(Ordinary legislative procedure: first reading)

[Amendment 1, unless otherwise indicated]

(1) The matter was referred back for interinstitutional negotiations to the committee responsible, pursuant to Rule 59(4), fourth subparagraph (A9-0260/2022). (2) * Amendments: new or amended text is highlighted in bold italics; deletions are indicated by the symbol ▌.

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 Article 175 third paragraph, Article 177 first paragraph, Article 192 (1) , Article 194 (2) and Article 322 (1) 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 Committee(1),

Having regard to the opinion of the Committee of the Regions(2),

Having regard to the opinion of the Court of Auditors,

Acting in accordance with the ordinary legislative procedure,

Whereas:

(1)  Since the adoption of Regulation (EU) 2021/241 of the European Parliament and of the Council establishing the Recovery and Resilience Facility,(3) unprecedented geopolitical events triggered by Russia's unprovoked and illegal military invasion of Ukraine and their direct and indirect socio-economic consequences have considerably affected the Union’s society and economy, its people and its economic, social and territorial cohesion. In particular, it has become clearer than ever that the Union’s energy security and energy independence is indispensable for a successful, sustainable and inclusive recovery from the COVID-19 crisis, as it is also a major factor contributing to the resilience of the European economy.

(2)  Due to the direct links between a sustainable recovery, building the Union’s resilience and the Union’s energy security, reducing dependence on fossil fuels, in particular from Russia, and its role for a just and inclusive transition, the Recovery and Resilience Facility is a well-suited instrument to contribute to the Union’s response to these newly emerging challenges, while ensuring compliance with Union legislation(4)a and with existing international commitments.

(3)  The Versailles Declaration of 10-11 March 2022 of the Heads of States and Governments invited the Commission to propose by the end of May a REPowerEU plan to phase out the dependency on Russian fossil fuel imports, which was subsequently reiterated in the European Council Conclusions of 24-25 March 2022. This should be done well before 2030 in a way that is consistent with the EU’s Green Deal and the climate objectives for 2030 and 2050 enshrined in the European Climate Law. Regulation (EU) 2021/241 should therefore be amended to enhance its ability to support reforms and investments dedicated to diversifying energy supplies, in particular fossil fuels, as well as to make the energy system more secure, affordable, accessible and sustainable, in particular with the uptake of renewables, energy efficiency and increased energy storage capacity, thereby strengthening the strategic autonomy of the Union alongside an open economy. Support should also be given to reforms and investments increasing the energy efficiency and energy savings of the Member States’ economies through better coherence with the Renewable Energy Directive, the Energy Efficiency Directive, the Energy Performance Buildings Directive and the Ecodesign for Sustainable Products Regulation.

(3a)  The phasing out of dependency on Russian fossil fuel imports should lead to a reduction in the overall energy dependency of the Union. In line with the Recovery and Resilience Facility, the REPowerEU chapters of the recovery and resilience plans should contribute to increasing and strengthening the strategic autonomy of the Union, without excessively increasing its dependency on imports of raw materials from third countries.

(4)  To maximise complementarity, consistency and coherence of policies and actions taken by the Union and Member States to foster independence and security and sustainability of the Union’s energy supply, these energy-related reforms and investments should be established through a dedicated ‘REPowerEU chapter’ of the recovery and resilience plans.

(4a)  In order to promote the objectives of the Treaty on the Functioning of the European Union related to economic, social and territorial cohesion, for the preparation of the REPowerEU chapters Member States should ensure that funds are distributed appropriately between regions, while taking into account the needs and challenges of each region.

(4b)  Particular considerations should be given to remote, peripheral and isolated regions and islands which already experience additional constraints.

(5)  To maximise the scope of the Union’s response, all Member States submitting a recovery and resilience plan after the entry into force of this Regulation should be required to include a REPowerEU chapter in their plan. This requirement should apply, in particular, to revised plans submitted by Member States from 30 June 2022 to take into account the updated maximum financial contribution. Unnecessary administrative burden should be avoided.

(6)  The REPowerEU chapter should include new reforms and investments contributing to the REPowerEU aims and tackling the crisis effect caused by the Russian military aggression against Ukraine. Furthermore, that chapter should contain an outline of other measures, financed from sources other than the Recovery and Resilience Facility, contributing to the energy-related objectives outlined in recital (3). The outline should cover measures whose implementation should take place between 1 February 2022 to 31 December 2026, the period during which the objectives set by this Regulation are to be achieved. It is imperative to swiftly increase investment in energy efficiency measures, such as the uptake of sustainable and efficient heating and cooling solutions, that present a sustainable and effective way to address some of the most pressing challenges of energy supply and energy cost. In view of the social impact of persistently high and volatile energy prices and in recognition of the principles of the European Pillar of Social Rights, particular emphasis should be given to addressing energy poverty, through supporting energy-poor and vulnerable consumers. As regards natural gas infrastructure, the investments and reforms of the REPowerEU chapters to diversify supply away from Russia should build on the needs currently identified through the assessment conducted and agreed by the European Network of Transmission System Operators for Gas (ENTSOG), established in the spirit of solidarity as regards security of supply and take into account the reinforced preparedness measures, including energy storage, taken to adapt to new geopolitical threats, as well as make a long term contribution to the green transition by being hydrogen-ready. There should be a significant proportion of measures in the chapter that have cross-border or multi-country dimension or effects, contributing, among other things, to European added value. Finally, the REPowerEU chapters should provide an explanation and a quantification of the effects of the combination of the reforms and investments financed by the Recovery and Resilience Facility and the other measures financed by other sources than the Recovery and Resilience Facility.

(6a)  An effective transition towards green energy and a rapid reduction of energy dependency should take into account the newly emerging challenges faced by households and micro-, small and medium enterprises, especially the most vulnerable ones. Such challenges relate to energy poverty, that is the inability, linked to non-affordability, to meet basic energy supply needs and a lack of access to essential energy services to guarantee basic levels of comfort and health, a decent standard of living and health, including adequate heating, hot water, cooling, lighting, and energy to power appliances, in the relevant national context, existing social policy and other relevant policies, caused by high energy expenditures and poor energy efficiency of homes and building.

(6b)  Furthermore, the current geopolitical context requires the Union to act in order to preserve its energy security, that is the continuous and uninterrupted availability of energy, security of supply and technical safety achievable by increasing efficiency and interoperability of transmission and distribution networks, promoting system flexibility, avoiding congestions, ensuring resilient supply chains, cybersecurity and the protection and climate adaptation of all, and in particular, critical infrastructure while reducing strategic energy dependencies.

(7)  An appropriate assessment criterion should be added to serve as a basis for the Commission to assess reforms and investments included in the REPowerEU chapter sand to ensure that reforms and investments are fit for achieving the specific REPowerEU-related objectives. An A rating should be required under this new assessment criterion for the relevant recovery and resilience plan to be positively assessed by the Commission.

(7a)  The effective transition towards green energy and a rapid reduction in energy dependency in an inclusive way call for measures to boost energy efficiency and savings in buildings and decarbonise faster industries. To accelerate Europe’s green transition, the share of sustainable and renewable energies in the energy mix needs to increase and measures need to be taken to and address infrastructure bottlenecks and labour and skill shortages. The potential of digital skill and technologies to serve the green transition should be exploited.

(8)  Investments in infrastructure and technologies alone are not sufficient to ensure a reduction of dependency from fossil fuels. Resources should be dedicated to the reskilling and upskilling of people, to further equip the workforce with green skills. This is in line with the objective of the European Social Fund Plus, which aims at supporting Member States in achieving a skilled and resilient workforce ready for the future world of work. In light of this, resources requested from the European Social Fund Plus envelope to support the objectives of REPowerEU should help support measures for the reskilling and upskilling of the workforce. The Commission will assess whether the measures included in the REPowerEU chapters significantly contribute to supporting a requalification of the workforce towards green skills.

(9)  The application of this regime should be without prejudice to all other legal requirements under Regulation (EU) 2021/241 unless this Regulation provides otherwise.

(9a)  The measures in the REPowerEU chapters should not undermine the overall green and digital levels of ambition of the already adopted Council implementing decisions approving the recovery and resilience plans.

(10)  The recovery and resilience plan, including the REPowerEU chapter, should contribute to effectively addressing all or a significant subset of the challenges identified in the relevant country-specific recommendations, including the country-specific recommendations to be adopted under the 2022 Semester cycle which refer inter alia to the energy challenges that Member States are facing.

(11)  An effective transition towards green energy and a reduction of energy dependency involves significant digital investments. In light of Regulation (EU) 2021/241, Member States should provide an explanation of how the measures in the recovery and resilience plan, including those included in the REPowerEU chapter, are expected to contribute to the digital transition or the challenges resulting therefrom and whether they account for an amount contributing to the digital target based on the methodology for digital tagging. However, given the unprecedented urgency and importance of energy challenges faced by the Union, reforms and investments included in the REPowerEU chapter should not be taken into account when calculating the plan’s total allocation for the purpose of applying the digital target requirement set by Regulation (EU) 2021/241. Nonetheless, Member States should endeavour to include, to the maximum extent possible, in the REPowerEU chapter measures that contribute to the digital target on the basis of the methodology for digital tagging.

(11a)  The excessive duration of administrative procedures is one of the main obstacles to the deployment of renewable energy projects in accordance with the objectives set for investments in renewables. These barriers include the complexity of the applicable rules for site selection and administrative authorisations for projects, the complexity and duration of the assessment of the environmental impacts of the projects, or the lack of sufficient staff of the permit-granting authorities. Further simplification and shortening of the administrative permit-granting processes, including shorter and clearer deadlines for decisions to be taken by competent authorities, is necessary to ensure that the Union achieves its energy and climate targets. In order to accelerate the permit-granting processes, the Commission should support Member States to identify areas particularly suitable for the deployment of renewable energy projects while fully applying the relevant environmental acquis, for which deadlines can be shorter.

(12)  Pursuant to Article 18(4) point (q) of Regulation (EU) 2021/241, the Member States should also provide a detailed report of the mandatory and adequate consultation process of local and regional authorities, social partners as well as NGOs and other relevant stakeholders relevant to reach the REPowerEU objectives, including, as relevant, from the agricultural sector, for reforms and investments included in the REPowerEU chapter. Such summaries should depict the timeline and stages of those consultations, note the stakeholders consulted, explain the outcome of those consultations and outline how the input received was reflected in REPowerEU chapters, which input was not reflected and for which reason and how the local and regional authorities and other relevant stakeholders will be involved in the implementation of the REPowerEU chapter and its monitoring. Subject to national legal frameworks, Member States are invited to involve national parliaments in debates related to the modification of the plans. Union standards on public participation and in particular the Code of Conduct on Partnership could serve as inspiration to the national authorities when conducting the consultation process..

(13)  The application of the ‘do no significant harm’ principle is essential to ensure that the investments and reforms undertaken as part of the recovery from the pandemic are implemented in a sustainable manner. It should continue to apply to the reforms and investments supported by the Facility, with one targeted and narrow exemption related to reforms and investments that are to be in operation by 31 December 2024 to safeguard the EU’ immediate energy security concerns, provided that a set of cumulative conditions apply. The total amount of resources for reforms and investments benefiting from that exemption should be limited to a maximum amount to be established by the Commission following a comprehensive needs-based assessment for immediate infrastructure needs. Such assessment should update the May 2022 estimates by the Commission according to which, to import sufficient LNG and pipeline gas from other suppliers, investments estimated at EUR 10 billion will be required by 2030 for a sufficient level of gas infrastructure, including LNG import terminals, pipelines, to connect underutilised LNG import terminals and the EU network, and reverse flow capacities.

(13a)  The REPowerEU chapters should be consistent with the National Energy and Climate Plans of that Member State and with the Union climate targets set out in Regulation (EU) 2021/1119.

(13b)  The REPowerEU chapter should include measures having a cross-border or multi-country dimension or effect. Close cooperation between the Commission and the Member States should be sought and achieved throughout the process. Moreover, Member States should be encouraged to co-operate among themselves as early as possible with a view to developing measures having a cross-border or multi-country dimension or effect to be included in the REPowerEU chapters.

(14)  Further incentives should be provided for Member States to request loans, through the clarification of the loan allocation procedure. In accordance with Regulation (EU) 2021/241, Member States may request loans until 31 August 2023, provided that they have informed the Commission of their intention to request such loan support. An intention to submit a loan request should be communicated to the Commission 30 days after the entry into force of this Regulation so that the redistribution of the remaining funds can be conducted in an orderly manner and for the Member States to request such support. When expressing the intention to request loan support and when submitting such loan request, Member States should act in good faith and, as far as possible, effectively request such support, so to ensure predictability and effectiveness of the redistribution. The Commission should inform, simultaneously, on equal terms and without undue delay, the European Parliament and the Council about the status of the loan requests and the proposed allocation of the loan supports.

(14a)  Member States are encouraged to submit the REPowerEU chapters as soon as possible and preferably within two months of the entry into force of this amending Regulation to foster synergies among the REPowerEU chapters in the national recovery and resilience plans. In order to ensure swift implementation, the Commission and the Council should conclude the assessment and approval of the recovery and resilience plans amended with the inclusion of the REPowerEU chapters as early as possible ideally within one month after the entry into force of this amending Regulation. Likewise, the Commission and the Member States are strongly encouraged to conclude operational arrangements at the latest one month after the adoption of the Council implementing decision. To this effect, the Commission and the Member States are encouraged to build on the experience of the prior negotiations for the operational agreements already concluded.

(15)  In addition, to incentivise a high level of ambition for reforms and investments to be included in the REPowerEU chapter, new dedicated funding sources should be provided.

(15a)  The Commission adopted a proposal for a Council regulation on an emergency intervention to address high energy prices that includes a solidarity contribution for the fossil industry applicable in all Member States. A proportion of the revenue generated by this new contribution could be made available in the form of external assigned revenue for the benefit of the REPowerEU chapters commensurate to the needs for achieving the REPowerEU objectives.

(16)  ▌ The current economical and geopolitical situation requires the Union to mobilise available resources to rapidly diversify Union’s energy supply and reduce dependence on fossil fuels before 2030. In this context, ▌Directive 2003/87/EC of the European Parliament and of the Council(5) should be amended to frontload the auctioning of allowances from the cap towards reforms and investments contributing to REPowerEU objectives, in the Recovery and Resilience Facility framework. In keeping with the objectives of Directive 2003/87/EC, such revenues should not support investments in fossil fuel infrastructure or facilities.

(16a)   The current intake rate of allowances to the Market Stability Reserve is needed to prevent in the long term a significant increase of the surplus of allowances in the greenhouse gas emission allowance trading within the Union. Therefore, Decision (EU) 2015/1814 of the European Parliament and of the Council(6)a and Directive 2003/87/EC should be amended to extend the doubling of the intake rate of the Market Stability Reserve to 24 % until 2030 and to reduce the upper and buffer thresholds in proportion to the reduction of the Union-wide quantity of allowances as from 2025.

(16b)  The Commission should identify additional sources to complement the financing for the REPowerEU chapters, including by providing flexibility related to unspent funds.

(16c)  For the allocation of the maximum financial contributions stemming from the new revenues for the REPowerEU chapters, the methodology set out in [Annexes I / II /II] should be updated to take into account of the new geopolitical situation and changed circumstances. Such indicators could include one or more of the following: energy dependency rate, in particular dependency on third countries, notably Russia; increase of energy-related costs of households for essential goods and services; share of fossil fuels in gross inland energy consumption.

(17)  In order to provide Member States and regions with sufficient flexibility in addressing the newly emerging challenges, Regulation (EU) 2021/1060 of the European Parliament and of the Council(7) should be amended to provide for the possibility to request up to 7.5% of resources under shared management programmes to contribute to the REPowerEU objectives as established in Regulation (EU) 2021/241 by supporting measures referred to in Article 21c(1)(b) thereof with the exception of fossil-free hydrogen, in Article 21c(1)(c) thereof with the exception of facilities dedicated to transport fossil fuels, and in Article 21c(1)(d) thereof while simplifying procedural requirements linked to programme implementation, in addition to the existing transfer possibility of up to 5%, provided that the latter is fully exhausted. Such ▌possibility is justified by the need to cover REPowerEU objectives, providing Member States and regions with additional flexibility that is crucial to address those urgent needs and should be justified by a higher financial need linked to additional ▌investments included in the REPowerEU chapter of Regulation (EU) 2021/241.

(17a)   The EU ETS was established to create an efficient, predictable and market driven system for reducing emissions and tackling the climate crises. While the amendment of Directive 2003/87/EC is justified by an exceptional situation, it remains important not to undermine trust in the EU ETS market through short-term interventions, and this amendment should therefore be seen as a one-off measure, which will not be repeated.

(17b)  In order to provide additional flexibility to Member States for the reallocation of resources with a view to providing tailor-made responses to the energy crisis, the Commission should asses the possibility of allowing financial transfers under the Investment for growth and jobs goal between the ERDF, the ESF and the Cohesion Fund for both programming periods.

▌

(19)  Disbursements under REPowerEU shall be made following the rules of the Recovery and Resilience Facility until the end of 2026. Payments in relation to the resources requested under Article 26a of Regulation (EU) 2021/1060 shall be made following the rules of Regulation (EU) 2021/1060 and the respective fund-specific regulations and shall be subject to the availability of funds approved in the annual EU budget.

(20)  A request for a dedicated funding for REPowerEU measures, including allowances for auctioning frontloaded within the EU ETS, under Article 26a of Regulation (EU) 2021/1060 ▌should be justified by a higher financial need linked to additional reforms and investments included in the REPowerEU chapter.

(20a)  To ensure that the financial support is frontloaded to better respond to the current energy crisis, upon request of a Member State to be submitted together with the REPowerEU chapter in a revised recovery and resilience plan, an amount of up to 20 % of the additional funding required to finance its REPowerEU chapter can be paid in the form of a pre-financing within, to the extent possible and subject to availability of funds, two months after the adoption by the Commission of the legal commitments.

(21)  The Commission should monitor the implementation of reforms and investments outlined in the REPowerEU chapter and their contribution to the REPowerEU objectives, as established in Regulation (EU) 2021/241.

(22)  Recent geopolitical events have considerably affected prices of energy, food and construction materials and have also caused shortages in the global supply chains, resulted in increased inflation and generated new challenges, including risk of energy poverty and higher cost of living. These developments may have a direct impact on the capacity to implement measures included in the recovery and resilience plans. To the extent that Member States can demonstrate that such developments make a specific milestone or target, either totally or partially, no longer achievable, such situations may be invoked as objective circumstances under Article 21. Moreover, to the extent Member States can demonstrate that the achievement of a specific milestone or target conflicts with the achievement of the Facility’s objectives including the REPowerEU objectives, such situations may also be invoked as objective circumstances under Article 21. In addition, no request for amendments should undermine the overall implementation of the recovery and resilience plans. Member States should also ensure that proposals to amend their recovery and resilience plans respond to challenges stemming from recent geopolitical events;

HAVE ADOPTED THIS REGULATION:

Article 1

Regulation (EU) 2021/241 is amended as follows:

(1)  In Article 4, paragraph 1 is replaced by the following:"

‘1. In line with the six pillars referred in Article 3 of this Regulation, the coherence and synergies they generate, and in the context of the COVID-19 crisis, the general objective of the Facility shall be to promote the Union’s economic, social and territorial cohesion by improving the resilience, crisis preparedness, adjustment capacity and growth potential of the Member States, by mitigating the social and economic impact of that crisis, in particular on women, by contributing to the implementation of the European Pillar of Social Rights, by supporting the green transition, by contributing to the achievement of the Union’s 2030 climate targets set out in point (11) of Article 2 of Regulation (EU) 2018/1999, by complying with the objective of EU climate neutrality by 2050 and of the digital transition, by increasing the resilience, security and sustainability of the Union energy system through a significant decrease of dependence on fossil fuels and through increasing the uptake of renewables, energy efficiency and energy storage capacity and diversification of energy supplies at Union level (‘REPowerEU objectives’) thereby contributing to the upward economic and social convergence, restoring and promoting sustainable growth and the integration of the economies of the Union, fostering high quality employment creation, and contributing to the strategic autonomy of the Union alongside an open economy and generating European added value.’

(1a)  The following Article is inserted:"

‘Article 13 a

REPowerEU pre-financing

The recovery and resilience plan containing a REPowerEU chapter may be accompanied by a request for pre-financing. Subject to the adoption by the Council of the implementing decision referred to in Articles 20(1) and 21(2) by 31 December 2023, the Commission shall make a pre-financing payment of an amount of up to 20 % of the additional funding requested to finance its REPowerEU chapter, under Articles 12 and 21a.’

(2)  Article 14 is amended as follows:

(-a)  paragraph 2 is replaced by the following:"

‘A Member State may request loan support at the time of the submission of a recovery and resilience plan referred to in Article 18, or at a different moment in time until 31 August 2023, as a rule provided that they have informed the Commission of their intention to request such loan support within 30 days after [the entry into force of this amending Regulation]. In the latter case, the request shall be accompanied by a revised recovery and resilience plan, including additional milestones and targets. The Commission may grant a loan to a Member State which has not expressed its intention to request such support within 30 days after [the entry into force of this amending Regulation] subject to the availability of resources following the approval of the loan support requests by the Member States which have expressed their intention within 30 days after [the entry into force of this amending Regulation].’

(a)  In paragraph 3, the following point is inserted after point (b):"

‘(ba) where applicable, the reforms and investments in line with Article 21c(1);’;

(b)  paragraph 4 is replaced by the following:"

‘4. The loan support to the recovery and resilience plan of the Member State concerned shall not be higher than the difference between the total costs of the recovery and resilience plan, as revised where relevant, and the maximum financial contribution referred to in Article 11, including, where relevant, the revenue referred to in Article 21a as well as, where relevant, resources from shared management programmes to support REPowerEU objectives referred to in Article 21b.’

(c)  paragraph 6 is replaced by the following:"

‘6. By derogation from paragraph 5, subject to the availability of resources, in exceptional circumstances the amount of the loan support may be increased, considering the needs of the requesting Member State, as well as requests for loan support already submitted or planned to be submitted by other Member States, while applying the principles of equal treatment, solidarity, proportionality and transparency. To facilitate the application of these principles, Member States shall communicate to the Commission within 30 days after [the entry into force of this amending Regulation], whether they intend to request loan support. Once a Member State expresses its intention to request loan support, the Commission shall notify, without undue delay, the European Parliament and the Council, simultaneously and on equal terms. Within 60 days after [the entry into force of this amending Regulation], the Commission shall communicate, without undue delay, to the European Parliament and the Council, simultaneously and on equal terms the proposed allocation of the loan supports to the Member States which have expressed their intention.’

(2 a)  In Article 17, paragraph 2 is replaced by the following:"

‘2. Measures started from 1 February 2020 onwards shall be eligible provided that they comply with the requirements set out in this Regulation, with the exception of measures included in the REPowerEU chapters, which may only start as from 1 February 2022.’

(2b)  In Article 18, paragraph 4 point (h) is replaced by the following:"

‘(h) an indication of whether the measures included in the recovery and resilience plan comprise cross-border or multi-country projects. With respect to the REPowerEU chapters, a confirmation that at least 35 % of the grants and at least 35 % of the loans, as applicable, to be used under the REPowerEU chapter are allocated to measures having a cross-border or multi-country dimension or effect, even if carried out by one Member State, and shall contribute to the objectives outlined in Article 21c(1), unless a derogation is granted to the Member State pursuant to Article 21c(1a);’

(2c)  In Article 18, paragraph 4 point (da) is inserted:"

‘(da) an explanation that the measures under Article 21c(1)(a) meet the conditions set out in Article 21c(4) and (4a);’

(3)  In Article 18 (4) (q) the following sentence is inserted:"

‘(q) for the preparation and, where available, for the implementation of the recovery and resilience plan, a detailed report of the consultation process, which shall be mandatory, adequate and conducted in accordance with the national legal framework, of local and regional authorities, social partners, civil society organisations, youth organisations and other relevant stakeholders, and how the input of the stakeholders is reflected in the recovery and resilience plan; in particular, the detailed report of the consultation process shall depict the timeline and the stages the outcome of the consultations with local and regional authorities, the social partners as well as the NGOs and other relevant stakeholders relevant to reach the REPowerEU objectives, note the stakeholders consulted, explain the outcome of these consultations on reforms and investments included in the REPowerEU chapter, outline how the input received was reflected in the REPowerEU chapter, which input was not reflected and for which reason and how the local and regional authorities and other relevant stakeholders will be involved in the implementation of the REPowerEU chapter and its monitoring;’

(4)  In Article 19(3), the following points are inserted:"

‘(da) whether the reforms and investments referred to in Article 21c(1) effectively contribute towards energy security, the diversification of the Union’s energy supply, increase of energy storage capacities or significant or reduction of dependence on fossil fuels before 2030, towards the Union’s 2030 targets including energy efficiency and renewable energy and towards the Union’s climate neutrality objective’;

‘(fa) whether at least 35 % of the grants and at least 35 % of the loans, as applicable, to be used under the REPowerEU chapter are allocated to measures having a cross-border or multi-country dimension or effect, even if carried out by one Member State, and shall contribute to the objectives outlined in Article 21c(1), unless a derogation is granted to the Member State pursuant to Article 21c(1a);’

‘(ka) whether the consultation process referred to in Article 18(4)(q) related to the measures referred to in Article 21c(1) is adequate and the pertinent input from the relevant stakeholders is properly reflected in the substance of the REPowerEU chapter as well as whether the detailed report of the consultation process depicts the timeline and the stages of the consultations, notes the stakeholders consulted, explains the outcome of these consultations, and outlines how the input received was reflected in the REPowerEU chapter, which input was not reflected and for which reason and how the relevant stakeholders will be involved in the implementation of the REPowerEU chapter and its monitoring;’

(4a)  In Article 21, paragraph 1 is replaced by the following"

‘1. Where the recovery and resilience plan including relevant milestones and targets is no longer achievable, either partially or totally, by the Member State concerned because of objective circumstances, including the crisis caused by Russia's military aggression against Ukraine, or where new measures are required to tackle the effects of this crisis, the Member State concerned may make a reasoned request to the Commission to make a proposal to amend or replace the Council implementing decisions referred to in Article 20(1) and (3). To that end, the Member State may propose an amended or a new recovery and resilience plan. Member States may request technical support for the preparation of such proposal under the Technical Support Instrument. ’

(4b)  In Article 21, paragraph 2 is replaced by the following:"

‘2. Where the Commission considers that the reasons put forward by the Member State concerned justify an amendment of the relevant recovery and resilience plan, the Commission shall assess the amended or new recovery and resilience plan in accordance with Article 19 and shall make a proposal for a new Council implementing decision in accordance with Article 20(1) within one month of the official submission of the request. The Member State concerned and the Commission may agree to extend that deadline by a reasonable period if necessary. The Council shall adopt the new implementing decision, as a rule, within four weeks of the adoption of the Commission proposal. ’

(5)  In Article 23, paragraph 1 is replayed by the following:"

‘Once the Council has adopted an implementing decision as referred to in Article 20(1), the Commission shall conclude an agreement with the Member State concerned constituting an individual legal commitment within the meaning of the Financial Regulation. For each Member State the legal commitment shall not exceed the total of the financial contribution referred to in point (a) of Article 11(1) for 2021 and 2022, the updated financial contribution referred to in Article 11(2) for 2023 and the amount calculated under Article 21a(2).’

(6)  The following Chapter is inserted after Chapter III:"

‘CHAPTER IIIa

REPowerEU

Article 21a

Article 21b

Article 21c

Article 21ca

Supra-national energy security needs assessment

1.  The Commission shall conduct an assessment of the needs to secure energy supply in the Union as a whole, prior to the approval of any recovery and resilience plan containing the REPowerEU chapter. That assessment shall aim to provide a supra-national perspective of the Union energy-security needs to facilitate the most efficient use of resources to reach the REPowerEU objectives. To that end, the Commission shall, at the latest by ... [one month after the entry into force of this amending Regulation] draw up a report identifying and evaluating the most urgent infrastructure and investment needs to secure energy supply in the Union as a whole, including mainly cross-border or multi-country projects.

2.  The report referred to in paragraph 1 shall cover at least the following:

3.  Member States shall contribute to the elaboration of the report referred to in paragraph 1 by providing information on national energy security needs and projects as requested by the Commission.

Article 21d

(7)  Annex V is amended in accordance with the Annex I to this Regulation.

Article 2

Regulation (EU) 2021/1060, is amended as follows:

(1)  In Article 11(1), the following point is added:"

‘(e) where applicable, the breakdown of financial resources by category of region drawn up in accordance with Article 108(2) and the amounts of allocations proposed to be requested pursuant to Article 26a or to be transferred pursuant to Article 26, or pursuant to Article 111, including a justification;’

(2)  In Article 22(3)(g), the following point is added:"

‘(i) a table specifying the total financial allocations for each of the Funds and, where applicable, for each category of region for the whole programming period and by year, including any amounts requested pursuant to Article 26a or transferred pursuant to Article 26 or pursuant to Article 27;’

(2a)  In Article 24, the following paragraph is added:"

‘7a. For programmes supported by the ERDF, Cohesion Fund or ESF+, the Member State or the managing authority may request, until 31 December 2025, an amount of up to 7,5 % of the budget of the initial national allocation to be contributed for the financing of measures supporting the objectives of the REPowerEU as referred to in Article 21c(1)(b) of Regulation (EU) 2021/241 with the exception of fossil-free hydrogen, in Article 21c(1)(c) of Regulation (EU) 2021/241 with the exception of facilities dedicated to transport fossil fuels, and in Article 21c(1)(d) of Regulation (EU) 2021/241. For programmes supported by the ERDF, Cohesion Fund or ESF+, such contributions shall only be made within the same programme and shall require a Commission decision amending the programme. They shall comply with all regulatory requirements and shall be approved in advance by the monitoring committee. The Member State or the managing authority shall communicate the revised financial tables and the revised programme to the Commission.’

(3)  In Article 26(1), the following is inserted after the end of the first sub-paragraph:"

‘Where the Partnership Agreement has been approved and one or more programmes have not yet been adopted, a transfer to the Recovery and Resilience Facility in accordance with this Article may be requested through notification of a revision of the information referred to in Article 11(1) points (c), (e) and (h) in accordance with Article 69(9).’

(4)  In Article 26 (1), the following new sub-paragraph is inserted:

▌"

‘3. Where the Partnership Agreement has been approved and the transfer is requested as part of a programme submission, the resulting inconsistency shall not be taken into account when assessing the programme pursuant to Article 23(1).’

(5)  The following Article is inserted:"

‘Article 26a

(5a)  In Article 112, the following paragraph is added:"

‘6a. Where a Member State decides to request resources under Article 26a of this Regulation, by way of derogation from Article 112(3) and (4) a co-financing rate of up to 100 % may be applied to expenditure declared in payment applications in the accounting years starting on 1 July 2022 and ending on 30 June 2026 for one or more priority axes in a programme supported by the ERDF, the ESF+ or the Cohesion Fund, for the financing of measures supporting the objectives of REPowerEU referred to in Article 21c(1)(b) of Regulation (EU) 2021/241 with the exception of fossil-free hydrogen, in Article 21c(1)(c) of that Regulation with the exception of facilities dedicated to transport fossil fuels, and in Article 21c(1)(d) of that Regulation.

A request for a modification of the co-financing rate shall be submitted as an amendment of a programme in accordance with Article 24 and shall be accompanied by a revised programme.’

(6)  Annexes II and V are amended in accordance with the Annex II to this Regulation.

Article 2a

Regulation (EU) No 1303/2013 is amended as follows:

(1)  In Article 60, the following paragraphs are added:"

‘2a. By way of derogation from Article 60(1) and the first and fourth subparagraphs of Article 120(3), at the request of a Member State, a co-financing rate of 100 % may be applied to expenditure for fostering energy crisis response capacities in accordance with the "REPowerEU objectives" and support for vulnerable households and micro-, small and medium enterprises from 1 February 2022 for one or more priority axes in a programme supported by the ERDF, the ESF or the Cohesion Fund.

Requests for modification of the co-financing rate shall be submitted in accordance with the procedure for the amendment of programmes set out in Article 30 and shall be accompanied by a revised programme or programmes.

The co-financing rate of 100 % shall apply only if the relevant amendment of the operational programme is approved by the Commission before the submission of the final application for an interim payment in accordance with Article 135(2).

2b.  In response to the energy crisis resulting from the Russian aggression towards Ukraine, the resources available for the 2014-2020 programming period for the Investment for growth and jobs goal may, at the request of a Member State, be transferred between the ERDF, the ESF and the Cohesion Fund, irrespective of the percentages referred to in points (a) to (d) of Article 92(1). For the purpose of those transfers, the requirements laid down in Article 92(4) shall not apply.

Resources transferred between the ERDF, the ESF and the Cohesion Fund under this paragraph shall be implemented in accordance with the rules of the Fund to which they are transferred.’

▌

Article 4

Directive 2003/87/EC is amended as follows:

(-1)   In Article 10(3), the following subparagraph is inserted after the first subparagraph:"

‘By way of derogation from the first subparagraph of this paragraph and as an extraordinary and one-time measure, for the period until 31 December 2025, a number of allowances shall be deducted from the volume of allowances to be auctioned from 1 January 2027 to 31 December 2030 by Member States in accordance with paragraph 2 of this Article and shall be auctioned over the period until 31 December 2025 in accordance with Article 10e, until the amount of revenue obtained from such auctioning has reached EUR 20 billion.’

(1)  the following Article is inserted:"

‘Article 10e

Article 5

Amendments to Decision (EU) 2015/1814

Article 1 of Decision (EU) 2015/1814 is amended as follows:

In paragraph 5, the first subparagraph ▌ is replaced by the following:"

‘In any given year, if the total number of allowances in circulation is between 700 million and 921 million, a number of allowances equal to the difference between the total number of allowances in circulation, as set out in the most recent publication as referred to in paragraph 4 of this Article, and 700 million, shall be deducted from the volume of allowances to be auctioned by the Member States under Article 10(2) of Directive 2003/87/EC and shall be placed in the reserve over a period of 12 months beginning on 1 September of that year. If the total number of allowances in circulation is above 921 million, the number of allowances to be deducted from the volume of allowances to be auctioned by the Member States under Article 10(2) of Directive 2003/87/EC and to be placed in the reserve over a period of 12 months beginning on 1 September of that year shall be equal to 12 % of the total number of allowances in circulation. By way of derogation from the last sentence, until 31 December 2030, the percentage shall be doubled. As from 2025, the thresholds referred to in this subparagraph shall be reduced in proportion to the reduction of the Union-wide quantity of allowances referred to in Article 9 of Directive 2003/87/EC in the same year.’

▌

Article 5a

Entry into force

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

Article 6

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

Done at Brussels,

For the European Parliament For the Council

The President The President

ANNEX I

Annex V of Regulation (EU) 2021/241 is amended as follows:

(a)  In section 2, the following points are added:

‘2.12. The measures referred to in Article 21c (1) and (2) are expected to effectively contribute towards the Union’s security of supply for the Union as a whole, notably through a diversification of energy supply, increase of energy storage capacities or significant or reduction of dependence on fossil fuels before 2030, towards the Union’s 2030 targets including energy efficiency and renewable energy and towards the EU’s climate neutrality objective. Where relevant, measures contained in the REPowerEU chapter shall give adequate priority to the needs of those affected by energy poverty as well as to the reduction of vulnerabilities during the nearest winter seasons.

When assessing the measures referred to in Article 21c (1) under this criterion, the Commission shall take into account the following elements:

Scope

—  the implementation of the envisaged measures is expected to significantly contribute to the improvement of energy infrastructure and facilities to meet immediate security of supply needs for gas, including LNG, notably to enable diversification of supply in the interest of the Union as a whole, while ensuring that the relevant infrastructures are hydrogen ready,

or

—  the implementation of the envisaged measures is expected to significantly contribute to boosting energy efficiency and savings in buildings, including via investment schemes targeted to vulnerable households, SMEs and micro-enterprises,

or

—  decarbonising industry, increasing energy storage capacity, increasing production and uptake of sustainable biomethane, renewable energy, renewable fuels of non-biological origin (RFNBOs), renewable or fossil free hydrogen and speeding up permitting processes for plants producing renewable energy, including the improvement of related electricity generation and other infrastructure, including by accelerating permitting procedures,

or

—  addressing energy poverty, in particular through measures benefitting vulnerable and low-income households,

or

—  incentivising reduction of energy demand, including by upscaling existing energy savings solutions,

or

—  the implementation of the envisaged measures is expected to address energy infrastructure bottlenecks, including the connection of grids to new renewable energy sources,, in particular by constructing cross-border links with other Member States, or supports zero-emission transport and its infrastructure in a just and inclusive way, including railways, thereby contributing to ensuring affordable energy and transport in the Union,

or

—  the implementation of the envisaged measures is expected to significantly contribute to supporting a requalification of the workforce towards green and the related digital skills and energy transition, including for the administrative implementation of those objectives, as well as supporting value chains in key materials and technologies linked to the green transition and the use of sustainable construction materials and products, thereby reducing the dependency on primary critical raw materials relevant to the energy transition,

and

—  whether the measures and explanation, provided under Article 21c (1) are complementary to each other and significantly contribute, together with measures under Article 21c(2), points (a) and (b), to achieve energy security, the Union’s diversification of energy supply, increase of energy storage capacities or significant or reduction of dependence on fossil fuels before 2030, towards the Union’s 2030 targets including energy efficiency and renewable energy and towards the EU’s climate neutrality objective.

Rating

A – to a large extent

B – to a medium extent

C – to a small extent

2.12a.  The consultation process as referred to in Article 18(4)(q) related to the measures referred to in Article 21c(1) is adequate and the pertinent input from the relevant stakeholders is properly reflected in the substance of the REPowerEU chapter.

The Commission shall take into account the following elements for the assessment of this criterion

Scope:

—  the consultation process as referred to in Article 18(4)(q) related to the measures referred to in Article 21c(1) is adequate

and

—  the detailed consultation report depicts the timeline and the stages of the consultations, notes the stakeholders consulted and explains the outcome of these consultations,

and

—  the pertinent input from the relevant stakeholders is properly reflected in the substance of the REPowerEU chapter

and

—  the Members State has provided information on which input was not reflected and for which reason,

and

—  the Member State has provided information on how the local and regional authorities and other relevant stakeholders will be involved in the implementation of the REPowerEU chapter and its monitoring.

Rating

A – to a large extent

B – to a medium extent

C – to a small extent

2.12b.  Unless a derogation is granted to the Member State pursuant to Article 21c(1a), at least 35 % of the grants and at least 35 % of the loans, as applicable, to be used under the REPowerEU chapter is allocated to measures having a cross-border or multi-country dimension or effect, even if carried out by one Member State, and shall contribute to the objectives outlined in Article 21c(1).

Rating

A – At least 35 % of the grants and at least 35 % of the loans, as applicable, to be used under the REPowerEU chapter is allocated to measures having a cross-border or multi-country dimension or effect, unless a derogation is granted

C – Less than 35 % of the grants or less than 35% of the loans, as applicable, to be used under the REPowerEU chapter is allocated to measures having a cross-border or multi-country dimension or effect, without a derogation being granted

2.12c.  The measures under Article 21c(1)(a) meeting the cumulative conditions set out in Article 21c(4) fulfil the requirements of Article 21c(4a).

The Commission shall take into account the following elements for the assessment of this criterion

Scope:

–  there is no adequate clean technology alternative in terms of costs or timeline of implementation to reach the REPowerEU objectives under Article 21c(1)(a);

and

–  the potential harm to the EU's environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852 is narrowed to the strict unavoidable extent;

and

–  the potential harm to the EU's environmental objectives is mitigated by accompanying measures, or other measures contributing to the REPowerEU objectives, and the integrity of EU’s 2030 and 2050 climate targets is not jeopardised;

and

–  the measure is to be in operation by 31 December 2024.

Rating

A – all the measures under Article 21c (1) (a) meeting the cumulative conditions set out in Article 21c(4) fulfil the requirements of Article 21c(4a)

C – one or more measures under Article 21c (1) (a) meeting the cumulative conditions set out in Article 21c(4) do not fulfil the requirements of Article 21c(4a)’

(b)  In section 3 the part which starts with the words “As a result of the assessment process, and taking into account the ratings” is replaced by the following:

‘As a result of the assessment process, and taking into account the ratings:

(a)  The recovery and resilience plan complies satisfactorily with the assessment criteria:

If the final ratings for the criteria under point 2 include scores with:

—  an A for criteria 2.2, 2.3, 2.5, 2.6, 2.12, 2.12a, 2.12b and 2.12c;

and for the other criteria:

—  all As,

or

—  no majority of Bs over As and no Cs.

(b)  The recovery and resilience plan does not comply satisfactorily with the assessment criteria:

If the final ratings for the criteria under point 2 include scores with:

—  not an A in criteria 2.2, 2.3, 2.5, 2.6, 2.12, 2.12a, 2.12b and 2.12c;

and for the other criteria:

—  a majority of Bs over As,

or

—  at least one C.’

ANNEX II

▌

(2)  paragraph 3.1 of Annex V of Regulation (EU) 2021/1060 is amended as follows:

(a)  the following is inserted:

‘Reference: Articles 14, 26, 26a and 27 CPR’

(b)  the first table is amended as follows:

(c)  In footnote 1, the following is inserted:

‘ Applicable only to programme amendments in accordance with Articles 14, 26, and 26a except complementary transfers to the JTF in accordance with Article 27 CPR.▌’

(1) OJ C , , p. . (2) OJ C , , p. . (3) Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17). (4) a Council Directive 92/43/EEC, Directive 2009/147/EC, Directive 2000/60/EC, Regulation (EC) No 1367/2006, Regulation (EU) 2021/1767 and Proposal for a Regulation of the European Parliament and of the Council on nature restoration (COM(2022)0304 final). (5) Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32). (6) a Decision (EU) 2015/1814 of the European Parliament and of the Council of 6 October 2015 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/EC (OJ L 264, 9.10.2015, p. 1). (7) Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (OJ L 231, 30.6.2021, p. 159).