EU disburses €2.5 billion of ETS revenues to clean energy projects in 11 member states
The European Commission and the European Investment Bank have released €2.5 billion from the EU’s Modernisation Fund, in the largest disbursement announcement of 2026 so far from the scheme that recycles EU Emissions Trading System (EU ETS) revenues into energy transition investments in lower-income member states.
The two institutions announced on Thursday that the €2.5 billion will support 51 energy-related projects across 11 EU member states. The Modernisation Fund is financed from the auctioning of EU ETS allowances and is one of the main channels through which carbon pricing revenues are redirected into decarbonisation across central, eastern and southern Europe. Among the beneficiaries in this round, Greece is set to receive €233.9 million for clean energy projects, and the latest allocation brings total disbursements from the fund since January 2021 to €23.2 billion.
The fund targets the modernisation of energy systems in beneficiary countries, backing projects that cut greenhouse gas emissions in the energy, industry and transport sectors and improve energy efficiency. Support can cover up to 70% of the relevant costs of non-priority investments, and beneficiary states are free to deploy the money as grants, premiums, guarantees, loans or capital injections, with all support subject to state aid clearance.
The disbursement follows a pattern of accelerating payouts from the fund as EU ETS auction revenues have grown. In December 2025, the fund disbursed €1.8 billion for 45 clean energy investments in 12 member states, which at the time brought cumulative support to €20.7 billion for 294 investments since 2021. Disbursements in 2025 alone totalled €5.46 billion, with the largest sums flowing to Czechia, Poland and Romania, and all projects supported that year focused on renewable electricity generation, deployment of renewables, modernisation of energy networks and energy efficiency improvements.
The scale of the programme underlines the growing fiscal weight of the EU ETS. The fund is financed from revenues from the auctioning of 2% of total EU ETS allowances for the 2021 to 2030 period, and at an allowance price of €40 per tonne of CO2 its total revenues could exceed €25 billion, with Romania, Czechia and Poland the largest beneficiaries. With EU allowance prices having traded well above that level for much of the current trading period, the fund’s firepower has consistently outstripped early projections.
The disbursement process runs on two six-month cycles per year. Once the EIB confirms an investment as priority, or the fund’s Investment Committee recommends a non-priority investment, the Commission adopts a disbursement decision and the EIB transfers the resources to member states within 30 days. The next disbursement round is expected towards the end of 2026.
