CELEX: 52021PC0569
Language: en
Date: 2021-12-22
Title: Proposal for a COUNCIL REGULATION amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027

EUROPEAN COMMISSION
            Brussels, 22.12.2021
            COM(2021) 569 final
            2021/0429(APP)
            
            Proposal for a
            COUNCIL REGULATION
            amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027
            
               
         
         
            
               EXPLANATORY MEMORANDUM
            
            
               1.CONTEXT OF THE PROPOSAL
            
            
               1.1Supporting a socially fair green transition
            
            
               
                  The ‘Fit for 55’ Package proposed on 14 July 2021 aims at delivering the transformational change needed across our economy, society and industry.
               
               
                  The proposed introduction of a new emissions trading system for buildings and road transport is an important component of the EU action to meet the ambitious climate targets. It should contribute to addressing the lack of emissions reductions to date in these sectors in the most cost-effective way. This introduction will also contribute to new own resources for the Union budget. At the same time, the adjustments required in these sectors are expected to have, in the short term, a direct impact on vulnerable households and micro-enterprises throughout the EU as long as they are reliant on carbon-intensive transport and heating modes. In order to help addressing these social impacts, the Commission has put forward a new initiative: the Social Climate Fund
                     1
                  .
               
            
            
               1.2 Implementing the next generation of own resources for the EU budget.
            
            
               
                  In line with its commitment in the Roadmap agreed as part of the Interinstitutional Agreement of 16 December 2020
                     2
                  , the Commission is proposing amending the Own Resources Decision
                     3
                   in order to establish the following new own resources for the EU budget:
               
            
            
               –a share of the revenues under the Emission Trading System (ETS) Directive
                  4
               , which the Commission has proposed to amend
                  5
               ,
            
            
               –a share of the revenues that will accrue from the Carbon Border Adjustment Mechanism
                  6
               ,
            
            
               –applying a uniform call rate to the share of residual profits of the multinational enterprises, re-allocated to Member States [pursuant to the Directive on implementation of the global agreement on re-allocation of taxing rights].
            
            
               In its conclusions of 21 July 2020, the European Council stated that the proceeds of the new own resources introduced after 2021 should be used for the repayment of Next Generation EU borrowing. It furthermore invited the Commission to “propose a revision of the MFF to this effect in due course” 
                  7
               .
            
            
               In the Interinstitutional Agreement of 16 December 2020, the European Parliament, the Council and the Commission agreed that “the repayment of the principal of such funds to be used for expenditure under the European Union Recovery Instrument (NextGenerationEU) and the related interest due will have to be financed by the general budget of the Union, including by sufficient proceeds from new own resources introduced after 2021.” In addition, the three institutions recognised the importance of the context of the European Union Recovery Instrument and stated that “expenditure from the Union budget related to the repayment of the European Union Recovery Instrument should not lead to an undue reduction in programme expenditure or investment instruments under the MFF”. The Interinstitutional Agreement further states that “it is also desirable to mitigate the increases in the GNI-based own resource for the Member States”.
                  8
                
            
            
               The new own resources proposed today are envisaged to be introduced by 2023.
            
            
               1.3Reasons for and objectives of the proposal
            
            
               The Commission is proposing a targeted revision of Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020
                  9
                for the following purposes:
            
            
               
                  –an increase of the Multiannual Financial Framework ceilings for the proposed Social Climate Fund;
               
               
                  –the introduction of an automatic adjustment of the Multiannual Financial Framework ceilings based on new own resources which would allow for the repayment of NextGenerationEU borrowing.
               
            
            
               2.LEGAL ELEMENTS OF THE PROPOSAL
            
            
               2.1Increase of the Multiannual Financial Framework expenditure ceilings for the Social Climate Fund.
            
         
         
            
               As part of the ‘Fit for 55’ legislative package, the Commission has proposed the establishment of a Social Climate Fund (‘the Fund’) to help address the social impacts arising from the emissions trading for the sectors of buildings and road transport. The Fund should provide funding to Member States to support measures and investments in energy efficiency, new heating and cooling systems, cleaner mobility as well as temporary direct income support.
            
            
               The Fund will target vulnerable households, vulnerable transport users and vulnerable micro- enterprises affected by the new ETS for road transport and buildings.
            
            
               The Fund will be financed under heading 3 ‘Natural Resources and Environment’ of the Multiannual Financial Framework, and in the annual budget nomenclature as part of the ‘Environmental and Climate Action policy’ cluster.
            
            
               Annex I to Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020
                  10
                should therefore be amended and replaced by the Annex to this proposal.
            
            
               2.2Specific annual adjustment based on new own resources
            
            
               
                  In order to allow for the repayment of NextGenerationEU borrowing, the Commission proposes a mechanism of automatic adjustment of the Multiannual Financial Framework ceilings.
               
               
                  The adjustment mechanism, proposed as a new article 4a of the Multiannual Financial Framework Regulation, provides for:
               
            
            
               –an adjustment of the Multiannual Financial Framework ceiling for sub-heading 2b in commitment appropriations, and of the ceiling for payment appropriations, to be made annually, commensurate to actual revenue stemming from new own resources collected in the previous year, as entered in the provisional accounts of the Commission in accordance with article 245(3) of the Financial Regulation;
            
            
               –the mechanism for the annual adjustment will be implemented from 2024 based on the envisaged introduction of the new own resources by 1 January 2023;
            
            
               –the amount of the adjustment will be capped at an annual amount of EUR 15  billion in 2018 prices. For the year 2027, the amount of the adjustment will be reduced by an amount of EUR 8 billion (in 2018 prices).
            
            
               –the adjustment will be communicated by the Commission to the European Parliament and the Council shortly after the adoption of the provisional accounts and thus by mid-April.
            
            
               An amount of EUR 15 billion corresponds to a linear repayment profile from the Union budget for non-repayable support based on the Commission’s issuance planning for NextGenerationEU, including the maturity structure.
            
            
               The fixed amount of EUR 8 billion which will be deducted in the calculation of the adjustment in the year 2027 corresponds to the annual average expenditure for the Social Climate Fund from 2026, when revenues from road transport and building ETS will start, to 2032.
            
            
               This specific annual adjustment of the payment ceiling will not be taken into account for the calculation of the maximum amounts for the annual adjustment in the payment ceiling under the Single Margin Instrument referred to in article 11(3) of the MFF Regulation.
            
            
               The adjustment mechanism based on new own resources will be accompanied by a draft amending budget to increase, as appropriate, expenditure budget line(s) in the budget of the year in which the mechanism is applied.
            
            
               3.BUDGETARY IMPACT
            
            
               The budgetary impact of the specific annual adjustment based on new own resources will take effect as of 2024. The amount will be equivalent to the actual amount of revenue stemming from new own resources collected in the previous year, as entered in the provisional accounts, and will be capped at an annual amount of EUR 15 billion in 2018 prices. In the year 2027, the calculation of the adjustment will feature a reduction of a fixed amount of EUR 8 billion (2018 prices).
            
            
               Regarding the Social Climate Fund, the Commission proposes to increase the ceiling in commitment appropriations of heading 3 ‘Natural Resources and Environment’ by an amount of EUR 2 176 million in 2025, EUR 9 132 million in 2026 and EUR 8 786 million in 2027, in 2018 prices.
            
            
               The proposed increases in the ceiling in commitments will result in an increase of payment needs. The Commission thus proposes to revise the payment ceiling for the years 2025, 2026 and 2027 by EUR 2 176 million, EUR 9 132 million and EUR 8 786 million respectively, in 2018 prices.
            
            
               2021/0429 (APP)
            
         
         
            
               Proposal for a
            
            
               COUNCIL REGULATION
            
            
               amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027
            
            
               THE COUNCIL OF THE EUROPEAN UNION,
            
            
               Having regard to the Treaty on the Functioning of the European Union, and in particular Article 312 thereof,
            
            
               Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Article 106a thereof,
            
            
               Having regard to the proposal from the European Commission,
            
            
               Having regard to the consent of the European Parliament
                  11
               ,
            
            
               After transmission of the draft legislative act to the national parliaments,
            
            
               Acting in accordance with a special legislative procedure,
            
            
               Whereas:
            
            
               (1)In the framework of the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources
                  12
               , the European Parliament, the Council and the Commission committed to a roadmap for the introduction of new own resources over the duration of the multiannual financial framework for the years 2021 to 2027 and to working towards introducing sufficient new own resources with a view to covering an amount corresponding to the expected expenditure related to the repayment of NextGenerationEU.
            
            
               (2)It is appropriate to lay down a mechanism allowing for repayments of the financing costs of NextGenerationEU during the period of the multiannual financial framework for the years from 2024 to 2027 with amounts equivalent to the new own resources collected in accordance with Council Decision (EU, Euratom) 2020/2053
                  13
                (the ‘Own Resources Decision’) and entered into the provisional accounts, without reducing expenditure for Union programmes.
            
            
               (3)The introduction of EU emissions trading for the buildings and road transport sectors, as set out in Directive 2003/87/EC of the European Parliament and of the Council
                  14
               , may give rise to short term social impacts. To address this challenge, Regulation (EU) [XXX] final of the European Parliament and of the Council established
                  15
                a Social Climate Fund, to be financed by the general budget of the Union under the multiannual financial framework. The ceiling for commitment appropriations of heading 3, ‘Natural Resources and Environment’, and the ceiling for payment appropriations should therefore be adapted for the years 2025, 2026 and 2027.
            
            
               (4)Regulation (EU, Euratom) 2020/2093 should therefore be amended accordingly,
            
            
               HAS ADOPTED THIS REGULATION:
            
            
               Article 1
            
            
               Regulation (EU, Euratom) 2020/2093 is amended as follows:
            
            
               (1)in Article 4, paragraph 4 is replaced by the following:
            
            
               ‘4. Without prejudice to Articles 4a, 6 and 7, no further technical adjustments shall be made in respect of the year concerned, either during the year or as ex post corrections during subsequent years.’;
            
         
         
            
               (2)the following Article 4a is inserted:
            
            
               ‘Article 4a
                  Specific annual adjustment based on new own resources
            
            
               1.Starting in 2024, after the submission of the provisional accounts of the year n-1 in accordance with Article 245(3) of the Financial Regulation, an upward adjustment to the expenditure ceiling for commitment appropriations of sub-heading 2b and to the ceiling for payment appropriations for the current year shall be made.
            
            
               2.This annual adjustment shall be of the following amounts:
            
            
               (a)for the years 2024, 2025 and 2026, an amount equivalent to the revenue which has been entered in the provisional accounts referred to in paragraph 1 stemming from the resources set out in Article 2(1), points (e), (f) and (g), of the Own Resources Decision.
            
            
               (b)for the year 2027, an amount equivalent to the revenue which has been entered in the provisional accounts referred to in paragraph 1 stemming from the resources set out in Article 2(1), points(e), (f) and (g), of the Own Resources Decision, reduced by a fixed amount of EUR 8 000 million (in 2018 prices).
            
            
               The annual adjustments referred to in the first subparagraph shall not exceed EUR 15 000 million (in 2018 prices) per year for the years 2024 to 2027.
            
            
               3.The Commission shall communicate the results of the annual adjustments referred to in paragraph 2 to the European Parliament and to the Council within 15 days of submission of the provisional accounts for year n-1 in accordance with Article 245(3) of the Financial Regulation.’;
            
            
               (3)in Article 11(3), the second subparagraph is replaced by the following:
            
            
               ‘Amounts corresponding to the upward adjustments referred to in Article 4a(1) and in the second subparagraph of Article 5(2) shall be in addition to the maximum amounts referred to in the first subparagraph of this paragraph.’;
            
            
               (4)Annex I is replaced by the text in the Annex to this Regulation.
            
            
               Article 2
            
            
               This Regulation shall enter into force on the twentieth 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 Brussels,
            
            
               
                     For the Council
               
               
                     The President
               
            
         
         
            
                  
                     (1)
                  
                        Proposal for a Regulation of the European Parliament and of the Council establishing a Social Climate Fund, COM(2021)568 final, 14.07.2021.
               
               
                  
                     (2)
                  
                        Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap for the introduction of new own resources, OJ L 433I, 22.12.2020, p. 28.
               
               
                  
                     (3)
                  
                        COM(2021)570.
               
               
                  
                     (4)
                  
                        Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance within the Union, OJ L 275, 25.10.2003, p. 32-46.
               
               
                  
                     (5)
                  
                        Proposal for a Directive of the European Parliament and of the Council amending Directive 2003/87/EC establishing a system for greenhouse gas emission allowance trading within the Union, Decision (EU) 2015/1814 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and Regulation (EU) 2015/757, COM(2021)551 final, 14.07.2021.
               
               
                  
                     (6)
                  
                        Proposal for a Regulation of the European Parliament and of the Council establishing a carbon border adjustment mechanism, COM(2021)564, 14.07.2021
               
               
                  
                     (7)
                  
                        Conclusions of the European Council of 21 July 2020, paragraphs A29 and 150.
               
               
                  
                     (8)
                  
                        Annex II, Preamble, points D and E.
               
               
                  
                     (9)
                  
                        Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 2027, OJ L 433 I, 22.12.2020, p. 11–22.
               
               
                  
                     (10)
                  
                        As last modified under the provisions of Council Regulation (EU, Euratom) 2020/2093. The Annex to this proposal is based on the technical adjustment of the multiannual financial framework for 2022 in accordance with Article 4 of Council Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027, COM(2021)365 of 7 June 2021.
               
               
                  
                     (11)
                  
                        OJ C […], […], p. […].
               
               
                  
                     (12)
                  
                        OJ L 433I, 22.12.2020, p. 28.
               
               
                  
                     (13)
                  
                        Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the European Union and repealing Decision 2014/335/EU, Euratom (OJ L 424, 15.12.2020, p. 1)
               
               
                  
                     (14)
                  
                        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).
               
               
                  
                     (15)
                  
                        OJ […], […], p. […].
               
            
      
    ---documentbreak--- 
      
         
               EUROPEAN COMMISSION
            Brussels, 22.12.2021
            COM(2021) 569 final
            
            ANNEX
            to the
            Proposal for a Council Regulation
            amending Council Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027
            
               
         
         
            
               ANNEX
            
            
               ‘ANNEX I
            
            
               MULTIANNUAL FINANCIAL FRAMEWORK (EU-27)
            
            
                     
                        (EUR million - 2018 prices)
                     
                  
               
                     
                        COMMITMENT APPROPRIATIONS
                     
                  
                  
                     
                        2021
                     
                  
                  
                     
                        2022
                     
                  
                  
                     
                        2023
                     
                  
                  
                     
                        2024
                     
                  
                  
                     
                        2025
                     
                  
                  
                     
                        2026
                     
                  
                  
                     
                        2027
                     
                  
                  
                     
                        Total
                           2021-2027
                     
                  
               
                     
                        1. Single Market, Innovation and Digital
                     
                  
                  
                     
                        19 712
                     
                  
                  
                     
                        20 211
                     
                  
                  
                     
                        19 133
                     
                  
                  
                     
                        18 633
                     
                  
                  
                     
                        18 518
                     
                  
                  
                     
                        18 646
                     
                  
                  
                     
                        18 473
                     
                  
                  
                     
                        133 326
                     
                  
               
                     
                        2. Cohesion, Resilience and Values 
                     
                  
                  
                     
                        49 741
                     
                  
                  
                     
                        51 920
                     
                  
                  
                     
                        52 194
                     
                  
                  
                     
                        53 954
                     
                  
                  
                     
                        55 182
                     
                  
                  
                     
                        56 787
                     
                  
                  
                     
                        58 809
                     
                  
                  
                     
                        378 587
                     
                  
               
                     
                        2a . Economic, social and territorial cohesion
                     
                  
                  
                     
                        45 411
                     
                  
                  
                     
                        45 951
                     
                  
                  
                     
                        46 493
                     
                  
                  
                     
                        47 130
                     
                  
                  
                     
                        47 770
                     
                  
                  
                     
                        48 414
                     
                  
                  
                     
                        49 066
                     
                  
                  
                     
                        330 235
                     
                  
               
                     
                        2b. Resilience and Values
                     
                  
                  
                     
                        4 330
                     
                  
                  
                     
                        5 969
                     
                  
                  
                     
                        5 701
                     
                  
                  
                     
                        6 824
                     
                  
                  
                     
                        7 412
                     
                  
                  
                     
                        8 373
                     
                  
                  
                     
                        9 743
                     
                  
                  
                     
                        48 352
                     
                  
               
                     
                        3. Natural Resources and Environment
                     
                  
                  
                     
                        55 242
                     
                  
                  
                     
                        52 214
                     
                  
                  
                     
                        51 489
                     
                  
                  
                     
                        50 617
                     
                  
                  
                     
                        51 895
                     
                  
                  
                     
                        58 064
                     
                  
                  
                     
                        56 947
                     
                  
                  
                     
                        376 468
                     
                  
               
                     
                        Of which: Market related expenditure and direct payments
                     
                  
                  
                     
                        38 040
                     
                  
                  
                     
                        37 544
                     
                  
                  
                     
                        37 604
                     
                  
                  
                     
                        36 983
                     
                  
                  
                     
                        36 373
                     
                  
                  
                     
                        35 772
                     
                  
                  
                     
                        35 183
                     
                  
                  
                     
                        257 499
                     
                  
               
                     
                        4. Migration and Border Management
                     
                  
                  
                     
                        2 324
                     
                  
                  
                     
                        2 947
                     
                  
                  
                     
                        3 164
                     
                  
                  
                     
                        3 282
                     
                  
                  
                     
                        3 672
                     
                  
                  
                     
                        3 682
                     
                  
                  
                     
                        3 736
                     
                  
                  
                     
                        22 807
                     
                  
               
                     
                        5. Security and Defence
                     
                  
                  
                     
                        1 700
                     
                  
                  
                     
                        1 725
                     
                  
                  
                     
                        1 737
                     
                  
                  
                     
                        1 754
                     
                  
                  
                     
                        1 928
                     
                  
                  
                     
                        2 078
                     
                  
                  
                     
                        2 263
                     
                  
                  
                     
                        13 185
                     
                  
               
                     
                        6. Neighbourhood and the World
                     
                  
                  
                     
                        15 309
                     
                  
                  
                     
                        15 522
                     
                  
                  
                     
                        14 789
                     
                  
                  
                     
                        14 056
                     
                  
                  
                     
                        13 323
                     
                  
                  
                     
                        12 592
                     
                  
                  
                     
                        12 828
                     
                  
                  
                     
                        98 419
                     
                  
               
                     
                        7. European Public Administration
                     
                  
                  
                     
                        10 021
                     
                  
                  
                     
                        10 215
                     
                  
                  
                     
                        10 342
                     
                  
                  
                     
                        10 454
                     
                  
                  
                     
                        10 554
                     
                  
                  
                     
                        10 673
                     
                  
                  
                     
                        10 843
                     
                  
                  
                     
                        73 102
                     
                  
               
                     
                        Of which: Administrative expenditure of the institutions
                     
                  
                  
                     
                        7 742
                     
                  
                  
                     
                        7 878
                     
                  
                  
                     
                        7 945 
                     
                  
                  
                     
                        7 997
                     
                  
                  
                     
                        8 025
                     
                  
                  
                     
                        8 077
                     
                  
                  
                     
                        8 188
                     
                  
                  
                     
                        55 852
                     
                  
               
                     
                        TOTAL COMMITMENT APPROPRIATIONS
                     
                  
                  
                     
                        154 049
                     
                  
                  
                     
                        154 754
                     
                  
                  
                     
                        152 848
                     
                  
                  
                     
                        152 750
                     
                  
                  
                     
                        155 072
                     
                  
                  
                     
                        162 522
                     
                  
                  
                     
                        163 899
                     
                  
                  
                     
                        1 095 894
                     
                  
               
                     
                        TOTAL PAYMENT APPROPRIATIONS
                     
                  
                  
                     
                        156 557
                     
                  
                  
                     
                        156 322
                     
                  
                  
                     
                        149 936
                     
                  
                  
                     
                        149 936
                     
                  
                  
                     
                        152 112
                     
                  
                  
                     
                        159 068
                     
                  
                  
                     
                        158 722
                     
                  
                  
                     
                        1 082 652’