EU carbon rules / Regulations / Modernisation Fund
In force Framework Finance
Modernisation Fund
Energy transition in lower-income Member States
- Reference
- ETS Directive, Article 10d
- Key date
- continuous
- Applies to
- Beneficiary Member States
01
Who the regulation applies to
This regulation applies to:
- Beneficiary Member States of the Modernisation Fund — the 13 lower-income Member States with GDP per capita below 60% of the EU average (2013) or below 75% of the EU average (2016–2018): Bulgaria, Czechia, Estonia, Greece, Croatia, Latvia, Lithuania, Hungary, Poland, Portugal, Romania, Slovenia and Slovakia
- Investment projects proposed by those beneficiary Member States to modernise energy systems and improve energy efficiency (including small-scale investment projects) — covering renewable energy, energy efficiency, energy storage, energy networks and a just transition in carbon-dependent regions; up to 20% may be used for non-priority investments
- The application period is 2021 to 2030
The local regmap does not specify the primary source text; this entry is taken from the text of Directive (EU) 2023/959 amending Article 10d and Article 10(1) of Directive 2003/87/EC (the repository's Dir-2003-87_EU-ETS_base.md is the original 2003 text and does not contain Article 10d). The source is the official EUR-Lex text.
The following provisions define its scope:
Article 10d(1) of Directive 2003/87/EC, as amended by Directive (EU) 2023/959 — establishment of the Modernisation Fund
1. A fund to support investments proposed by the beneficiary Member States, including the financing of small-scale investment projects, to modernise energy systems and improve energy efficiency shall be established for the period from 2021 to 2030 (the “Modernisation Fund”). The Modernisation Fund shall be financed through the auctioning of allowances as set out in Article 10, for the beneficiary Member States set out therein.
Article 10(1), third subparagraph, of Directive 2003/87/EC, as amended by Directive (EU) 2023/959 — beneficiary Member States
2 % of the total quantity of allowances between 2021 and 2030 shall be auctioned to establish a fund to improve energy efficiency and modernise the energy systems of certain Member States (the ‘beneficiary Member States’) as set out in Article 10d (the ‘Modernisation Fund’). The beneficiary Member States for that amount of allowances shall be the Member States with a GDP per capita at market prices below 60 % of the Union average in 2013. The funds corresponding to that amount of allowances shall be distributed in accordance with Part A of Annex IIb. In addition, 2,5 % of the total quantity of allowances between 2024 and 2030 shall be auctioned for the Modernisation Fund. The beneficiary Member States for that amount of allowances shall be the Member States with a GDP per capita at market prices below 75 % of the Union average during the period from 2016 to 2018. The funds corresponding to that amount of allowances shall be distributed in accordance with Part B of Annex IIb.
02
What the regulation requires
| Duty | Trigger | Evidence | Timing |
Beneficiary Member States invest in modernisation
Funds are used to modernise the energy systems of lower-income Member States. | Beneficiary Member States and their projects | Investment plan, Member State proposal | 2021–2030 |