The European Commission and the European Investment Bank have released €1.8 billion from the Modernisation Fund to support 45 clean energy projects across 12 EU Member States. This round of funding also marks a milestone for Portugal, which received its first allocation after becoming a beneficiary country in 2024.
The Modernisation Fund is financed through revenues from the EU Emissions Trading System. With this latest disbursement, total support from the Fund has reached €20.7 billion, covering 294 projects since 2021. The focus remains clear: upgrading energy systems, cutting greenhouse gas emissions, improving energy efficiency, and reducing reliance on fossil fuel imports.
Strong momentum in 2025
This is the second disbursement of 2025. An earlier allocation in July provided €3.66 billion for 34 projects. Together, the two rounds bring this year’s total to €5.46 billion, supporting 79 projects across beneficiary Member States.
“Modernisation Fund is a key component of EU climate and energy policy framework for achieve our climate targets for 2030 and beyond. It has proven to be an effective instrument for the targeted Member States, enabling them to accelerate the shift to renewables in their energy systems and leverage EU support.” Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition
Funding in 2025 has been distributed as follows:
- Bulgaria: €50 million
- Croatia: €224 million
- Czechia: €1.78 billion
- Estonia: €111 million
- Hungary: €279 million
- Greece: €163 million
- Latvia: €40 million
- Lithuania: €42 million
- Poland: €1.44 billion
- Portugal: €15 million
- Romania: €1.24 billion
- Slovakia: €26 million
- Slovenia: €47 million
What the projects focus on
All projects supported this year are linked to renewable energy, energy networks, or efficiency improvements. Many address practical, everyday needs at national and local levels.
Examples include:
- Renewable-based heating and cooling for district heating systems and industry in Bulgaria
- Improved efficiency and renewable heat use in heating and cooling systems in Croatia
- New electricity storage capacity linked to renewables in Czechia
- Energy efficiency upgrades and renewable energy use in public buildings in Estonia
- Electricity network upgrades in Greece to better handle renewable supply
- Increased grid capacity in Latvia
- Large-scale energy storage projects in Lithuania
- Energy efficiency improvements in municipal thermal baths in Hungary
- A clean air programme in Poland supporting home energy upgrades and cleaner heat sources
- Renewable heating and cooling for geothermal and thermal medical facilities in Portugal
- Efficiency improvements in EU ETS-regulated industrial installations in Romania
- Modernisation of transmission and distribution networks in Slovenia to integrate renewables
- Reduced emissions and higher efficiency in industrial sites and related buildings in Slovakia
These investments support Member States in meeting their climate and energy targets while strengthening industrial competitiveness. They also help align national energy systems with long-term plans under the EU’s National Energy and Climate Plans.
“The Modernisation Fund is proving that EU ETS revenues can drive real change. By unlocking investment across all Member States, it is helping lower-income countries deliver smarter electricity networks and cleaner transport. Five years on, €20 billion disbursed signals a major milestone for Europe’s energy transition.” Wopke Hoekstra, Commissioner for Climate, Net Zero and Clean Growth
By directing ETS revenues back into energy systems, the Modernisation Fund continues to play a practical role in supporting cleaner electricity, better infrastructure, and lower emissions across the EU—project by project, country by country.
