On 16 July 2025, the EU Commission proposed a new Multiannual Financial Framework (“MFF”) of almost EUR 2 trillion(or 1.26% of the EU’s gross national income on average between 2028 and 2034) to confront the EU’s main competitive challenges, as outlined in the now famous Draghi report of September 2024.
For this purpose the new The Connecting Europe Facility, to upgrade infrastructure and invest in new technologies, will see its energy budget rise to €30 billion from just €6 billion. Grids upgrading sees a larger budget of €410 billion competitiveness fund to reduce wastage and slash bills for industry and households. The military mobility budget of the Connecting Europe Facility, will be multiplied tenfold. It will support dual-use infrastructure investments alongside civilian ones and contribute to a major boost for cybersecurity, infrastructure, and defence development overall. The MFF proposal indicates that to enhance energy security, the Connecting Europe Facility will provide financing to cross-border energy and transport projects.
In addition a budget tailored to local needs, with National and Regional Partnership Plans for investments and reforms, is aiming targeted impact and more flexible support for more economic, social and territorial cohesion across our Union;
Digital technologies are also featured in the the new MFF and boosted with a five fold increase to 54.8 bln to allow the awakening of an EU AI industry. As well is the expected increase in Defense funding to at least €131 billion for defense and space.
A new European Competitiveness Fund allowing investments in strategic technologies, for the benefit ofthe entire Single Market, as recommended in the Letta and Draghi Reports. The Fund, operating under one rulebook is expected to offer a single gateway to funding applicants, simplifying and accelerating EU funding to increase private and public investment. It will focus on four areas:
The new Fund will align with the current EU research framework, with its flagship Horizon Europe program of EUR 175 billion, to offer support from conception phase to scale-up and reduce both the cost for potential beneficiaries and the time for disbursement.
The winners of the second EU H2 Auction announced last May, 15 renewable hydrogen production located across five countries, expected to produce nearly 2.2 million tonnes of renewable hydrogen over ten years, avoiding more than 15 million tonnes of CO₂ emissions, could become excellent examples of how different funds could be leveraged to bring down costs and create a competitive market in Europe. The hydrogen will be produced in sectors such as transportation, the chemical industry, or the production of methanol and ammonia. They will receive a total of €992 million in EU funding, from the Innovation Fund sourced from the EU Emissions Trading System (ETS).
The winning bidders, awarded after the second European Hydrogen Bank (EHB) auction, will produce the renewable hydrogen in Europe with a subsidy that will help to close the price difference between their production costs and the market price and accelerate the deployment of cleaner fuels.
Of the selected projects, 12 are committed to producing renewable hydrogen with fixed premium support between €0.20 and €0.60 per kilogramme.
Photo by Kaley Skaggs, U.S. Army ERDC-CERL
The CTC Network promotes the accelerated transfer of environmentally sound technologies for low carbon and climate resilient development at the request of developing countries.
