measures  adopted  under  Regulation  (EU)  2020/2092  and  to  the 
compliance  by  relevant  programmes  with  the  priorities  under  Article  15  of  Regulation 
(EU) 2021/1060. In this context the Commission will closely monitor the conformity of the 
programmes with the requirements of relevant EU law. 

Competitiveness and decarbonisation 

The  Commission  presented  in  the  Competitiveness  Compass,  the  Clean  Industrial  Deal  and 
the Affordable Energy Action Plan a concrete path  for Europe to  regain its competitiveness 
and secure sustainable prosperity, with decarbonisation and circularity as drivers of growth. 

In particular, energy intensive industries play a critical role in our regions and require special 
attention  as  part  of  the  reprogramming  of  EU  funds.   These  industries  face  significant 
challenges, including higher energy costs compared to their global competitors, the continued 
lack of competitiveness of certain clean technologies, a slow-down in demand in some of the 
main  downstream  sectors,  increased  international  competition  driven  by  overcapacities  and 
subsidised  production  in  non-EU  countries  As  a  result,  these  factors  undermine  the 
competitiveness  of  energy  intensive  industries  and  weaken  Europe’s  decarbonisation  and 
resilience objectives. 

The  cohesion  funds  can  already  support  investments  to  climate  objectives  as  laid  down  in 
Regulation  (EU)  2021/1060  but  efforts  should  be  further  accelerated  in  order  to  ensure  that 
decarbonisation  is  a  driver  for  growth  for  European  industries  and  the  prosperity  of 
Europeans.  In  light  of  the  significant  investment  needs  to  achieve  our  decarbonisation  and 
competitiveness  objectives,  Member  States  need  to  continue  investing  in  projects  directly 
contributing  to  the  climate  and  energy  transition  in  line  with  the  requirements  set  out  in 
Article 6 of Regulation (EU) 2021/1060 which will continue to apply to maintain the level of 
climate related investments.  

Support  for  projects  within  the  scope  of  STEP  should  be  made  possible  in  all  regions, 
including in the more developed regions in Member States of the Union with GDP per head 
above the EU average to the extent it is allowed by State aid rules as set out in Articles 107 
and 108 of the Treaty, in particular to the extent such investments contribute to the Union’s 

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strategic objectives as set out in the applicable guidelines such as the future Clean Industrial 
State aid Framework (currently in public consultation) and in the IPCEI Communication1.  

Furthermore, other restrictions linked to STEP as regards the ceiling set at 20% of the ERDF 
allocation  for  reprogramming  should  be  removed  and  the  deadline  for  submitting  STEP 
amendments  and  benefit  from  the  additional  one-off  prefinancing  deleted.  This  should  also 
help in promoting investments in innovative clean technologies (manufacturing capacities and 
deployment)  that  are  essential  to  deliver  on  the  objectives  of  the  Clean  Industrial  Deal  and 
also in other important support areas for which STEP provides important incentives. 

It  is  important  to  recognise  and  strengthen  the  role  also  of  large  enterprises  in  regional 
development, as they steer research, innovation, knowledge, and technology transfer towards 
other companies and create demand and employment throughout the supply chain. With the 
objective  to  maximise  the  impact  of  EU  support  to  boost  growth  and  competitiveness,  the 
Commission  also  proposes  to  expand  the  possibilities  to  provide  support  for  productive 
investments  in  enterprises  other  than  SMEs  under  the  ERDF  in  cases  where  the  financial 
resources  are  used  for  (1)  supporting  investments  contributing  to  the  STEP  objectives,  (2) 
enhancing the industrial capacities to foster defence capabilities, (3) contributing to  a defence 
projects and (4) facilitating industrial adjustment linked to the decarbonisation and support to 
circular processes of production processes and products, such as in the automotive and energy 
intensive industries, to the extent allowed by State aid rules. Investments in projects directly 
participating in an IPCEI as approved by the Commission pursuant to Article 107(3), point (b) 
TFEU,  and  to  Communication  C(2021) 8481,  in  enterprises  other  than  SMEs  may  also  be 
supported.  Support  for  such  enterprises  needs  to  be  further  facilitated  under  the  Just 
Transition Fund as well by not requiring a gap analysis. Therefore, it is proposed that Member 
States  are  allowed,  in  line  with  State  aid  rules,  to  directly  grant  support  from  ERDF  to 
projects directly participating in an Important Project of Common European Interest approved 
by the Commission pursuant to Article 107(3), point (b), of the Treaty of the Functioning of 
the European Union (TFEU) and to Communication C(2021) 8481. 

To  further  enhance  the  leverage  of  InvestEU,  the  EU  flagship  programme  to  boost 
investments  in  strategic  and  critical  industries,  and  further  the  transfer  possibilities  already 
provided  by  the  legislation,  the  Commission  proposes  to  make  possible  the  transfer  of 
resources from  the ERDF and the Cohesion  Fund to  InvestEU  Member  State  compartments 
for implementing a new InvestEU financial instrument for the achievement of cohesion policy 
objectives.  

Defence and security  

In the face of unprecedented geopolitical instability in decades, the European Union must now 
make  crucial  decisions  to  ensure  its  readiness  and  security.  To  guarantee  its  own  defence 
deterrence, Europe must be prepared to enter a new era by significantly increasing its support 
for  the  development  of  the  defence  capabilities,  reduced  dependencies,  infrastructure 
resilience  and  the  competitiveness  of  the  EU  defence  industry.  This  effort  will  enable  the 
Union to address the short-term urgency of supporting Ukraine while ensuring the continent’s 
long-term stability. 

The  Commission  has  proposed  to  the  European  Council  an  immediate  response  plan  — 
REARM Europe — amounting to EUR 800 billion, by activating all available financial levers 
to swiftly and significantly support investment in European defence capacities. Among these 

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Communication on the criteria for the analysis of the compatibility with the internal market of State aid 
to promote the execution of IPCEIs (OJ C 528, 30.12.2021, p. 10). 

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levers,  the  Union  budget  can  further  contribute  to  this  collective  effort  through  a  new 
dedicated  defence  instrument  and  the  strengthening  of  the  European  Defence  Industry 
Programme (EDIP). 

To complement these tools and further incentivise Member States to directly support defence 
investments,  it  is  essential  that  cohesion  policy  funding  can  be  swiftly  mobilised.  These 
investments  will  reinforce  the  resilience  and  EU  competitiveness  while  promoting  regional 
development  and  growth.  They  will  also  tackle  the  dual  challenge  faced  by  the  Union’s 
regions bordering Russia, Belarus and Ukraine: strengthening security while revitalising their 
economies. 

In  order  to  provide  for  a  framework  that  allows  for  flexibility  and  financial  support,  the 
Commission proposes to create two new specific objectives within the existing scope of the 
ERDF support. The first new specific objective allows Member States to reprogramme under 
their  2021-2027  programmes  under  the  Investments  for  jobs  and  growth  goal  amounts  for 
enhancing  productive  capacities  in  enterprises  in  the  defence  sector  without  restriction  in 
terms of geography or size of the enterprise. Productive investments in enterprises other than 
SMEs and made in all EU regions should also be able to access financial support for defence 
industry projects of common interest under EDIP and reinforce Europe’s overall defence and 
preparedness  capacities. The second new specific objective related to defence contributes to 
building  resilient  defence  or  dual  use  infrastructure  to  foster  military  mobility  in  the  EU. 
These specific objectives also help eastern border regions.  

It  is  proposed  that  Member  States,  when  using  the  proposed  framework,  benefit  from  an 
additional  one-off  pre-financing  of  30%  of  the  amounts  programmed  under  the  dedicated 
priority and the possibility to apply a Union financing of up to 100% regarding both specific 
objectives – provided that the programme amendment is submitted in 2025.  

Affordable housing (including social housing) 

Housing prices and rents have increased significantly over the past years. At the same time, 
wages have not increased at a similar pace. This uneven evolution has created a widening gap 
between the availability of affordable housing and the needs of the population. 

The  average  house  prices  declined  after  2008  following  the  economic  recession  but  have 
consistently risen throughout the EU since 2013. In total, there was an increase of 59% in the 
EU  between  2013  and  the  third  quarter  of  2024,  which  is  about  twice  the  increase  in  the 
overall price level (HICP) in the same period. 

The escalation of house price growth has not been matched by a corresponding rise in wages, 
leading to considerable pressure on housing affordability. The price-to-income ratio increased 
by more than 15pp between 2013 and 2022, and despite some respite in 2023 it is still above 
its long-term average. 

While the issue varies in severity from country to country and region to region, its impact is 
widespread. High housing costs force many households to allocate a disproportionate share of 
their income to rent or mortgages, leaving less for other necessities like food, healthcare and 
education – with a risk of falling into poverty. In 2023, one out of three households that are at 
risk  of  poverty  spend  40%  or  more  of  the  household  disposable  income  on  housing.  House 
prices  differ  also  between  urban  and  non-urban  areas.  Housing  prices  as  a  proportion  of 
income  are  higher  and  have  been  steadily  increasing  since  2015  in  metropolitan  and  other 
urban areas, while they remained stable in other areas. The social impact of these figures is 
wider  if  we  consider  that  they  include  the  lack  of  students  housing  and  of  adequate 
lodgements for prospective new families. 

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The  lack  of  sufficient  affordable  housing  puts  an  increasing  number  of  households  under 
severe  difficulties,  but  it  also  has  a  competitiveness  angle.  Indeed,  European  companies  in 
some areas start to have problems to attract workers because the costs of housing and living in 
those areas are disproportionately high  as compared to  income. High prices are also  putting 
public services in certain cities under pressure due to difficulties in attracting essential public 
workers (teachers, nurses, police, etc.). 

Against  this  background,  the  political  guidelines  of  the  Commission  give  housing  policy 
strong  emphasis  by  proposing  a  coordinated  approach  under  the  upcoming  European 
‘Affordable  Housing  Plan’.  As  part  of  this  overarching  ambition,  the  Commission  now 
proposes to  address  the growing  investment  gap  in  affordable housing  by allowing Member 
States  to  reprogramme  under  their  2021-2027  programmes  amounts  for  supporting 
investments that promote access to affordable housing. Investments under the New European 
Bauhaus should make full use of these new possibilities provided. 

At the same time, it must be ensured that housing is climate resilient. 

The Commission proposes to include corresponding additional specific objectives under three 
policy objectives thus allowing flexibility for Member States and regions depending on their 
programming structures and the focus of the housing interventions.  

In  order  to  incentivise  reprioritising  their  programmes  and  uptake,  and  without  prejudice  to 
compliance with State aid rules, it is proposed that Member States, when using the proposed 
framework, benefit from a 100% Union financing and a pre-financing of 30% of the amounts 
programmed  under  the  dedicated  priority.  With  a  view  to  enhancing  the  impact  of 
investments, the scope of interventions now allows to include actions linked to implementing 
reforms  under  cohesion  policy,  provided  that  the  programme  amendment  is  submitted  in 
2025. 

Access to water, sustainable water management and water resilience 

Water is a vital resource for the security of our food, energy and economic systems, yet both 
at  EU  and  global  level  water  resources  are  facing  mounting  pressures.  Effective  water 
management  is  essential  for  safeguarding  public  health,  protecting  the  environment,  and 
maintaining the EU’s economic competitiveness. Mismanagement, including over-abstraction 
and  pollution,  is  increasingly  constraining  critical  sectors  such  as  agriculture,  energy, 
manufacturing, and transport. The EU is  faced with increasing impacts from climate change 
which  exacerbate  the  existing  pressures  on  water  quality,  water  quantity  and  marine 
ecosystems.  In this context, it is urgent to enhance implementation of the water and marine 
protection  legislation  and  improve  water  efficiency, address  water  scarcity,  and  progress 
towards a water resilient Europe, requiring significant efforts and investments.  The EU water 
sector  and  blue  economy  sector  are  significant  economic  sectors  in  many  regions,  driving 
innovation,  and  safeguarding  public  health,  and  sustainability,  e.g.  by  offering  advanced 
solutions  such  as  desalination,  water  treatment,  water  reuse,  blue  biotechnology  etc.  The 
global leadership in water technologies enhances the EU’s export potential and creates jobs in 
all regions across Europe. 

The  EU  therefore  must  protect  these  water  ecosystems  and  infrastructures  by  scaling  up 
investments and consider water supply and infrastructure through the lens of ensuring access 
to and supply of water to our citizens and societies in all circumstances. 

The EU has established a strong legal framework for the sustainable and secure management 
of  water,  but  further  progress  in  implementation  is  essential  and  more  decisive  action  is 
urgently  needed.  For  that  reason,  the  EU  will  come  forward  with  an  EU  Water  Resilience 
Strategy  in  the  first  half  of  2025.  In  line  with  the  Preparedness  Union  Strategy,  water 

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resilience  requires  a  shift  from  reactive  crisis  management  to  proactive,  risk-based 
management and increased preparedness. 

In  the  2021-2027  period,  almost  EUR  13  billion  are  being  invested  in  water  services  and 
improved wastewater collection and treatment in cohesion policy programmes. But additional 
efforts from the public and private sectors are needed to ensure sufficient progress Therefore, 
to  properly  emphasise  the  importance  and  focus  of  investments  in  water  resilience,  the 
Commission  proposes  to  modify  the  wording  of  the  specific  objective  related  to  water 
management under policy objective 2 “A greener, low-carbon transitioning towards a net zero 
carbon economy and resilient Europe by promoting clean and fair energy transition, green and 
blue  investment,  the  circular  economy,  climate  change  mitigation  and  adaptation,  risk 
prevention and management, and sustainable urban mobility”.  

Cohesion  policy  investments  in  sustainable  and  secure  investments  should  be  incentivised, 
notably to contribute to build a water resilient society, through increased restoration of water 
bodies, deployment of nature-based solutions to reduce floods risk and increase the capacity 
of  ecosystems  to  store  water,  improved  control  of  water  abstractions  and  increased  water 
efficiency and reuse increased digitisation of water infrastructure, mitigation of drought and 
desertification impacts, flooding and extreme weather events, and compliance with the Water 
Framework,  the  Groundwater,  the  Urban  Wastewater  Treatment,  and  the  Environmental 
Quality  Standards  Directives.  It  is  proposed  that  Member  States,  when  using  the  proposed 
framework, benefit from the possibility of a Union financing up to 100% and a pre-financing 
of  30%  of  the  amounts  programmed  under  the  dedicated  priority  for  this  new  specific 
objective. 

Energy transition  

Another area where cohesion policy investments contribute to EU priorities is climate action 
and  climate  transition,  where  the  policy  invests  more  than  EUR  110  billion.  In  light  of  the 
significant investment needs of the climate transition, Member States need to maintain their 
efforts to respect the funds’ climate ambition. 

In order to enhance energy security and accelerate the transition across the Union and also to 
promote  clean  mobility,  a  new  specific  objective  should  be  created  to  promote  energy 
interconnectors  and  related  transmission  infrastructure,  and  the  deployment  of  recharging 
infrastructure from ERDF and Cohesion Fund resources.  

In  order  to  accelerate  the  energy  transition  of  industry,  notably  in  energy-intensive  sectors, 
that is necessary for reaching the EU climate objectives and for the EU’s competitiveness and 
resilience,  the  Commission  proposes  to  enlarge  the  scope  of  support  from  the  ERDF  to 
decarbonisation of projects selected in the context of Union instruments in particular projects 
in  installations  that  have  been  awarded  a  ‘Sovereignty  Seal’  under  the  Innovation  Fund 
established by the EU Emissions Trading System (ETS), and to reduce administrative checks 
for similar support under the JTF. 

To  increase  climate  resilience  is  essential  to  ensure  competitiveness.  In  line  with  the 
Preparedness  Union  Strategy  and  the  concept  of  preparedness  and  security  by  design,  it  is 
vital to ensure sustainable and informed investments, based on proper climate modelling data, 
so as to protect both vulnerable populations and the EU economy and competitiveness.  

Eastern border regions 

Given  the  challenges  of  the  eastern  border  regions  since  the  Russian  aggression  against 
Ukraine,  programmes  under  the  Investment  for  jobs  and  growth  goal  with  NUTS  2  regions 
that  have  borders  with  Russia,  Belarus  or  Ukraine,  should  benefit  from  the  possibility  of  a 
one-off 9.5% pre-financing of the programme allocation and a 100% Union financing. 

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Greater flexibility and simplification for accelerating investments 

Halfway  through the 2021-2027 programming  period, the level  of payments  claimed by  the 
Member States to the Commission is low, owing to a combination of factors: the late adoption 
of the regulations governing the policy; the need to face successive crises from the COVID-19 
pandemic  to  the  war  against  Ukraine,  and  to  the  energy  crisis;  the  pressure  to  close  the 
previous programming period; and the priority given to implement the instruments of NGEU, 
given  their  shorter  implementation  timeframe.  All  this  has  in  turn  put  a  strain  on  the 
administrative  capacities  of  Member  States’  authorities  to  design  and  quickly  deliver 
investments.  Notwithstanding  a  rapid  acceleration  experienced  over  last  year  with  project 
selection close to 40% of the allocations, cohesion policy implementation should rapidly pick 
up  pace  in  a  context  where  the  Union  is  facing  a  range  of  new  challenges  requiring  rapid 
responses. The Commission therefore proposes a set of measures aiming at further enhancing 
the  flexibility  and  simplification  of  the  use  of  cohesion  policy  support  for  accelerating 
investments: 

– 

– 

– 

To  avoid  that  programme  implementation  is  delayed  because  of  national  budgetary 
constraints,  and  to  expand  the  financial  capacity  of  Member  States  to  address  the 
newly emerging challenges, the Commission proposes to provide a one-off 4.5% pre-
financing  provided  from  the  ERDF  and  the  Cohesion  Fund  in  2026  to  all 
programmes that  reallocate at least  15% of their resources for the new priorities in 
the  context  of  the  mid-term  review  process.  The  pre-financing  percentage  is 
proposed to be increased to 9.5% in 2026 for programmes under the Investment for 
jobs  and  growth  goal  covering  one  or  more  NUTS2  regions  bordering  Russia, 
Belarus or Ukraine. To avoid that the risk of delays and corresponding loss of funds 
reduces  willingness  to  undertake  programme  amendments  and  to  ensure  the  proper 
implementation of the operations concerned, the Commission proposes to extend the 
time limit for using the ERDF and the Cohesion Fund resources and extend the end 
date  for  eligibility  by  an  additional  year.  This  flexibility  is  proposed  to  be  made 
available only for programmes that proposed amendments resulting in reallocation of 
at least 15% of the resources for the new priorities set out in the present proposal and 
in the context of the mid-term review exercise, once approved. 

Costs  related  to  preparatory  actions  for  reforms  will  be  eligible  including  for  self-
standing reforms (i.e. not accompanied by investments). 

To further enhance synergies among EU policies and instruments, it is proposed that 
the  JTF  is  also  covered  by  the  Seal  of  Excellence  (including  the  Sovereignty  Seal) 
mechanism and the possibility for a simplified selection procedure under Regulation 
(EU)  2021/1060  thus  providing  support  to  projects  selected  under  other  EU 
instruments, which do not have sufficient funding. In light of the high demand for the 
Innovation  Fund  and  its  track  record  in  supporting  projects  that  are  sufficiently 
mature and have a significant potential to reduce greenhouse gas emissions, and that 
either  demonstrate  highly  innovative  technologies,  processes  or  products,  or  are 
aimed  at  scaling  up  innovative  technologies,  processes  or  products  to  achieve  their 
broad  commercial  roll-out  across  the  EU,  the  Commission  also  proposes  to  align 
with the possibilities for projects supported under the Innovation Fund and include a 
corresponding targeted provision allowing for the production, processing, transport, 
distribution,  storage  or  combustion  of  fossil  fuels  provided  these  projects  were 
attributed a Sovereignty Seal under the Innovation Fund. 

– 

Recognising  the  important  role  of  cities  in  delivering  EU  objectives,  in  addressing 
local  challenges  and  in  strengthening  the  urban-rural  links  to  drive  a  balanced 

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regional  development,  the  Commission  proposes  to  reinforce  the  European  Urban 
Initiative  (EUI)  by  introducing  the  possibility  of  reallocating  resources  from  the 
ERDF  to  the  EUI.  Such  amounts  would  support  actions  for  the  benefit  of  Member 
States initiating the reallocation. The Commission also proposes to establish a Seal of 
Excellence for the EUI, thus enabling support under cohesion policy programmes for 
EUI projects that have been selected but could not receive funding due to insufficient 
resources.  Member  States  would  also  have  the  possibility  to  reallocate  ERDF 
resources from  their programmes under the  Investment  for  jobs and  growth goal  to 
the  Interregional  Innovation  Investment  Instrument  thus  having  more  flexibility  in 
the use of resources. These reallocations are taking place within the same fund, the 
ERDF, and therefore it is proposed not to count them towards the ceilings set out in 
Article 26 of Regulation (EU) 2021/1060. 

With  the  objective  of  easing  the  successful  and  effective  implementation  of  the  JTF,  the 
Commission  proposes  to  remove  the  current  restrictions  applicable  to  the  modification  of 
indicator  targets  in  the  Just  Transition  Plans  after  their  amendment  following  the  mid-term 
review. These restrictions can be removed only if they do not affect the transition to climate 
neutrality and fossil fuel phase out commitments. 

• 

Consistency with existing policy provisions in the policy area 

The proposal  is  consistent  with  the objectives followed by the cohesion  policy funds and is 
limited  to  a  targeted  amendment  of  Regulation  (EU)  2021/1058  and  Regulation  (EU) 
2021/1056. 

• 

Consistency with other Union policies 

The  proposal  is  limited  to  a  targeted  amendment  of  Regulation  (EU)  2021/1058  and 
Regulation (EU) 2021/1056 and maintains consistency with other Union policies. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The proposal is based on Articles, 175, 177,178 and 322 of the Treaty on the Functioning of 
the European Union. 

• 

Subsidiarity (for non-exclusive competence)  

To encourage Member States to better align their cohesion policy programmes with emerging 
EU  priorities  while  ensuring  greater  flexibility  and  simplification  to  accelerate  investments, 
amendments  to  Regulation  (EU)  2021/1058  and  Regulation  (EU)  2021/1056  are  proposed. 
The same result cannot be achieved through actions at national level. 

• 

Proportionality 

The  proposal  aims  at  incentivising  Member  States  to  further  align  their  cohesion  policy 
programmes  towards  the  emerging  EU  priorities  and  providing  greater  flexibility  and 
simplification for accelerating investments. The measures do not go beyond what is necessary 
to achieve these goals. 

• 

Choice of the instrument 

A  Regulation  is  the  appropriate  instrument  as  it  provides  directly  applicable  rules  for  the 
support. 

EN 

8 

  EN 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

Stakeholder consultations 

Collection and use of expertise 

3. 

• 

N/A 

• 

N/A 

• 

N/A 

• 

Impact assessment 

An  impact  assessment  has  been  carried  out  to  prepare  the  proposal  for  Regulation  (EU) 
2021/1058 and Regulation (EU) 2021/1056. The limited and targeted changes do not require a 
separate impact assessment. 

Regulatory fitness and simplification 

Fundamental rights 

• 

N/A 

• 

N/A 

4. 

BUDGETARY IMPLICATIONS 

The  proposal  concerns  cohesion  policy  programmes  under  the  2021-2027  period  and  will 
result  in  additional  pre-financing  to  be  paid  under  the  ERDF  in  2026.  This  additional  pre-
financing  will  lead  to  frontloading  of  payment  appropriations  to  2026  compared  to  a  no 
policy-change  scenario  and  is  budgetary  neutral  over  the  2021-2027  period.  Based  on  the 
estimated uptake of the proposal, the total additional pre-financing to be paid in 2026 amounts 
to  EUR  16.1  billion.  At  the  same  time,  taking  into  account  payment  forecasts  and 
implementation shifts, the net budgetary impact is estimated at EUR 3.6 billion, which will be 
included in the draft budget 2026. The possibility to apply for an increased Union financing 
rate for investments in defence, housing, water resilience, certain energy infrastructure and for 
programmes  covering  eastern  border  regions  will  also  lead  to  a  partial  front-loading  of 
payments, followed by lower payments at a later stage as the overall envelope is unchanged. 
The actual budgetary impact of the increased co-financing rate on an annual basis will depend 
on the Member States’ uptake and the pace of submission of payment applications.  

The proposed modification does not require changes in the Multiannual Financial Framework 
annual  ceilings  for  commitments  and  payments  as  per  Annex  I  to  Council  Regulation  (EU, 
Euratom) 2020/2093.  

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The implementation of the measure will be monitored and reported upon in the framework of 
the general reporting mechanisms established in Regulation (EU) 2021/1060.   

EN 

9 

  EN 

Explanatory documents (for directives) 

• 

N/A 

• 

Detailed explanation of the specific provisions of the proposal 

The proposal involves the amendment of Regulations (EU) 2021/1058 and (EU) 2021/1056 as 
regards the ERDF, the Cohesion Fund and the JTF: 

Specific objectives 

Competitiveness and decarbonisation 

•  The  20%  limitation  set  on  reprogramming  resources  to  the  STEP  specific  objectives  is 

removed.   

•  Support  from  the  ERDF  and  the  Cohesion  Fund  to  enterprises  other  than  SMEs  is  made 
possible, to the extent they comply with State aid rules as set out in Articles 107 and 108 of 
the Treaty, for investments that participate in an Important Project of Common European 
Interest approved by the Commission pursuant to Article 107(3), point (b), of the Treaty on 
the Functioning of the European Union (TFEU), and to Communication C(2021) 8481, or 
where  the  enterprises  facilitate  industrial  adjustment  linked  to  the  decarbonisation  of 
production processes and products. In addition, the possibility to support large enterprises 
is  extended  to  all  regions  in  the  context  of  the  STEP  specific  objectives  under  policy 
objectives 1 and 2, to the extent this is allowed under State aid rules; 

•  The  possibility  for  Member  States  to  transfer  resources  from  the  ERDF  or  the  Cohesion 
Fund to  the Member State compartment  of the  InvestEU Fund for the deployment  in  the 
new  InvestEU  financial  instrument,  as  included  in  the  proposal  for  amendment  of  the 
InvestEU Regulation (COM(2025) 84); 

•  For  Important  Projects  of  Common  European  Interest  that  have  been  approved  by  the 
Commission pursuant to Article 107(3), point (b), of the Treaty of the Functioning of the 
European  Union  (TFEU)  and  to  Communication  C(2021) 8481,  the  selection  process  is 
simplified as the managing authorities are able, in line with State aid rules, to directly grant 
support from  the ERDF  for projects  directly participating in  such  an  approved  Important 
Project of Common European Interest.  

•  Ensuring that investments with cohesion funding increase climate resilience, as it is also an 

essential part of ensuring competitiveness. 

Defence and security  

•  A new specific objective is  introduced under policy objective 1  for the ERDF and under 
policy objective 3 for the ERDF and the Cohesion Fund in support of investments in the 
EU’s  defence  capability  and  the  scope  of  support  is  amended  to  allow  for  support  to 
enterprises other than SMEs for these specific objectives, to the extent allowed under State 
aid rules. The specific objective under policy objective 3 will promote resilient defence or 
dual  use  infrastructure  to  foster  military  mobility  in  the  Union.  Furthermore,  the 
Commission  will  pay,  in  addition  to  the  yearly  pre-financing  for  the  programmes,  30% 
exceptional  one-off  pre-financing  based  on  the  resources  allocated  to  these  specific 
objectives in dedicated priorities and the maximum co-financing rate for these priorities is 
set at 100%. 

EN 

10 

  EN 

Affordable housing (including social housing) 

•  To  promote  investments  in  affordable  housing,  including  social  housing  and  support  to 
related reforms, three new specific objectives are introduced for the ERDF and one for the 
Cohesion Fund. For these specific objectives, the Commission will pay, in addition to the 
yearly pre-financing for the programmes, 30% exceptional one-off pre-financing based on 
the  resources  allocated  to  dedicated  priorities  and  the  maximum  co-financing  rate  for 
dedicated  priorities  supporting  these  objectives  is  100%.  At  the  same  time,  it  must  be 
ensured that housing is climate resilient. 

•  Furthermore, the scope of the Just Transition Fund is amended to allow for investments in 
affordable  housing  and  support  for  relevant  reforms  also  to  take  place  in  support  of  the 
implementation of the territorial just transition plans. 

Secure access to water, sustainable water management and water resilience 

•  The  amendment  of  the  specific  objective  into  ‘promoting  secure  access  to  water, 
sustainable  water  management  and  water  resilience’  reflects  the  strategic  importance  for 
the  EU  of  resilient  water  management.  To  help  accelerate  investments  in  this  area,  the 
Commission  will  pay,  in  addition  to  the  yearly  pre-financing  for  the  programmes,  30% 
exceptional  one-off  pre-financing  based  on  the  resources  allocated  to  dedicated  priorities 
supporting  the  specific  objective  and  the  maximum  co-financing  rate  for  dedicated 
priorities supporting these objectives is 100%. 

Energy transition  

•  In order to enhance energy security and accelerate the transition across the Union and also 
to  promote clean mobility,  a new specific objective should be created to  promote energy 
interconnectors and  related transmission infrastructure, and  the deployment  of recharging 
infrastructure from ERDF and Cohesion Fund resources.  

Eastern border regions 

•  Given the challenges of the eastern border regions since Russia’s war of aggression against 
Ukraine,  programmes  under  the  Investment  for  jobs  and  growth  goal  -  financed  by  the 
ERDF or the Cohesion Fund with NUTS 2 regions that have borders with Russia, Belarus 
or  Ukraine  -  should  benefit  from  the  possibility  of  a  one-off  9.5%  pre-financing  and  a 
100%  Union  financing,  if  programmes  reallocate  at  least  15%  of  their  resources  for  the 
newly  introduced  specific  objectives  and  STEP.  Where  the  corresponding  programme 
covers  the  entire  territory  of  the  Member  State,  these  financial  flexibilities  should  only 
apply  if  the  programme  covering  the  entire  territory  of  the  Member  State  is  the  only 
programme in the Member State that includes the concerned NUTS 2 regions. 

Cities  

•  The  European  Urban  Initiative  is  strengthened  by  allowing  the  attribution  of  a  Seal  of 
Excellence for innovative actions that were assessed and comply with the minimum quality 
requirements  but  could  not  be  financed  due  to  budgetary  constraints  and  by  allowing 
Member  States  to  allocate  part  of  their  initial  national  allocation  of  the  ERDF  to  the 
European Urban Initiative. This reallocation would not count towards the ceilings set out in 
Article 26 of Regulation (EU) 2021/1060. 

Further flexibilities on implementation 

Thematic concentration 

EN 

11 

  EN 

•  The  ERDF  thematic  concentration  requirements  are  revised  to  accommodate  the 
introduction  of  the  new  and  amended  specific  objectives  and  the  specific  objectives  that 
were  introduced  as  part  of  the  STEP  Regulation.  However,  the  requirements  set  out  in 
Article  6  of  Regulation  (EU)  2021/1060  in  relation  to  climate-related  investments  will 
continue to apply.  

Mid-term review 

• 

In  order  that  Member  States  could  effectively  make  use  of  the  new  priorities  and 
flexibilities,  it  is  proposed  they  be  allowed  to  re-submit  their  mid-term  review 
proposal by 2 months after the entry into force of these regulatory amendments.  

•  To  help  accelerate  the  implementation  of  the  ERDF  and  the  Cohesion  Fund,  all 
programmes  that  reallocate  at  least  15%  of  their  resources  for  the  newly  introduced 
specific  objectives  and  STEP  would  receive  a  one-off  pre-financing  of  4.5%  on  the 
basis of their amended programme budget (with the exception of NUTS 2 regions that 
have  borders  with  Russia,  Belarus  or  Ukraine,  that  benefit  of  the  higher  one-off 
prefinancing  of  9.5%).  The  additional  pre-financing  related  to  the  above  set  new 
priority areas would come in addition. 

• 

• 

In  addition,  the  end-date  for  eligibility  of  expenditure  is  extended  by  one  additional 
year  for  ERDF  and  Cohesion  Fund  programmes  for  which  at  least  15%  of  the 
envelope is refocused towards the new priority areas. 

In order to provide flexibility regarding the calculation of climate contribution, where 
the climate contribution as referred to in Article 6(1)  of Regulation (EU) 2021/1060 is 
exceeded for either the Cohesion Fund or the ERDF, the amount exceeding the target 
could  be  taken  into  account  when  calculating  the  climate  contribution  for  the  other 
fund.  

Further amendments aimed at streamlining the implementation include: 

•  The  possibility  for  Member  States  to  reallocate  resources  from  the  ERDF  to  the 

Interregional Innovation Investments Instrument; 

•  The possibility to support activities that contribute to the implementation of reforms; 

•  The  duly  justified  revision  of  output  indicator  targets  as  part  of  a  JTF  programme 
amendment while ensuring  that  such revisions do not  affect  the transition  to  climate 
neutrality and fossil fuel phase out commitments. 

EN 

12 

  EN 

2025/0084 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulations (EU) 2021/1058 and (EU) 2021/1056 as regards specific measures 
to address strategic challenges in the context of the mid-term review 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 175, 177, 178 and 322 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Economic and Social Committee2,  
Having regard to the opinion of the Committee of the Regions3, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

In  recent  years,  geopolitical  dynamics  have  been  marked  by  profound  uncertainty, 
necessitating  a  fundamental  re-evaluation  of  the  Union’s  strategic  autonomy, 
resilience  and security  alongside the challenges stemming from the green, social and 
technological transitions. Those simultaneous transformations demonstrate the urgent 
need  to  close  the  innovation  gap,  accelerate  decarbonisation  efforts  to  reinforce 
economic  competitiveness  and  reduce  external  dependencies  by  diversifying  supply 
chains,  scaling-up  domestically  produced  green  energy,  and  investing  in  critical 
sectors. 

As  the  Union’s  main  investment  instrument  within  the  Multiannual  Financial 
Framework, cohesion policy plays a crucial role in supporting those priorities. It drives 
targeted investments that contribute to economic, social and territorial cohesion while 
at the same time addressing emerging challenges.  

The legal framework for cohesion policy programmes provides for a mid-term review 
in  2025,  which  offers  a  timely  and  unique  opportunity  to  refocus  programmes  on 
addressing  new  challenges  and  opportunities,  to  accelerate  implementation  and  to 
increase their effectiveness to respond to both old and new Union priorities.  

The Commission presented in the Competitiveness Compass, the Clean Industrial Deal 
and  the  Affordable  Energy  Action  Plan  a  concrete  path  for  Europe  to  regain  its 
competitiveness and secure sustainable prosperity. The ERDF and the Cohesion Fund 
already  support  investments  to  climate  objectives  as  stipulated  in  Regulation  (EU) 
2021/1060.  However,  Member  States  should  step  up  their  efforts  in  order  to  ensure  
that decarbonisation is a driver for growth for European industries and the prosperity 

2 
3 

OJ C , , p. . 
OJ C , , p. . 

EN 

13 

  EN 

 
(5) 

(6) 

(7) 

of Europeans by, amongst others, scaling up support to clean-tech and the transition to 
clean energy, investing in energy infrastructure projects that can ensure a true Energy 
Union as well as supporting decarbonisation of production processes and products. 

In  light  of  the  unprecedented  geopolitical  instability  and  the  need  for  the  Union  to 
guarantee  its  own  defence,  cohesion  policy  funding  should  be  swiftly  mobilised  to 
directly support investments in defence capabilities. It is therefore necessary to create 
new  specific  objectives  for  support  from  the  European  Regional  Development  Fund 
(ERDF)  and  the  Cohesion  Fund  established  by  Regulation  (EU)  2021/1058  of  the 
European Parliament and of the Council4 to finance industrial capacities in the defence 
sector and to allow for investments in resilient defence or dual-use infrastructure with 
a view to fostering military mobility, in line with the scope of those funds. Industrial 
capacities to foster defence capabilities should relate to the technological development 
and  production  of  defence  products  and  other  products  for  defence  purposes,  as 
defined  in  Article  2  of  [draft]  Council  Regulation  [xxxx]  establishing  the  Security 
Action  for  Europe  (SAFE)  through  the  reinforcement  of  European  defence  industry 
Instrument,  in  particular  those  referred  to  in  Article  1  of  that  Regulation.  Member 
States are encouraged to use the possibility foreseen in the current legal framework of 
voluntarily transferring resources allocated to them in shared management to directly 
managed programmes with defence and security objectives. In this context, transfers to 
the  Connecting  Europe  Facility  (CEF)  military  mobility  envelope  would  ensure 
coordinated  interventions  along  the  military  mobility  corridors  highlighted  in  the 
White Paper on Defence. 

Furthermore,  in  order  to  quickly  inject  liquidity  to  cover  the  most  pressing  needs 
notably  for  investments  in  enhanced  defence  capabilities,  additional  financing 
possibilities should be offered. In particular, it is necessary to provide for an additional 
one-off  pre-financing  of  30%  of  the  amounts  programmed  under  dedicated  priorities 
for defence under the respective policy objectives of the ERDF and the Cohesion Fund 
and the possibility to apply a Union co-financing rate of up to 100%.  

to  strengthen  Europe’s 

The  ERDF  and  the  Cohesion  Fund  may,  within  their  respective  scopes,  already 
support  investments  contributing  to  the  objectives  of  the  ‘Strategic  Technologies  for 
Europe  Platform’  (STEP),  which  aims 
technological 
leadership.  In  order  to  further  incentivise  investments  from  the  ERDF  and  the 
Cohesion Fund in those critical fields, the limitation for the overall contribution of the 
ERDF and the Cohesion Fund to those priorities should be removed and the possibility 
for  Member  States  to  receive  a  higher  pre-financing  for  related  programme 
amendments  should  be  extended.  Furthermore,  the  possibilities  for  the  financing  of 
productive  investments  contributing  to  STEP  objectives  in  enterprises  other  than 
SMEs  should  be  extended  to  all  regions.  Similarly,  such  investments  should  also  be 
possible  in  regions  where  they  facilitate  industrial  adjustment  linked  to  digital 
transformation,  including  digital  capacities  in  cloud,  AI  and  supercomputing,  or  the 
decarbonisation  and  circularity  of  production  processes  and  products,  such  as  in  the 
automotive  industry  or  the  energy  intensive  industries.  In  addition,  the  possibility 
provided  for  investments  contributing  to  STEP  objectives  to  finance  productive 
investments  in  enterprises  other  than  SMEs  from  the  Just  Transition  Fund  (JTF) 
established  by  Regulation  (EU)  2021/1056  of  the  European  Parliament  and  of  the 

4 

OJ L 231, 30.6.2021, p. 60. 

EN 

14 

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(8) 

(9) 

Council5 without the need and irrespective of the outcome of a gap analysis should be 
extended to all investments.  

In  order  to  enhance  energy  security,  accelerate  the  energy  transition  and  clean 
mobility, the investments under STEP and the Alternative Fuels Infrastructure Facility 
should  be  complemented  by  creating  a  new  specific  objective  for  the  ERDF  and  the 
Cohesion Fund under policy objective 2 to promote energy interconnectors and related 
transmission infrastructure, and the deployment of charging infrastructure. In order to 
accelerate  investments  in  these  fields,  priorities  dedicated  to  this  specific  objective 
should  benefit  from  an  additional  one-off  pre-financing  of  30%  of  the  amounts 
programmed  under  those  priorities  and  from  the  possibility  to  apply  a  Union  co-
financing rate of up to 100%. Managing authorities should aim to leverage a maximum 
amount of private finance, where relevant. This enhanced investment effort will enable 
energy-intensive  sectors  to  access  more  stable  and  diverse  energy  sources  in  a  less 
fragmented 
and 
competitiveness.  Moreover,  expanding  the  ERDF’s  support  for  decarbonisation 
projects  allows  energy-intensive  industries  to  prioritise  high-impact  innovations 
aligned with EU climate objectives. 

energy  market,  buttressing 

sustainability 

internal 

their 

Important  Projects  of  Common  European  Interest  (IPCEI)  result  from  a  State  aid 
instrument  requiring  cross-European  cooperation  for  innovative  technologies  or  pan-
European  infrastructures.  IPCEI  are  projects  that  support  and  promote  large-scale, 
cross-border  projects  that  are  considered  essential  for  the  economic  growth, 
innovation,  and  competitiveness  of  the  Union.  To  help  accelerate  the  design  of  new 
IPCEI  and  the  implementation  of  the  existing  ones,  support  from  the  ERDF  for 
investments  in  projects  participating  in  an  IPCEI  as  approved  by  the  Commission 
pursuant to Article 107(3), point (b), of the Treaty on the Functioning of the European 
Union  (TFEU)  and  to  Communication  C(2021) 8481  should  be  allowed  in  all 
categories of regions. Furthermore,  operations contributing  to  an  IPCEI approved by 
the Commission should benefit from simplified selection procedures. 

(10)  Affordable  housing  is  another  challenge  that  has  come  to  the  forefront  due  to  the 
significant  increase  in  prices  and  rents  in  recent  years.  With  a  view  to  incentivising 
Member States  and regions to  double investments  from  the ERDF  and the Cohesion 
Fund,  within  their  respective  scopes,  in  the  construction  and  renovation  of  the 
affordable housing stock, including social housing, new specific objectives should be 
created under different policy objectives to provide flexibility for the programming of 
housing  interventions  under  dedicated  priorities.  Such  priorities  should  entail  the 
possibility  to  apply  a  Union  co-financing  rate  of  up  to  100%  and  benefit  from  an 
additional  one-off  pre-financing  of  30%  of  the  amounts  programmed  in  order  to 
alleviate  the  burden  on  public  budgets.  For  example,  investments  under  the  ‘New 
European  Bauhaus’  initiative  should  make  full  use  of  those  new  possibilities.  Costs 
resulting from the temporary renting of alternative accommodation for the occupants 
during the time of the renovation may also be entitled to support under such priorities, 
as  well  as  costs  of  reforms  related  to  housing,  such  as  preparatory  work  for 
improvements in housing market regulation and permitting at local and city level. It is 
also appropriate to clarify the support of the JTF in that context. 

(11)  Water  has  a  vital  role  as  a  resource  for  the  security  of  food,  energy  and  economic 
systems. This is also a key aspect of ensuring climate resilience. Given the challenges 

5 

OJ L 231, 30.6.2021, p. 1. 

EN 

15 

  EN 

 
posed  by  the  impact  of  climate  change  on  water  resources,  further  investments  in 
water resilience should be encouraged.  It is urgent to enhance the implementation of 
the  water  and  marine  protection  legislation  and  improve  water  efficiency, address 
water scarcity, and progress towards a water resilient Europe.  This requires important 
investments. It is therefore appropriate to include a reference to secure access to water, 
sustainable water management and water resilience in the new specific objective under 
policy  objective  2  to  allow  for  proactive,  risk-based  management  and  increased 
preparedness.  Dedicated  priorities  established  for  that  specific  objective  should  also 
benefit from an additional one-off pre-financing of 30% of the amounts programmed 
and the possibility of a co-financing rate of up to 100% in order to incentivise crucial 
investments in that field. 

(12)  Finally, in order to enhance the effectiveness of investments,  it is important to allow 
for  the  payment  of  costs  related  to  the  implementation  of  reforms,  also  where  such 
costs are not directly linked to the implementation of investments. 

(13) 

In  order  to  enable  Member  States  to  carry  out  a  meaningful  reprogramming  in  the 
context  of  the  mid-term  review  and  focus  resources  on  those  new  strategic  Union 
priorities,  additional  restrictions  should  be  lifted.  As  regards  thematic  concentration 
requirements, it is appropriate to allow Member States to count amounts programmed 
for new strategic priorities, including those contributing to STEP objectives, towards 
the amounts required to ensure compliance with thematic concentration requirements. 
This  should  be  accompanied  with  some  flexibility  regarding  the  calculation  of  the 
respective  climate  contribution  for  the  ERDF  and  the  Cohesion  Fund  as  set  out  in 
Article 6 of Regulation (EU) 2021/1060, while respecting the overall requirements of 
that Article. In addition, to accelerate the decarbonisation of industry that is necessary 
for  reaching  the  Union’s  climate  objectives,  it  is  necessary  to  provide  for  the 
possibility  to  finance,  through  the  ERDF,  investments  aimed  at  achieving  the 
reduction  of  greenhouse  gas  emissions  also  from  activities  listed  in  Annex  I  to 
Directive  2003/87/EC  of  the  European  Parliament  and  of  the  Council6  provided  that 
they  have  been  awarded  a  Seal  Excellence.  Similarly,  as  regards  the  JTF,  the 
conditions for financing such investments should be simplified. Furthermore, in order 
to  ensure  consistency  of  support  between  financing  granted  under  direct  and  shared 
management,  operations  that  have  already  been  assessed  in  the  context  of  directly 
managed  programmes  and  been  attributed  a  ‘Sovereignty  Seal’  as  defined  in  Article 
4(1) of Regulation (EU) 2024/795 in a call for proposals under Commission Delegated 
Regulation (EU) 2019/856 by the Commission should not be subject to the fossil fuel 
exclusion. Member States should also be given the possibility to contribute resources 
from  the  ERDF  and  the  Cohesion  Fund  to  the  Member  State  compartment  of  the 
InvestEU Fund7 to deploy them through the InvestEU financial instrument set out in 
[Article  10a  of  Regulation  (EU)  2021/523].  Finally,  in  order  to  allow  for  a 
comprehensive  reprogramming  towards  the  new  strategic  priorities  in  the  context  of 
the  mid-term  review,  Member  States  should  benefit  from  additional  time  to 
complement the assessment of the outcome of the mid-term review and the submission 

6 

7 

Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a 
system  for  greenhouse  gas  emission  allowance  trading  within  the  Union  and  amending  Council 
Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32, ELI: http://data.europa.eu/eli/dir/2003/87/oj). 
Regulation  (EU)  2021/523  of  the  European  Parliament  and  of  the  Council  of  24  March  2021 
establishing the InvestEU Programme and amending Regulation (EU) 2015/1017 (OJ L 107, 26.3.2021, 
p. 30, ELI: http://data.europa.eu/eli/reg/2021/523/oj). 

EN 

16 

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(14) 

of  related  programme  amendments.  This  should  also  apply  to  JTF  resources  where 
they are included in a programme together with ERDF or Cohesion Fund resources.   

In  order  to  accelerate  the  implementation  of  cohesion  policy  programmes  more 
generally and inject the necessary liquidity for key investments to be implemented, an 
additional one-off pre-financing for the ERDF and the Cohesion Fund should be paid 
for  programmes  under  both  the  Investment  for  jobs  and  growth  goal  and  under 
European territorial  cooperation goal (Interreg),  when the reprogramming  concerns a 
substantial  share  of  the  overall  programme.  The  pre-financing  percentage  should  be 
further  increased  for  certain  programmes  under  the  Investment  for  jobs  and  growth 
goal  covering  one  or  more  NUTS2  regions  bordering  Russia,  Belarus  or  Ukraine, 
given  the  adverse  impact  on  those  regions  of  the  Russian  war  of  aggression  against 
Ukraine.  In  order  to  incentivise  the  re-programming  towards  key  priorities  in  the 
context of the mid-term review, the additional pre-financing should only be available 
where a certain threshold for the reallocation of financial resources to specific crucial 
priorities is reached in that context.  

(15)  Furthermore, to take account of the time needed to refocus investments in the context 
of the mid-term review and allow best use of available resources, the deadlines for the 
eligibility  of  expenditure  as  well  as  decommitment  rules  should  be  adjusted  for 
programmes  carrying  out  a  reallocation  of  resources  to  strategic  priorities  in  the 
context  of  the  mid-term  review  exercise.  It  should  also  be  possible  to  apply  a 
maximum  co-financing  rate  of  up  to  100%  to  priorities  in  programmes  under  the 
Investment for jobs and growth goal covering one or more NUTS2 regions bordering 
Russia, Belarus or Ukraine, given the adverse impact on those regions of the Russian 
war of aggression against Ukraine.  

(16)  The  mid-term  review  should  also  be  used  to  reinforce  the  crucial  role  of  cities  in 
delivering  many  Union  objectives  by  giving  Member  States  the  possibility  to 
reallocate  financial  resources  from  the  ERDF  to  reinforce  the  European  Urban 
Initiative referred to in Article 12 of Regulation (EU) 2021/1058. In addition, in order 
to facilitate the uptake of key innovative actions identified under the European Urban 
Initiative,  such  actions  should  benefit  from  a  simplified  selection  procedure  for 
support  under  cohesion  policy  programmes.  Member  States  should  also  be  provided 
with  the  possibility  to  reallocate  ERDF  resources  from  their  programmes  under  the 
Investment  for  jobs  and  growth  goal  to  the  Interregional  Innovation  Investment 
Instrument  referred  to  in  Article  13  of  Regulation  (EU)  2021/1058  to  enhance 
flexibility in the use of resources. 

(17) 

In  order  to  simplify  delivery  and  accelerate  investments,  it  is  appropriate  to  make 
additional targeted changes to the regulatory framework governing the use of the JTF. 
In  particular,  the  possibility  for  a  simplified  selection  procedure  for  operations  that 
have been attributed a Seal of Excellence should be extended to the JTF. Furthermore, 
the limitations for the revision of targets should be removed in order to provide for the 
necessary flexibility in the context of changing implementation circumstances. 

(18)  Since  the  objective  of  this  Regulation,  namely  to  refocus  investments  on  critical 
priorities in the context of the mid-term review and to simplify and accelerate policy 
delivery  by  amending  Regulations  (EU)  2021/1058  and  (EU)  2021/1056  cannot  be 
sufficiently achieved by the Member States but can rather be better achieved at Union 
level, the Union may adopt measures, in accordance with the principle of subsidiarity 
as  set  out  in  Article  5  of  the  Treaty  on  European  Union.  In  accordance  with  the 

EN 

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principle  of  proportionality  as  set  out  in  that  Article,  this  Regulation  does  not  go 
beyond what is necessary in order to achieve that objective.  

(19)  Regulations  (EU)  2021/1058  and  (EU)  2021/1056  should  therefore  be  amended 

accordingly. 

(20)  Given the urgent need to enable crucial investments notably in defence capabilities in 
the context of pressing geopolitical challenges, this Regulation should enter into force 
on  the  day  following  that  of  its  publication  in  the  Official  Journal  of  the  European 
Union, 

HAVE ADOPTED THIS REGULATION: 

Article 1 

Regulation (EU) 2021/1058 is amended as follows: 

(1) 

Article 3 is amended as follows: 

(a) 

paragraph 1 is amended as follows: 

(i) in point (a), the following point (vii) is added: 

‘(vii)  enhancing  industrial  capacities  to  foster  dual  use  as  well  as  defence  
capabilities.’; 

(ii) in point (b), point (v) is replaced by the following: 

‘(v)  promoting  secure  access  to  water,  sustainable  water  management  and 
water resilience;’;  

(iii) the following points (xi) and (xii) are added:  

‘(xi) promoting access to affordable  housing, and related reforms; 

(xii) promoting energy interconnectors and related transmission infrastructure, 
and the deployment of recharging infrastructure.’; 

(iv) in point (c), the following point (iii) is added:  

‘(iii)  developing  resilient  defence  or  dual  use  infrastructure  to  foster  military 
mobility in the Union.’; 

(v) in point (d), the following point (vii) is added: 

‘(vii) promoting access to affordable  housing, and related reforms.’; 

(vi) in point (e), first subparagraph, the following point (iii) is added: 

‘(iii) fostering integrated territorial  development,  through access  to  affordable  
housing, and the development of related reforms in all types of territories.’;  

(vii) The following subparagraph is added in paragraph 1: 

‘Operations supported under the specific objective set out in point (c)(iii) shall 
primarlily  focus,  where  relevant,  on  one  or  more  of  the  four  EU  Priority 
Military  Mobility  Corridors  identified  by  Member  States  in  Annex  II  to  the 
Military  Requirements  for  Military  Mobility  within  and  beyond  the  EU  as 
adopted  by  the  Council  on  [18  March  2025  and  with  reference  ST  6728/25 
ADD1]. Operations supported which are part of those Corridors shall comply 
with the infrastructure requirements laid down in implementing acts based on 
Article 12(2) of Regulation (EU) 2021/1153.’;   

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18 

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(b) 

in  paragraph  1a,  the  first  and  second  subparagraphs  are  replaced  by  the 
following: 

‘The  resources  under  the  specific  objective  referred  to  in  paragraph  1,  points 
(a)(vi)  and 
(b)(ix),  shall  be  programmed  under  dedicated  priorities 
corresponding to the respective policy objective. 

The Commission shall pay 30% of the allocation to those priorities as set out in 
the decision approving the programme amendment as exceptional one-off pre-
financing  in  addition  to  the  yearly  pre-financing  for  the  programme  provided 
for in Article 90(1) and (2) of Regulation (EU) 2021/1060 or in Article 51(2), 
(3) and (4) of Regulation (EU) 2021/1059 of the European Parliament and of 
the  Council*.  That  exceptional  pre-financing  shall  be  paid  provided  that  the 
programme amendment is submitted to the Commission by 31 December 2025. 
It  shall  be  paid  within  60  days  of  the  adoption  of  the  Commission  decision 
approving the programme amendment. 

_______ 

* Regulation (EU) 2021/1059 of the European Parliament and of the Council of 
24  June  2021  on  specific  provisions  for  the  European  territorial  cooperation 
goal  (Interreg)  supported  by  the  European  Regional  Development  Fund  and 
external 
(OJ  L  231,  30.6.2021,  p.  94,  ELI: 
http://data.europa.eu/eli/reg/2021/1059/oj).’; 

instruments 

financing 

(c) 

the following paragraph 1c is inserted:  

‘1c.  The  resources  under  the  specific  objectives  referred  to  in  paragraph  1, 
points  (a)(vii),  (b)(v),  (b)(xi),  (b)(xii),  (c)(iii),  (d)(vii)  and  (e)(iii),  shall  be 
programmed under dedicated priorities corresponding  to  the respective policy 
objective.  

The Commission shall pay 30% of the allocation to those priorities as set out in 
the decision approving the programme amendment as exceptional one-off pre-
financing  in  addition  to  the  yearly  pre-financing  for  the  programme  provided 
for  in  Article  90(1)  and  (2)  of  Regulation  (EU)  2021/1060.  That  exceptional 
pre-financing  shall  be  paid  provided  that  the  programme  amendment  is 
submitted to the Commission by 31 December 2025. It shall be paid within 60 
days  of  the  adoption  of  the  Commission  decision  approving  the  programme 
amendment. 

In  accordance  with  Article  90(5)  of  Regulation  (EU)  2021/1060,  the  amount 
paid  as  exceptional  pre-financing  shall  be  cleared  from  the  Commission 
accounts no later than with the final accounting year. 

In  accordance  with  Article  90(6)  of  Regulation  (EU)  2021/1060,  any  interest 
generated  by  the  exceptional  pre-financing  shall  be  used  for  the  programme 
concerned in the same way as the ERDF and shall be included in the accounts 
for the final accounting year. 

In  accordance  with  Article  97(1)  of  Regulation  (EU)  2021/1060,  the 
exceptional pre-financing shall not be suspended. 

In  accordance  with  Article  105(1)  of  Regulation  (EU)  2021/1060,  the  pre-
financing to be taken into account for the purposes of calculating amounts to be 
de-committed shall include the exceptional pre-financing paid. 

EN 

19 

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By  way  of  derogation  from  Article  112  of  Regulation  (EU)  2021/1060,  the 
maximum  co-financing  rate  for  dedicated  priorities  established  to  support  the 
specific objectives referred to in paragraph 1, points (a)(vii), (b)(v), (b)(xi), (b) 
(xii), (c)(iii), (d)(vii) and (e)(iii), of this Article shall be 100%.’; 

(d)  paragraph 3 is replaced by the following: 

‘(3)  The  Cohesion  Fund  shall  support  PO  2  and  3,  including  the  specific 
objectives set out in paragraph 1, points (b)(x), (b)(xi), (b)(xii) and (c)(iii), of 
this Article, insofar as such support is in line with the scope of support as set 
out in Articles 6 and 7.’; 

(e) 

in paragraph 4, first subparagraph, the following point (d) is added: 

‘(d) contribute to the implementation of reforms.’. 

(2) 

In Article 4, paragraph 10 is replaced by the following:  

‘10.  The  thematic  concentration  requirements  set  out  in  paragraph  6  of  this  Article 
shall  be  complied  with  throughout  the  entire  programming  period,  including  when 
ERDF  allocations  are  transferred  between  priorities  of  a  programme  or  between 
programmes and at the mid-term review in accordance with Article 18 of Regulation 
(EU)  2021/1060.  Where  a  Member  State  submits  a  request  for  an  amendment  of  a 
programme  in  accordance  with  Article  24  of  Regulation  (EU)  2021/1060,  amounts 
programmed for the specific objectives referred to in paragraph 1, points (a)(vi) and 
(b)(ix), of this Article, as well as for the specific objectives referred to in paragraph 
1, points (a)(vii), (b)(v), (b)(xi), (b)(xii), (c)(iii), (d)(vii) and (e)(iii), of this Article, 
may  be  counted  towards  either  the  amounts  required  for  PO 1  or  PO 2  or  divided 
between the two.’.  

(3) 

Article 5 is amended as follows: 

(a) 

paragraph 2 is amended as follows:  

(i) 

(1) 

the first subparagraph is amended as follows: 

point (e) is replaced by the following: 

‘(e)  when  they  contribute  to  the  specific  objectives  under  PO  1  set  out  in 
Article  3(1),  points  (a)(vi)  and  (a)(vii),  of  this  Regulation,  or  to  the  specific 
objective under PO 2 set out in Article 3(1), point (b)(ix), of this Regulation;’; 

(2) 

the following point (f) is added:  

‘(f)    when  they  contribute  to  an  Important  Project  of  Common  European 
Interest  as approved by the Commission pursuant to  Article 107(3), point  (b), 
of  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU)  and  to 
Communication C(2021) 8481, while preserving a focus on SMEs;’; 

(3) 

the following point (g) is added: 

‘(g) where they facilitate industrial adjustment linked to the decarbonisation of 
production processes and products.’; 

(ii) 

the second subparagraph is deleted; 

(b) 

the following paragraphs 10 and 11 are added:  

‘10.  In  addition  to  the  possibilities  set  out  in  Article  14  of  Regulation  (EU) 
2021/1060,  Member  States  may,  with  the  agreement  of  the  managing  authorities 
concerned, allocate resources from the ERDF and the Cohesion Fund to the Member 

EN 

20 

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State  compartment  of  the  InvestEU  Fund  to  deploy  them  through  the  InvestEU 
financial instrument to be set out in [Article 10a of Regulation (EU) 2021/523 of the 
European Parliament and of the Council]*. Such contributions shall be subject to the 
procedures set out in Article 14 of Regulation (EU) 2021/1060 and count towards the 
ceilings set out in that Article. Resources generated by or attributable to the amounts 
contributed  to  the  InvestEU  financial  instrument  in  accordance  with  Article  14  of 
Regulation  (EU)  2021/1060  shall  be  made  available  to  the  Member  State  in 
accordance with the contribution agreement and shall be used for support under the 
same  objective  or  objectives  in  the  form  of  financial  instruments  or  budgetary 
guarantees. 

11.  In  addition  to  the  possibilities  set  out  in  Article  73(4)  of  Regulation  (EU) 
2021/1060,  for  projects  directly  participating  in  an  Important  Project  of  Common 
European Interest approved by the Commission pursuant to Article 107(3), point (b) 
TFEU and to Communication C(2021) 8481, the managing authority may decide to 
grant  support  from  the  ERDF  directly,  provided  that  such  operations  meet  the 
requirements set out in Article 73, paragraph 2, points (a), (b) and (g), of Regulation 
(EU) 2021/1060.  

______ 

*  Regulation  (EU)  2021/523  of  the  European  Parliament  and  of  the  Council  of  24 
March  2021  establishing  the  InvestEU  Programme  and  amending  Regulation  (EU) 
2015/1017 
ELI: 
http://data.europa.eu/eli/reg/2021/523/oj).’. 

26.3.2021, 

107, 

(OJ 

30, 

p. 

L 

(4) 

In Article 7, paragraph 1 is amended as follows: 

(a) 

point (b) is amended as follows: 

‘(b)  investment  to  achieve  the  reduction  of  greenhouse  gas  emissions  from 
activities listed in Annex I to Directive 2003/87/EC, except those which have 
been  awarded  a  Seal  of  Excellence  as  defined  in  Article  2,  point  (45),  of 
Regulation (EU) 2021/1060;’; 

(b) 

in point (h), the following point (iv) is added: 

‘(iv) investment in operations attributed a Sovereignty Seal under Article 4(1) 
of  Regulation  (EU)  2024/795  in  a  call  for  proposals  under  Commission 
Delegated Regulation (EU) 2019/856.’. 

(5) 

The following Article 7a is inserted: 

‘Article 7a 
Specific provisions linked to the mid-term review and related flexibilities 

1. The Commission shall pay in 2026 4.5% of the total support from the ERDF and 
the Cohesion Fund as set out in the decision approving the programme amendment as 
additional  one-off  pre-financing.  This  one-off  pre-financing  percentage  shall  be 
increased  to  9.5%  for  programmes  under  the  Investment  for  jobs  and  growth  goal 
covering  one  or  more  NUTS2  regions  bordering  Russia,  Belarus  or  Ukraine, 
provided  the  programme  does  not  cover  the  entire  territory  of  the  Member  State. 
Where in a Member State NUTS 2 regions bordering Russia, Belarus or Ukraine are 
included  exclusively  in  programmes  covering  the  entire  territory  of  that  Member 
State,  the  increased  pre-financing  set  out  in  this  paragraph  shall  apply  to  those 
programmes. 

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21 

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The  additional  pre-financing  referred  to  in  the  first  subparagraph  of  this  paragraph 
shall only apply where reallocations of at least 15% of the financial resources of the 
programme to one or more dedicated priorities established for the specific objectives 
referred  to  in  Article  3(1),  points  (a)(vi),  (a)(vii),  (b)(v),  (b)(ix),  (b)(xi),  (b)(xii), 
(c)(iii), (d)(vii) and (e)(iii), of this Regulation in the context of the mid-term review 
have  been  approved,  provided  that  the  programme  amendment  is  submitted  by  31 
December 2025. 

The  pre-financing  due  to  the  Member  State  which  results  from  programme 
amendments  pursuant  to  reallocation  to  the  priorities  referred  to  in  the  second 
subparagraph  shall  be  counted  as  payments  made  in  2025  for  the  purposes  of 
calculating  the  amounts  to  be  decommitted  in  accordance  with  Article  105  of 
Regulation  (EU)  2021/1060,  provided  the  request  for  programme  amendment  was 
submitted in 2025. 

2. By way of derogation from  Article 63(2) and  Article 105(2) of Regulation (EU) 
2021/1060, the deadline for the eligibility of expenditure, the reimbursement of costs 
as well as for decommitment shall be 31 December 2030. That derogation shall only 
apply  where  programme  amendments  reallocating  at  least  15%  of  the  financial 
resources  of  the  programme  to  one  or  more  dedicated  priorities  established  for  the 
specific  objectives  referred  to  in  Article  3(1),  points  (a)(vi),  (a)(vii),  (b)(v),  (b)(ix), 
(b)(xi), (b)(xii),  (c)(iii),  (d)(vii) and  (e)(iii), of this Regulation in  the context of the 
mid-term review have been approved. 

3.  Member  States  may  in  requests  for  programme  amendments  in  accordance  with 
Article 24 of Regulation (EU) 2021/1060 request the reallocation of ERDF resources 
programmed under the Investment for  jobs and growth goal to the European Urban 
Initiative and to the Interregional Innovation Investments  Instruments  referred to in 
Article 12 and Article 13 of this Regulation respectively. Reallocated resources shall 
be  implemented  for  the  benefit  of  the  Member  State  concerned.  Such  reallocations 
shall  not  constitute  transfers  within  the  meaning  of  Article  26  of  Regulation  (EU) 
2021/1060.  

4.  By  way  of  derogation  from  Article  112  of  Regulation  (EU)  2021/1060,  the 
maximum  co-financing  rate  for  priorities  in  programmes  under  the  Investment  for 
jobs  and  growth  goal  covering  one  or  more  NUTS2  regions  bordering  Russia, 
Belarus  or  Ukraine  shall  be  100%.  The  higher  co-financing  rate  shall  not  apply  to 
programmes  covering  the  entire  territory  of  the  Member  State  concerned,  unless 
those  regions  are  included  only  in  programmes  covering  the  entire  territory  of  that 
Member State. The derogation shall only apply where reallocations of at least 15% of 
the  financial  resources  of  the  programme  to  one  or  more  dedicated  priorities 
established  for  the  specific  objectives  referred  to  in  Article  3(1),  points  (a)(vi), 
(a)(vii), (b)(v), (b)(ix), (b)(xi), (b)(xii), (c)(iii), (d)(vii) and (e)(iii), of this Regulation 
in  the  context  of  the  mid-term  review  have  been  approved,  provided  that  the 
programme amendment is submitted by 31 December 2025. 

5. In addition to the assessment for each programme on the outcome of the mid-term 
review  to  be  submitted  in  accordance  with  Article  18(2)  of  Regulation  (EU) 
2021/1060,  Member  States  may  resubmit  a  complementary    assessment  as  well  as 
related  requests  for  programme  amendments,  taking  into  account  the  specific 
objectives introduced by Regulation (EU) XXXX/XXXX [this Regulation], within 2 
months of the entry into force of Regulation (EU) XXXX/XXXX [this Regulation]. 
The deadlines set out in Article 18(3) of Regulation (EU) 2021/1060 shall apply. 

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22 

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6. Where the  climate contribution  as  referred to  in  Article 6(1) of Regulation (EU) 
2021/1060  of  the  Cohesion  Fund  would  exceed  the  target  of  37%  of  its  total 
allocation,  the  amount  exceeding  that  target  may  be  taken  into  account  when 
calculating  the  climate  contribution  of  the  ERDF  for  the  purpose  of  reaching  the 
target  of  30%  of  its  total  allocation.  The  amounts  exceeding  the  ERDF  climate 
contribution  target  of  30%  of  its  total  allocation  may  be  taken  into  account  when 
calculating the climate contribution of the Cohesion Fund.’.  

(6) 

In Article 12, the following paragraph 4 is added: 

‘4.  Innovative  actions  which  have  been  assessed  in  a  call  for  proposals  under  the 
European  Urban  Initiative  and  comply  with  the  minimum  quality  requirements  of 
that  call  and  cannot  be  financed  under  that  call  for  proposals  due  to  budgetary 
constraints may be attributed a Seal of Excellence by the Commission. 

For  the  purpose  of  the  Seal  of  Excellence,  the  European  Urban  Initiative  is 
considered  another  Union  source  distinct  from  the  programmes  implemented  and 
prepared in accordance with Article 7 of Regulation (EU) 2021/1060.’.  

(7) 

In Annex I, Table 1 is amended as follows: 

(a) 

in policy objective 1, the following row is added: 

Any RCR 
listed for 
specific 
objectives (i), 
(iii)’  

Any RCO listed for 
specific objectives 
(i), (iii) 
RCO128  Enterprises 
linked 
supported 
foster 
primarily 
dual  use  and  defence 
capabilities 
(RearmEU) -  
 entreprises 

to 

‘(vii) 
enhancing 
industrial  capacities  to 
foster  dual  use  as  well 
as defence capabilities 

- 

(b) 

in  policy  objective  2,  the  row  for  specific  objective  (v)  is  replaced  by  the 
following: 

‘(v) Promoting secure 
access to water, 
sustainable water 
management and 
water resilience  

RCO30  Length 
of new or 
upgraded pipes 
for the 
distribution 
systems of public 
water supply - km 
RCO31  Length 
of new or 
upgraded pipes 
for the public 
network for 
collection of 

RCR41   
Population 
connected to 
improved public 
water supply - 
persons 
RCR42   
Population 
connected to at 
least secondary 
public waste water 
treatment - persons 
RCR43   Water 

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23 

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waste water - km 
RCO32  New or 
upgraded capacity 
for waste water 
treatment - 
population 
equivalent 

losses in 
distribution 
systems for public 
water supply - 
cubic metres per 
year’ 

(c) 

in policy objective 2, the following rows are  added: 

‘(xi) promoting access 
to affordable  housing, 
and related reforms 

RCO18  
Affordable 
dwellings with 
improved energy 
performance – 
dwellings 
RCO65  Capacity 
of new or 
modernised 
affordable and 
social housing - 
persons 
RCO130 
Affordable and 
social housing 
related reforms - 
number 

RCR26   Annual 
primary energy 
consumption (of 
which: affordable 
dwellings, public 
buildings, 
enterprises, other) - 
MWh/year 
RCR29   Estimated 
greenhouse 
emissions - tonnes 
CO2 eq./year  
RCR67   Annual 
users of new or 
modernised 
affordable and 
social housing - 
users/year 

(xii) promoting energy 
interconnectors and 
related transmission 
infrastructure, and the 
deployment of 
recharging 
infrastructure 

RCO 59 - 
Alternative fuels 
infrastructure 
(refuelling/ 
recharging points) 

RCO 131 Energy 
transmission 
network lines and 
interconnectors - 
newly constructed 
or improved’ 

(d) 

in policy objective 3, the following row is added: 

‘(iii) developing 
resilient defence or 
dual use infrastructure 
to foster military 
mobility for the Union 

Any RCO listed 
for specific 
objectives (i), (ii)  
RCO129 
Infrastructure 

Any RCR listed 
for specific 
objectives (i), (ii)’ 

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adapted to 
military mobility 
requirements,  

(e) 

in policy objective 4, the following row is added: 

‘(vii) promoting access 
to affordable housing, 
and related reforms 

RCO18  
Dwellings with 
improved energy 
performance – 
dwellings 
RCO65  Capacity 
of new or 
modernised 
social, affordable  
housing - persons 
RCO130 
Affordable and 
social housing 
related reforms - 
number 

RCR26   Annual 
primary energy 
consumption (of 
which: dwellings, 
public buildings, 
enterprises, other) 
- MWh/year 
RCR29   Estimated 
greenhouse 
emissions - tonnes 
CO2 eq./year  
RCR67   Annual 
users of new or 
modernised 
affordable and 
social housing - 
users/year’ 

(f) 

in policy objective 5, the following row is added: 

(iii) fostering 
integrated territorial 
development, through 
access to affordable 
housing, and the 
development of related 
reforms in all types of 
territories 

RCO18  
Dwellings with 
improved energy 
performance – 
dwellings 
RCO65  Capacity 
of new or 
modernised 
affordable, and 
social housing - 
persons 
RCO130 
Affordable and 
social ousing 
related reforms - 
number 

RCR26   Annual 
primary energy 
consumption (of 
which: dwellings, 
public buildings, 
enterprises, other) 
- MWh/year 
RCR29   Estimated 
greenhouse 
emissions - tonnes 
CO2 eq./year  
RCR67   Annual 
users of new or 
modernised 
affordable and 
social housing - 
users/year’ 

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Regulation (EU) 2021/1056 is amended as follows: 

(1) 

Article 8(2) is amended as follows: 

Article 2 

(a) 

in the first subparagraph, the following point (p) is added: 

‘(p) promoting access to affordable housing, and related reforms.’; 

(b) 

the fourth subparagraph is replaced by the following: 

‘The  JTF  may  also  support  productive  investments  in  enterprises  other  than 
SMEs,  while  preserving  a  focus  on  SMEs,  irrespective  of  whether  the  gap 
analysis  was  carried  out  in  accordance  with  Article  11(2),  point  (h),  of  this 
Regulation  and  irrespective  of  its  outcome.  Such  investments  shall  only  be 
eligible where they do not lead to relocation as defined in Article 2, point (27), 
of Regulation (EU) 2021/1060. The provision of such support shall not require 
a  revision  of  the  territorial  just  transition  plan  where  that  revision  would  be 
exclusively linked to the gap analysis. Apprenticeships and jobs, education or 
training for new skills shall be considered in the selection process.’; 

(c) 

the following subparagraph is added: 

‘For  operations  attributed  a  Seal  of  Excellence  as  defined  in  Article  2,  point 
(45),  of Regulation  (EU) 2021/1060 and  for projects  directly participating in 
an  Important  Project  of  Common  European  Interest  approved  by  the 
Commission pursuant to Article 107(3), point (b) TFEU and to Communication 
C(2021) 848, the managing authority may decide to grant support from the JTF 
directly, provided that such operations contribute to the specific objective as set 
out in Article 2 of this Regulation and contribute to the implementation of the 
territorial just transition plans.’. 

(2) 

In Article 9, point (d) is replaced by the following: 

‘(d) investment related to the production, processing, transport, distribution, storage 
or  combustion  of  fossil  fuels,  with  the  exception  of  investment  in  operations 
attributed  a  Sovereignty  Seal  under  Article  4(1)  of  Regulation  (EU)  2024/795  in  a 
call for proposals under Commission Delegated Regulation (EU) 2019/856.’. 

(3) 

In Article 10, the following paragraph is added: 

‘4.  Where  JTF  resources  are  programmed  as  priorities  within  a  programme  also 
containing ERDF or Cohesion Fund resources, in addition to the assessment for each 
programme  on  the  outcome  of  the  mid-term  review  to  be  submitted  in  accordance 
with  Article  18(2)  of  Regulation  (EU)  2021/1060,  Member  States  may  resubmit  a 
complementary  assessment as well as related requests for programme amendments, 
taking  into  account  the  specific  objectives  introduced  by  Regulation  (EU) 
XXXX/XXXX  [this  Regulation],  within  2  months  of  the  entry  into  force  of  
Regulation (EU) XXXX/XXXX [this Regulation]. The deadlines set out in Article 18 
(3) of Regulation (EU) 2021/1060 shall apply. 

Where  such  programme  benefits  from  an  extended  deadline  for  the  eligibility  of 
expenditure, the reimbursement of costs as well as for decommitment in accordance 
with Article 7a of Regulation (EU) 2021/1058, such extension shall also apply to the 
JTF resources.’. 

(4) 

In Article 11(2), point (i) is replaced by the following: 

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‘(i)  where  support  is  to  be  provided  to  investments  to  achieve  the  reduction  of 
greenhouse gas emissions from activities listed in Annex I to Directive 2003/87/EC, 
a  list  of  operations  to  be  supported  and  a  justification  that  they  contribute  to  a 
transition  to  a  climate-neutral  economy  and  lead  to  a  reduction  in  greenhouse  gas 
emissions going below the relevant benchmarks established for free allocation under 
Directive  2003/87/EC  and  provided  that  those  operations  are  necessary  for  the 
protection of a significant number of jobs;’.  

(5) 

In Article 12(2), the third sentence is deleted. 

Article 3 

This  Regulation  shall  enter  into  force  on  the  [day]  following  that  of  its  publication  in  the 
Official Journal of the European Union. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Strasbourg, 

For the European Parliament 
The President 

For the Council 
The President 

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LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT 

1. 

1.1. 

1.2. 

1.3. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE ................................................. 3 

Title of the proposal/initiative ...................................................................................... 3 

Policy area(s) concerned .............................................................................................. 3 

Objective(s) .................................................................................................................. 3 

1.3.1.  General objective(s) ..................................................................................................... 3 

1.3.2.  Specific objective(s) ..................................................................................................... 3 

1.3.3.  Expected result(s) and impact ...................................................................................... 3 

1.3.4. 

Indicators of performance ............................................................................................ 3 

1.4. 

1.5. 

The proposal/initiative relates to: ................................................................................. 4 

Grounds for the proposal/initiative .............................................................................. 4 

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative ............................................................ 4 

1.5.2.  Added value of EU involvement (it may result from different factors, e.g. 

coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this section 'added value of EU involvement' is the value resulting 
from EU action, that is additional to the value that would have been otherwise 
created by Member States alone. ................................................................................. 4 

1.5.3.  Lessons learned from similar experiences in the past .................................................. 4 

1.5.4.  Compatibility with the multiannual financial framework and possible synergies with 
other appropriate instruments ....................................................................................... 5 

1.5.5.  Assessment of the different available financing options, including scope for 

redeployment ................................................................................................................ 5 

1.6. 

1.7. 

2. 

2.1. 

2.2. 

2.2.1. 

2.2.2. 

Duration of the proposal/initiative and of its financial impact .................................... 6 

Method(s) of budget implementation planned ............................................................. 6 

MANAGEMENT MEASURES................................................................................... 8 

Monitoring and reporting rules .................................................................................... 8 

Management and control system(s) ............................................................................. 8 

Justification of the budget implementation method(s), the funding implementation 
mechanism(s), the payment modalities and the control strategy proposed .................. 8 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them............................................................................................................ 8 

2.2.3.  Estimation and justification of the cost-effectiveness of the controls (ratio between 

the control costs  and the value of the related funds managed), and assessment of the 
expected levels of risk of error (at payment & at closure) ........................................... 8 

2.3. 

3. 

3.1. 

Measures to prevent fraud and irregularities ................................................................ 9 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE ............ 10 

Heading(s) of the multiannual financial framework and expenditure budget line(s) 
affected ....................................................................................................................... 10 

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3.2. 

Estimated financial impact of the proposal on appropriations ................................... 12 

3.2.1.  Summary of estimated impact on operational appropriations.................................... 12 

3.2.1.1.  Appropriations from voted budget ............................................................................. 12 

3.2.1.2.  Appropriations from external assigned revenues ....................................................... 17 

3.2.2.  Estimated output funded from operational appropriations......................................... 22 

3.2.3.  Summary of estimated impact on administrative appropriations ............................... 24 

3.2.3.1. Appropriations from voted budget .............................................................................. 24 

3.2.3.2.  Appropriations from external assigned revenues ....................................................... 24 

3.2.3.3.  Total appropriations ................................................................................................... 24 

3.2.4.  Estimated requirements of human resources.............................................................. 25 

3.2.4.1.  Financed from voted budget....................................................................................... 25 

3.2.4.2.  Financed from external assigned revenues ................................................................ 26 

3.2.4.3.  Total requirements of human resources ..................................................................... 26 

3.2.5.  Overview of estimated impact on digital technology-related investments ................ 28 

3.2.6.  Compatibility with the current multiannual financial framework.............................. 28 

3.2.7.  Third-party contributions ........................................................................................... 28 

3.3. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

Estimated impact on revenue ..................................................................................... 29 

DIGITAL DIMENSIONS .......................................................................................... 29 

Requirements of digital relevance .............................................................................. 30 

Data ............................................................................................................................ 30 

Digital solutions ......................................................................................................... 31 

Interoperability assessment ........................................................................................ 31 

Measures to support digital implementation .............................................................. 32 

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1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative 

REGULATION  OF  THE  EUROPEAN  PARLIAMENT  AND  OF  THE  COUNCIL 
amending Regulation 2021/1056 and Regulation 2021/1058 […] 

1.2. 

Policy area(s) concerned  

Cohesion  policy:  European  Regional  Development  Fund  (ERDF),  Cohesion  Fund 
and Just Transition Fund (JTF) 

1.3. 

Objective(s) 

1.3.1.  General objective(s) 

The  cohesion  policy  funds  and  the  JTF  provide  financing  in  support  of  the 
harmonious development of the EU, through actions that lead to the strengthening of 
its economic, social and territorial cohesion.  

In support of this overarching objective, the Funds also contribute to advancing key 
policy  objectives,  including  strengthening  the  overall  competitiveness  and  the 
strategic autonomy of the EU, and addressing challenges and opportunities that are 
associated with the green, digital and social transitions. 

1.3.2. 

Specific objective(s) 

Specific objective No 1 

Accelerate  the  implementation  of  2021-2027  cohesion  policy  programmes  by 
enhancing the flexibility and provide areas of simplification for the use of cohesion 
policy funds.  

Specific objective No 2  

Provide  support  from  cohesion  policy  funds  under  the  2021-2027  programmes  to 
defence related investments as a short-term reaction to recent geopolitical events by 
providing  additional  possibilities  for  Member  States  to  increase  investment  in  the 
defence  sector  and  for  enhancing  production  capacities  and  resilient  dual-use 
infrastructure.  

Emphasise the importance of addressing the housing crisis by creating incentives in 
the 2021-2027 regulatory framework for the investment in affordable housing.  

Emphasise  the  strategic  importance  of  secure  access  to  water  and  sustainable  and 
resilient  water  management  by  creating  incentives  in  the  2021-2027  regulatory 
framework for investment in relevant projects.  

Address specific territorial challenges of the Regions bordering Ukraine, Russia and 
Belarus. 

1.3.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

Specific objective No 1  

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3 

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Maximising the use of the resources allocated to the ERDF and Cohesion Fund under 
the  2021-2027  MFF,  and  the  resources  allocated  to  the  Just  Transition  Fund  under 
the 2021-2027 MFF and NGEU for the policy objectives set out in the regulations.  

Specific objective No 2  

Increased production capacity of enterprises in the defence sector and the adaptation 
of critical mobility infrastructure to emerging defence challenges of critical mobility 
infrastructure.  

Increased  support  to  address  the  specific  challenges  of  regions  bordering  Russia, 
Belarus and Ukraine. 

An uptake in investments supporting the EU’s competitiveness. 

An uptake in investments in building and renovation projects in affordable housing.  

An  uptake  in  investments  in  projects  that  increase  the  EU’s  water  resilience  and 
improve the sustainable water management.  

1.3.4. 

Indicators of performance 

Specify the indicators for monitoring progress and achievements. 

Specific objective No 1  

Financial  data  on  the  amounts  related  to  operations  selected  and  implemented  by 
Member States and on disbursements made from the EU budget to Member States.  

Specific objective No 2  

Common Output Indicator 128 – Number of enterprises supported linked primarily to 
foster defence capabilities (RearmEU) - number of enterprises  

Common Output Indicator 129 - Road and rail bridges built or upgraded for dual use 
number  

Common  Output  Indicator  65  -  Capacity  of  new  or  modernised  social  housing  – 
number of persons  

Common Result Indicator 43 - Water losses in distribution systems for public water 
supply - cubic metres per year  

1.4. 

The proposal/initiative relates to:  

 a new action  
 a new action following a pilot project / preparatory action8  

 the extension of an existing action  

 a merger or redirection of one or more actions towards another/a new action 

8 

As referred to in Article 58(2), point (a) or (b) of the Financial Regulation. 

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1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative 

Recent  economic  and  geopolitical  events  have  brought  to  the  front  important 
priorities  that  require  substantial  investments.  Cohesion  policy  provides  a  strong 
framework  for  such  investments,  and  the  specific  investments  within  the  scope  of 
this  amendment  are  already  possible  to  a  large  extent  under  the  current  legal 
framework governing the Funds. Therefore, they are already in line with the overall 
objective  of  strengthening  economic,  social  and  territorial  cohesion.  However,  the 
pace and volume of investments need to be increase. The ongoing mid-term review 
of  the  2021-2027  cohesion  policy  programmes  provides  a  crucial  opportunity  to 
assess  how  these  programmes  can  help  deliver  on  the  policy  objectives.  Therefore, 
the current amendment creates incentives and flexibilities to allow Member States to 
put  a  greater  focus  with  resources  from  the  MFF  on  these  priorities  within  a 
relatively short time frame. 

1.5.2.  Added  value  of  EU  involvement  (it  may  result  from  different  factors,  e.g. 
coordination gains, legal certainty, greater effectiveness or complementarities). For 
the  purposes  of  this  section  'added  value  of  EU  involvement'  is  the  value  resulting 
from  EU  action,  that  is  additional  to  the  value  that  would  have  been  otherwise 
created by Member States alone. 

Overall:  

The  amendment  is  designed  to  allow  Member  States  to  direct  necessary  cohesion 
policy funding to investments in policy areas that have been identified as priorities, 
and  to  maintain  and  strenghten  the  economic,  social  and  territorial  cohesion  of  the 
EU.   

Specific objective 1:  

Cohesion  policy  funding  is  vital  for  economic  stability,  fairness,  and  integration  in 
the EU. It plays a primary role in reducing regional disparities and ensuring balanced 
development across all Member States. It ensures that all regions have the resources 
to  grow,  innovate,  and  adapt  to  future  challenges  while  promoting  EU-wide 
solidarity.  Maintaining  and  accelerateing  the  flow  of  funds  to  the  Member  States 
from the EU budget is essential for ensuring the necessery level of public funding in 
Member States and to achieve the cohesion objectives enshrined in the Treaty.  

Specific objective 2  

Defence:  The  Versailles  Declaration  of  March  2022,  as  well  as  communications 
JOIN(2022) 24 and COM(2022) 60 already outlined the need for the EU to step up 
its  own  preparedness,  capability  and  resilience  to  better  protect  its  citizens.  The 
rapidly evolving geopolitical context of the past months has emphasised the need to 
step up the efforts. The European Council conclusions of 6 March 2025 stress “that 
Europe  must  become  more  sovereign,  more  responsible  for  its  own  defence  and 
better equipped to act and deal autonomously with immediate and future challenges 
and  threats  with  a  360°  approach”.  To  that  end,  the  EU  will  accelerate  the 
mobilisation  of  the  necessary  instruments  and  financing.  The  European  Council 
“calls  on  the  Commission  to  propose  additional  funding  sources  for  defence  at  EU 
level,  including  by  means  of  additional  possibilities  and  incentives  offered  to  all 
Member States, on the basis of the principles of objectivity, non-discrimination and 

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5 

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equal  treatment  of  Member  States,  in  the  use  of  their  current  allocations  under  the 
relevant EU funding programmes, and to swiftly present relevant proposals”.  

Competitiveness:  Strengthening  the  competitiveness  and  resilience  in  strategic 
sectors and reducing  the dependencies of the European economy  through the green 
and digital transformations has been the EU compass over the last years. The STEP 
Regulation  has  already  introduced  increased  possibilities  for  supporting  strategic 
technologies and critical sectors, through the use of the cohesion  policy funds. The 
proposal gives further impetus to use the scale of the EU to invest in areas important 
for the EU’s future competitiveness. 

Affordable housing:  The recent  cost-of-living  crisis has exacerbated a longstanding 
problem with housing affordability in the EU. The general trend can be observed in 
all  Member  States  and  the  political  guidelines  acknowledge  that  this  is  putting  a 
strain on cohesion. To that end, a taskforce has been set up within the Commission 
and  the  European  Parliament  has  set  up  a  special  Committee  on  Housing.  In 
anticipation  of,  and  in  line  with  the  general  objective  of  the  European  Affordable 
Housing Plan, the mid-term review of the cohesion policy programmes provides an 
opportunity to emphasise the importance of water resilience and to create incentives 
that would allow Member States to direct parts of their cohesion policy allocations to 
measures that support affordable housing.  

Energy  interconnectors  and  related  transmission  infrastructure,  and  recharging 
infrastructure: Enhancing energy security and integration, reducing reliance on fossil 
fuels  and  bolstering  energy  independence  is  crucial  for  the  EU  to  support  a 
sustainable  and  resilient  energy  system.  Cohesion  policy  already  invests  in  the 
developement  of  smart  energy  systems  and  in  the  deployment  of  charging 
infrastructure supporting electric mobility. 

To accelerate investment efforts in this area and achieve greater cross-border energy 
integration, it is however important to provide specific incentives for the promotion 
of energy interconnectors and related transmission infrastructure, and the deployment 
of charging infrastructure supporting electric mobility.  

Access  to  water  and  water  management:  Despite  the  EU’s  comprehensive  legal 
framework 
to  protect  and  sustainably  manage  water  resources,  structural 
mismanagement of water has resulted in the continued degradation and pollution of 
this resource and water-related ecosystems, including coastal and marine ones. Over 
the  last  5  years,  floods,  prolonged  droughts  and  water  scarcity  have  affected  more 
and more areas  of the EU and this is  exacerbated by climate change, pollution and 
biodiversity  loss.  The  transboundary  nature  of  water  challenges,  their  cross-cutting 
nature  and  their  relevance  to  delivering  EU  policies  and  legislation  in  various 
domains  provide  a  clear  basis  for  a  European  strategy  on  water  resilience.  In 
anticipation of the strategy, the mid-term review of the cohesion policy programmes 
provides  an  opportunity  to  direct  the  necessary  financing  to  projects  that  tackle 
security of access, sustainable water management and water resilience. 

1.5.3.  Lessons learned from similar experiences in the past 

Recent amendments to the 2014-2020 and 2021-2027 Regulations in the context of 
the COVID-19 crisis, the military aggression of Russia in Ukraine, the energy crisis, 
and competitiveness (STEP) have resulted in an important uptake of funds to support 
relevant investments. 

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1.5.4.  Compatibility with the multiannual financial framework and possible synergies with 

other appropriate instruments 

The  amendment  does  not  alter  the  existing  cohesion  policy  allocations  and  is 
intended  to  help  accelerate  investments  of  the  Funds  in  an  efficient  and  effective 
manner. 

1.5.5.  Assessment  of  the  different  available  financing  options,  including  scope  for 

redeployment 

The  amendment  does  not  alter  the  core  structure  of  the  existing  cohesion  policy 
regulatory  framework,  nor  does  it  alter  the  fixed  Member  State  allocations.  It  is 
intended  to  emphasise  and  incentivise  support  measures  that  are  already  possible 
within  the  scope  of  the  funds  and  that  are  complementary  to  investments  through 
other financing options either at EU level or at Member State level.  

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1.6. 

Duration of the proposal/initiative and of its financial impact 

☑ limited duration  

–  ☑  financial impact from 2026 to 2029 for payment appropriations. No impact on 

commitments appropriations.   

1.7.  Method(s) of budget implementation planned9  

☑ Shared management with the Member States  

2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

The monitoring and reporting rules laid down in Regulation (EU) 2021/1060 remain 
fully applicable:  

Programme monitoring committee: minimum once a year  

Annual performance review between the Member State and the Commission  

Data transmission per programme: five times per year  

Annual control (audit) report. 

A  final  performance  report  for  each  programme  needs  to  be  submitted  by 
15 February 2031. 

2.2.  Management and control system(s)  

2.2.1. 

Justification  of  the  budget  implementation  method(s),  the  funding  implementation 
mechanism(s), the payment modalities and the control strategy proposed 

The proposal for amendment does not alter the existing shared management budget 
implementation  method,  nor  does  it  change  the  implementation  mechanisms,  the 
payment modalities or the control strategies defined in Regulation (EU) 2021/1060. 

2.2.2. 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them 

No  specific  risks  have  been  identified.  The  proposal  for  amendment  does  not 
structurally  alter  the  risk-management  and  control  setup  of  the  cohesion  policy 
programmes, which is considered appropriate for the envisaged investments. 

2.2.3.  Estimation  and  justification  of  the  cost-effectiveness  of  the  controls  (ratio  between 
the control costs  and the value of the related funds managed), and assessment of the 
expected levels of risk of error (at payment & at closure)  

The control framework of cohesion policy remains unchanged and fully applicable. 
This has been designed to protect the financial interests of the EU and adjusted over 
multiple programming periods to take into account the recommendations of ECA and 
OLAF. 

9 

Details of budget implementation methods and references to the Financial Regulation may be found on 
the BUDGpedia site: https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-
implementation/Pages/implementation-methods.aspx. 

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2.3.  Measures to prevent fraud and irregularities  

Member States need to comply with the existing cohesion policy control framework, 
and  need  to  have  in  place  a  management  and  control  system  that  allows  for  the 
prevention, detection and correction and reporting on irregularities, including fraud. 

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3. 

3.1. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

•  Existing budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of 
expenditure 

Contribution  

Heading of 
multiannual 
financial 
framework 

Number  

Diff./Non-
diff.10 

from 
EFTA 
countries
11 

from 
candidate 
countries 
and 
potential 
candidates
12 

From 
other 
third 
countries 

other assigned 
revenue 

05 02 01 ERDF – Operational expenditure 

H2a 

H2a 

05 03 01 CF – Operational expenditure 

Diff. 

Diff. 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

10 
11 
12 

Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations. 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidates from the Western Balkans. 

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3.2. 

Estimated financial impact of the proposal on appropriations  

3.2.1. 

Summary of estimated impact on operational appropriations  

–    The proposal/initiative does not require the use of operational appropriations  

–  ☑ The proposal/initiative requires the use of operational appropriations, as explained below 

3.2.1.1.  Appropriations from voted budget 

Heading of multiannual financial framework  

Number  H2a 

EUR million (to three decimal places) 

DG: REGIO. 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

Operational appropriations  

05.0201 ERDF Operational expenditure 

 05.0301 CF Operational expenditure 

Commitments 

Payments 

Commitments 

Payments 

(1a) 

(2a) 

(1b) 

(2b) 

0.000  

0.000  

[3 060.000]  

[-3 060.000]  

0.000  

0.000  

[540.000]  

[-540.000]  

Appropriations of an administrative nature financed from the envelope of specific programmes13 
Budget line 

(3) 

TOTAL appropriations 
for DG REGIO 

Commitments 

Payments 

=1a+1b+3 

=2a+2b+3 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

[3 600.000] 

[-3 600.000] 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

TOTAL 

operational 

appropriations  

Commitments 

(4) 

0.000 

0.000 

0.000 

0.000 

0.000 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

13 

Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research. 

EN 

11 

EN 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
Payments 

TOTAL  appropriations  of  an  administrative  nature  financed 
from the envelope for specific programmes  

TOTAL appropriations under 
HEADING 2a 

Commitments 

of the multiannual financial framework 

Payments 

(5) 

(6) 

=4+6 

=5+6 

•  TOTAL  operational  appropriations 
operational headings) 

(all 

Commitments 

Payments 

•  TOTAL  appropriations  of  an  administrative  nature  financed 
from  the  envelope  for  specific  programmes  (all  operational 
headings) 

TOTAL appropriations Under          

Heading 1 to 6 

Commitments 

of the multiannual financial framework 
(Reference amount) 

Payments 

(4) 

(5) 

(6) 

=4+6 

=5+6 

0.000 

0.000 

[3 600.000] 

[-3 600.000] 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

[3 600.000] 

[-3 600.000] 

0.000 

0.000 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

[3 600.000] 

[-3 600.000] 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

 0.000 

0.000 

0.000 

0.000 

[3 600.000] 

[-3 600.000] 

0.000 

0.000 

Based on the estimated uptake of the proposal, the total additional pre-financing to be paid in 2026 amounts to EUR [16.1 billion]. At the same 
time, taking into account payment forecasts and implementation shifts, the net budgetary impact is estimated at EUR [3.6] billion, which will be 
included in the draft budget 2026. The budgetary impact is budgetary neutral over the MFF duration.  

Heading of multiannual financial  framework  

7 

‘Administrative expenditure’14 

DG: <…….> 

Year 

Year 

Year 

Year 

TOTAL 

14 

The necessary appropriations should be determined using the annual average cost figures available on the appropriate BUDGpedia webpage. 

EN 

12 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 Human resources  
 Other administrative expenditure  
TOTAL DG <…….> 

Appropriations  

DG: <…….> 

 Human resources  
 Other administrative expenditure  
TOTAL DG <…….> 

Appropriations  

2024 

2025 

2026 

2027 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

MFF 2021-
2027 

0.000 

0.000 

0.000 

TOTAL 
MFF 2021-
2027 

0.000 

0.000 

0.000 

TOTAL appropriations under HEADING 7 of the multiannual financial 
framework  

(Total 
commitments 
= Total 
payments) 

0.000 

0.000 

0.000 

0.000 

0.000 

EUR million (to three decimal places) 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

TOTAL appropriations under HEADINGS 1 to 7 

Commitments 

0.000 

0.000 

0.000 

0.000 

of the multiannual financial framework  

Payments 

0.000 

0.000 

[3 
600.000] 

[-3 
600.000] 

0.000 

0.000 

3.2.2.  Estimated output funded from operational appropriations (not to be completed for decentralised agencies) 

Indicate 
objectives and 
outputs  

Year  
2024 

Year  
2025 

Year  
2026 

Year  
2027 

OUTPUTS 

13 

EN 

Commitment appropriations in EUR million (to three decimal places) 

Enter as many years as necessary to show the 
duration of the impact (see Section1.6) 

TOTAL 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
o
N

Cost 

o
N

Cost 

o
N

Cost 

o
N

Cost 

o
N

Cost  N

o

Cost 

o
N

Cost 

Total 
No 

Total 
cost 

 

Type15 

Avera
ge 
cost 

SPECIFIC OBJECTIVE No 116… 

- Output 

- Output 

- Output 

Subtotal for specific objective No 1 

SPECIFIC OBJECTIVE No 2 ... 

- Output 

Subtotal for specific objective No 2 

TOTALS 

15 
16 

Outputs are products and services to be supplied (e.g. number of student exchanges financed, number of km of roads built, etc.). 
As described in Section 1.3.2. ‘Specific objective(s)’  

EN 

14 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.3. 

Summary of estimated impact on administrative appropriations  

–    The  proposal/initiative  does  not  require  the  use  of  appropriations  of  an 

administrative nature  

–    The proposal/initiative requires the use of appropriations of an administrative 

nature, as explained below 

3.2.3.1. Appropriations from voted budget 

VOTED APPROPRIATIONS 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 
2021 - 2027 

HEADING 7 

Human resources  

Other administrative expenditure  

Subtotal HEADING 7 

Outside HEADING 7 

Human resources  

Other expenditure of an administrative nature 

Subtotal outside HEADING 7 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

TOTAL 

0.000 

0.000 

0.000 

0.000 

0.000 

The  appropriations  required  for  human  resources  and  other  expenditure  of  an  administrative  nature 
will  be  met  by  appropriations  from  the  DG  that  are  already  assigned  to  management  of  the  action 
and/or  have  been  redeployed  within  the  DG,  together,  if  necessary,  with  any  additional  allocation 
which may be granted to the managing DG under the annual allocation procedure and in the light of 
budgetary constraints. 

3.2.4.  Estimated requirements of human resources  

–  ☑ The proposal/initiative does not require the use of human resources  

–    The  proposal/initiative  requires  the  use  of  human  resources,  as  explained 

below 

3.2.4.1.  Financed from voted budget 

Estimate to be expressed in full-time equivalent units (FTEs)17 

VOTED APPROPRIATIONS 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

 Establishment plan posts (officials and temporary staff) 

20 01 02 01 (Headquarters and Commission’s Representation Offices) 

20 01 02 03 (EU Delegations) 

01 01 01 01 (Indirect research) 

01 01 01 11 (Direct research) 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

17 

Please specify below the table how many FTEs within the number indicated are already assigned to the 
management of the action and/or can be redeployed within your DG and what are your net needs. 

EN 

15 

  EN 

 
  
 
 
 
 
Other budget lines (specify) 

• External staff (inFTEs) 

20 02 01 (AC, END from the ‘global envelope’) 

20 02 03 (AC, AL, END and JPD in the EU Delegations) 

Admin. Support 
line 
[XX.01.YY.YY] 

- at Headquarters 

- in EU Delegations  

01 01 01 02 (AC, END - Indirect research) 

 01 01 01 12 (AC, END - Direct research) 

Other budget lines (specify) - Heading 7 

Other budget lines (specify) - Outside Heading 7 

TOTAL 

3.2.4.2.  Financed from external assigned revenues 

EXTERNAL ASSIGNED REVENUES 

 Establishment plan posts (officials and temporary staff) 

20 01 02 01 (Headquarters and Commission’s Representation Offices) 

20 01 02 03 (EU Delegations) 

01 01 01 01 (Indirect research) 

01 01 01 11 (Direct research) 

Other budget lines (specify) 

• External staff (in full time equivalent units) 

20 02 01 (AC, END from the ‘global envelope’) 

20 02 03 (AC, AL, END and JPD in the EU Delegations) 

Admin. Support 
line  
[XX.01.YY.YY] 

- at Headquarters 

- in EU Delegations  

01 01 01 02 (AC, END - Indirect research) 

 01 01 01 12 (AC, END - Direct research) 

Other budget lines (specify) - Heading 7 

Other budget lines (specify) - Outside Heading 7 

TOTAL 

3.2.4.3.  Total requirements of human resources 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

TOTAL VOTED APPROPRIATIONS                                                   

Year 
+                                                                                               
2025 

2024 

Year 

EXTERNAL ASSIGNED REVENUES 

 Establishment plan posts (officials and temporary staff) 

20 01 02 01 (Headquarters and Commission’s Representation Offices) 

20 01 02 03 (EU Delegations) 

01 01 01 01 (Indirect research) 

01 01 01 11 (Direct research) 

Other budget lines (specify) 

• External staff (in full time equivalent units) 

20 02 01 (AC, END from the ‘global envelope’) 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Year 

Year 

2026 

2027 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

EN 

16 

  EN 

 
20 02 03 (AC, AL, END and JPD in the EU Delegations) 

Admin. Support 
line  
[XX.01.YY.YY] 

- at Headquarters 

- in EU Delegations  

01 01 01 02 (AC, END - Indirect research) 

 01 01 01 12 (AC, END - Direct research) 

Other budget lines (specify) - Heading 7 

Other budget lines (specify) - Outside Heading 7 

TOTAL 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

The staff required to implement the proposal (in FTEs):  

To be covered by 
current staff 
available in the 
Commission 
services  

Exceptional additional staff* 

To be financed 
under Heading 7 
or Research 

To be financed 
from BA line 

To be financed 
from fees 

N/A 

Establishment 
plan posts 

External 
staff 
(CA, SNEs, INT) 

Description of tasks to be carried out by: 

Officials and temporary staff 

External staff 

3.2.5.  Overview of estimated impact on digital technology-related investments 

Compulsory: the best estimate of the digital technology-related investments entailed 
by the proposal/initiative should be included in the table below.  

Exceptionally,  when  required  for  the  implementation  of  the  proposal/initiative,  the 
appropriations under Heading 7 should be presented in the designated line.  

The appropriations under Headings 1-6 should be reflected as “Policy IT expenditure 
on operational programmes”. This expenditure refers to the operational budget to be 
used to re-use/ buy/ develop IT platforms/ tools directly linked to the implementation 
of the initiative and their associated investments (e.g. licences, studies, data storage 
etc).  The  information  provided  in  this  table  should  be  consistent  with  details 
presented under Section 4 “Digital dimensions”. 

TOTAL Digital and IT appropriations 

Year 

Year 

Year 

Year 

2024 

2025 

2026 

2027 

TOTAL 
MFF 
2021 - 
2027 

EN 

17 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
HEADING 7 

IT expenditure (corporate)  

Subtotal HEADING 7 

Outside HEADING 7 

Policy IT expenditure on operational 
programmes 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

Subtotal outside HEADING 7 

0.000 

0.000 

0.000 

0.000 

0.000 

TOTAL 

0.000 

0.000 

0.000 

0.000 

0.000 

3.2.6.  Compatibility with the current multiannual financial framework  

The proposal/initiative: 

–  ☑can be fully financed through redeployment within the relevant heading of the 

multiannual financial framework (MFF) 

3.2.7.  Third-party contributions  

The proposal/initiative: 

–    does not provide for co-financing by third parties 

–    provides for the co-financing by third parties estimated below: 

Appropriations in EUR million (to three decimal places) 

Year  
2024 

Year  
2025 

Year  
2026 

Year  
2027 

Total 

Specify the co-financing body  

TOTAL appropriations co-
financed  

3.3. 

Estimated impact on revenue  

–    The proposal/initiative has no financial impact on revenue. 

–    The proposal/initiative has the following financial impact: 

–   on own resources  

–   on other revenue 

–   please indicate, if the revenue is assigned to expenditure lines 

Appropriations 
available for the 
current financial 
year 

     EUR million (to three decimal places) 

Impact of the proposal/initiative18 

Year 2024 

Year 2025  Year 2026 

Year 2027 

Budget revenue line: 

Article …………. 

18 

As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net 
amounts, i.e. gross amounts after deduction of 20% for collection costs. 

EN 

18 

  EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For assigned revenue, specify the budget expenditure line(s) affected. 

Other  remarks  (e.g.  method/formula  used  for  calculating  the  impact  on  revenue  or 
any other information). 

4. 

DIGITAL DIMENSIONS 

4.1. 

Requirements of digital relevance 

The  digital  requirements  are  limited  to  adaptation  and  extension  of  already  implemented 
solutions  for  shared  management  programmes,  namely  SFC2021.  The  adaptations  will 
correspond to the definition and inclusion of specific priorities in amended programmes.  

4.2. 

Data 

The data required is an extension and adaptation of the data model already implemented for 
the shared management programmes. The once-only principle is followed and this being an 
extension of an existing solution ensures full reuse of existing data. 

4.3. 

Digital solutions 

The digital solution is a minor adaptation of the SFC2021 platform, which is the tool used 
for all shared management programmes.  

4.4. 

Interoperability assessment 

SFC2021 is already in place and is used by all parties. The tool is interoperable with other 
systems and uses standard techniques for information exchange 

4.5.  Measures to support digital implementation 

The changes required in SFC2021 will be planned and implemented in such a way that the 
new  requirements  are  ready  at  the  time  of  the  adoption  and  entry  into  force  of  the  final 
regulation 

EN 

19 

  EN