This report, Financing the NECP: EU instruments, based on a comparative analysis of 12 EU Member States, confirms a troubling reality: not a single analyzed Member State has allocated sufficient planned financing to meet its 2030 climate targets (particularly under With Additional Measures – WAM – scenarios). While EU instruments such as the Recovery and Resilience Facility (RRF) and Cohesion Policy form the backbone of national climate plans, explicit gap assessments remain rare, and most draft NECPs lack binding integration into national budgetary processes.
Executive summary
The comparative assessment conducted across twelve EU Member States demonstrates that financing remains one of the most critical and challenging dimensions of NECP implementation.
A major finding of the report is the widespread existence of significant funding gaps. In most countries, available and planned financing is insufficient to achieve NECP objectives, especially under more ambitious WAM scenarios. Comprehensive funding gap assessments remain rare, methodologies are inconsistent, and many NECPs fail to establish clear links between identified investment needs and concrete financing pathways. This weakens both the credibility and implementability of national climate and energy strategies.
The report also identifies important governance shortcomings. Fragmented funding structures, overlapping institutional responsibilities, insufficient transparency, weak monitoring systems, and limited administrative capacities continue to constrain effective implementation. In many cases, NECPs remain disconnected from national fiscal planning and broader economic governance processes, reducing their strategic relevance and limiting long-term policy coherence.
The findings also reveal that the social dimension of the transition remains underdeveloped. While energy poverty and just transition challenges are increasingly recognised, targeted financing mechanisms for vulnerable households and affected communities are still limited and often inaccessible to those most in need. Without stronger social integration, there is a risk that climate policies could exacerbate inequalities and undermine public support for the transition.
The analysis confirms that EU-level instruments continue to represent the backbone of NECP financing across most Member States. The Recovery and Resilience Facility, Cohesion Policy Funds, the Just Transition Fund, ETS revenues, and other EU mechanisms have significantly accelerated investments in renewable energy, energy efficiency, sustainable mobility, and climate transition measures.
However, this EU financing is now at risk, particularly as the RRF approaches its planned phase-out. EU governance interventions, including DNSH principles and the gradual improvement of fossil fuel subsidy monitoring, have also had a positive impact on national funding schemes. Nevertheless, major inconsistencies persist between climate objectives and continued support for fossil fuel-related activities in many Member States, mostly coming from national budgets.
Read the full report here.
The report is produced by Bond Beter Leefmilieu & DOOR
Contributing organisations: CDE (Czech Republic), ELF (Estonia), Focus (Slovenia), Germanwatch (Germany), ISD (Poland), MTVSZ (Hungary), WWF Italia (Italy), RAC France (France), SEO/BirdLife (Spain), ZERO (Portugal)