1056 as regards specific measures to address strategic challenges in the context of the mid-term review - Main contents

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dossier	COM(2025)123 - Amendment of Regulations (EU) 2021/1058 and (EU) 2021/1056 as regards specific measures to address strategic challenges in ...
document	COM(2025)123
date	April 1, 2025

(1) In recent years, geopolitical dynamics have been marked by profound uncertainty, necessitating a fundamental re-evaluation of the Union’s strategic autonomy, resilience and security alongside the challenges stemming from the green, social and technological transitions. Those simultaneous transformations demonstrate the urgent need to close the innovation gap, accelerate decarbonisation efforts to reinforce economic competitiveness and reduce external dependencies by diversifying supply chains, scaling-up domestically produced green energy, and investing in critical sectors.

(2) As the Union’s main investment instrument within the Multiannual Financial Framework, cohesion policy plays a crucial role in supporting those priorities. It drives targeted investments that contribute to economic, social and territorial cohesion while at the same time addressing emerging challenges.

(3) The legal framework for cohesion policy programmes provides for a mid-term review in 2025, which offers a timely and unique opportunity to refocus programmes on addressing new challenges and opportunities, to accelerate implementation and to increase their effectiveness to respond to both old and new Union priorities.

(4) The Commission presented in the Competitiveness Compass, the Clean Industrial Deal and the Affordable Energy Action Plan a concrete path for Europe to regain its competitiveness and secure sustainable prosperity. The ERDF and the Cohesion Fund already support investments to climate objectives as stipulated in Regulation (EU) 2021/1060. However, Member States should step up their efforts in order to ensure that decarbonisation is a driver for growth for European industries and the prosperity of Europeans by, amongst others, scaling up support to clean-tech and the transition to clean energy, investing in energy infrastructure projects that can ensure a true Energy Union as well as supporting decarbonisation of production processes and products.

(5) In light of the unprecedented geopolitical instability and the need for the Union to guarantee its own defence, cohesion policy funding should be swiftly mobilised to directly support investments in defence capabilities. It is therefore necessary to create new specific objectives for support from the European Regional Development Fund (ERDF) and the Cohesion Fund established by Regulation (EU) 2021/1058 of the European Parliament and of the Council ⁴ to finance industrial capacities in the defence sector and to allow for investments in resilient defence or dual-use infrastructure with a view to fostering military mobility, in line with the scope of those funds. Industrial capacities to foster defence capabilities should relate to the technological development and production of defence products and other products for defence purposes, as defined in Article 2 of [draft] Council Regulation [xxxx] establishing the Security Action for Europe (SAFE) through the reinforcement of European defence industry Instrument, in particular those referred to in Article 1 of that Regulation. Member States are encouraged to use the possibility foreseen in the current legal framework of voluntarily transferring resources allocated to them in shared management to directly managed programmes with defence and security objectives. In this context, transfers to the Connecting Europe Facility (CEF) military mobility envelope would ensure coordinated interventions along the military mobility corridors highlighted in the White Paper on Defence.

(6) Furthermore, in order to quickly inject liquidity to cover the most pressing needs notably for investments in enhanced defence capabilities, additional financing possibilities should be offered. In particular, it is necessary to provide for an additional one-off pre-financing of 30% of the amounts programmed under dedicated priorities for defence under the respective policy objectives of the ERDF and the Cohesion Fund and the possibility to apply a Union co-financing rate of up to 100%.

(7) The ERDF and the Cohesion Fund may, within their respective scopes, already support investments contributing to the objectives of the ‘Strategic Technologies for Europe Platform’ (STEP), which aims to strengthen Europe’s technological leadership. In order to further incentivise investments from the ERDF and the Cohesion Fund in those critical fields, the limitation for the overall contribution of the ERDF and the Cohesion Fund to those priorities should be removed and the possibility for Member States to receive a higher pre-financing for related programme amendments should be extended. Furthermore, the possibilities for the financing of productive investments contributing to STEP objectives in enterprises other than SMEs should be extended to all regions. Similarly, such investments should also be possible in regions where they facilitate industrial adjustment linked to digital transformation, including digital capacities in cloud, AI and supercomputing, or the decarbonisation and circularity of production processes and products, such as in the automotive industry or the energy intensive industries. In addition, the possibility provided for investments contributing to STEP objectives to finance productive investments in enterprises other than SMEs from the Just Transition Fund (JTF) established by Regulation (EU) 2021/1056 of the European Parliament and of the Council ⁵ without the need and irrespective of the outcome of a gap analysis should be extended to all investments.

(8) In order to enhance energy security, accelerate the energy transition and clean mobility, the investments under STEP and the Alternative Fuels Infrastructure Facility should be complemented by creating a new specific objective for the ERDF and the Cohesion Fund under policy objective 2 to promote energy interconnectors and related transmission infrastructure, and the deployment of charging infrastructure. In order to accelerate investments in these fields, priorities dedicated to this specific objective should benefit from an additional one-off pre-financing of 30% of the amounts programmed under those priorities and from the possibility to apply a Union co-financing rate of up to 100%. Managing authorities should aim to leverage a maximum amount of private finance, where relevant. This enhanced investment effort will enable energy-intensive sectors to access more stable and diverse energy sources in a less fragmented internal energy market, buttressing their sustainability and competitiveness. Moreover, expanding the ERDF’s support for decarbonisation projects allows energy-intensive industries to prioritise high-impact innovations aligned with EU climate objectives.

(9) Important Projects of Common European Interest (IPCEI) result from a State aid instrument requiring cross-European cooperation for innovative technologies or pan-European infrastructures. IPCEI are projects that support and promote large-scale, cross-border projects that are considered essential for the economic growth, innovation, and competitiveness of the Union. To help accelerate the design of new IPCEI and the implementation of the existing ones, support from the ERDF for investments in projects participating in an IPCEI as approved by the Commission pursuant to Article 107(3), point (b), of the Treaty on the Functioning of the European Union (TFEU) and to Communication C(2021) 8481 should be allowed in all categories of regions. Furthermore, operations contributing to an IPCEI approved by the Commission should benefit from simplified selection procedures.

(10) Affordable housing is another challenge that has come to the forefront due to the significant increase in prices and rents in recent years. With a view to incentivising Member States and regions to double investments from the ERDF and the Cohesion Fund, within their respective scopes, in the construction and renovation of the affordable housing stock, including social housing, new specific objectives should be created under different policy objectives to provide flexibility for the programming of housing interventions under dedicated priorities. Such priorities should entail the possibility to apply a Union co-financing rate of up to 100% and benefit from an additional one-off pre-financing of 30% of the amounts programmed in order to alleviate the burden on public budgets. For example, investments under the ‘New European Bauhaus’ initiative should make full use of those new possibilities. Costs resulting from the temporary renting of alternative accommodation for the occupants during the time of the renovation may also be entitled to support under such priorities, as well as costs of reforms related to housing, such as preparatory work for improvements in housing market regulation and permitting at local and city level. It is also appropriate to clarify the support of the JTF in that context.

(11) Water has a vital role as a resource for the security of food, energy and economic systems. This is also a key aspect of ensuring climate resilience. Given the challenges posed by the impact of climate change on water resources, further investments in water resilience should be encouraged. It is urgent to enhance the implementation of the water and marine protection legislation and improve water efficiency, address water scarcity, and progress towards a water resilient Europe. This requires important investments. It is therefore appropriate to include a reference to secure access to water, sustainable water management and water resilience in the new specific objective under policy objective 2 to allow for proactive, risk-based management and increased preparedness. Dedicated priorities established for that specific objective should also benefit from an additional one-off pre-financing of 30% of the amounts programmed and the possibility of a co-financing rate of up to 100% in order to incentivise crucial investments in that field.

(12) Finally, in order to enhance the effectiveness of investments, it is important to allow for the payment of costs related to the implementation of reforms, also where such costs are not directly linked to the implementation of investments.

(13) In order to enable Member States to carry out a meaningful reprogramming in the context of the mid-term review and focus resources on those new strategic Union priorities, additional restrictions should be lifted. As regards thematic concentration requirements, it is appropriate to allow Member States to count amounts programmed for new strategic priorities, including those contributing to STEP objectives, towards the amounts required to ensure compliance with thematic concentration requirements. This should be accompanied with some flexibility regarding the calculation of the respective climate contribution for the ERDF and the Cohesion Fund as set out in Article 6 of Regulation (EU) 2021/1060, while respecting the overall requirements of that Article. In addition, to accelerate the decarbonisation of industry that is necessary for reaching the Union’s climate objectives, it is necessary to provide for the possibility to finance, through the ERDF, investments aimed at achieving the reduction of greenhouse gas emissions also from activities listed in Annex I to Directive 2003/87/EC of the European Parliament and of the Council ⁶ provided that they have been awarded a Seal Excellence. Similarly, as regards the JTF, the conditions for financing such investments should be simplified. Furthermore, in order to ensure consistency of support between financing granted under direct and shared management, operations that have already been assessed in the context of directly managed programmes and been attributed a ‘Sovereignty Seal’ as defined in Article 4(1) of Regulation (EU) 2024/795 in a call for proposals under Commission Delegated Regulation (EU) 2019/856 by the Commission should not be subject to the fossil fuel exclusion. Member States should also be given the possibility to contribute resources from the ERDF and the Cohesion Fund to the Member State compartment of the InvestEU Fund ⁷ to deploy them through the InvestEU financial instrument set out in [Article 10a of Regulation (EU) 2021/523]. Finally, in order to allow for a comprehensive reprogramming towards the new strategic priorities in the context of the mid-term review, Member States should benefit from additional time to complement the assessment of the outcome of the mid-term review and the submission of related programme amendments. This should also apply to JTF resources where they are included in a programme together with ERDF or Cohesion Fund resources.

(14) In order to accelerate the implementation of cohesion policy programmes more generally and inject the necessary liquidity for key investments to be implemented, an additional one-off pre-financing for the ERDF and the Cohesion Fund should be paid for programmes under both the Investment for jobs and growth goal and under European territorial cooperation goal (Interreg), when the reprogramming concerns a substantial share of the overall programme. The pre-financing percentage should be further increased for certain programmes under the Investment for jobs and growth goal covering one or more NUTS2 regions bordering Russia, Belarus or Ukraine, given the adverse impact on those regions of the Russian war of aggression against Ukraine. In order to incentivise the re-programming towards key priorities in the context of the mid-term review, the additional pre-financing should only be available where a certain threshold for the reallocation of financial resources to specific crucial priorities is reached in that context.

(15) Furthermore, to take account of the time needed to refocus investments in the context of the mid-term review and allow best use of available resources, the deadlines for the eligibility of expenditure as well as decommitment rules should be adjusted for programmes carrying out a reallocation of resources to strategic priorities in the context of the mid-term review exercise. It should also be possible to apply a maximum co-financing rate of up to 100% to priorities in programmes under the Investment for jobs and growth goal covering one or more NUTS2 regions bordering Russia, Belarus or Ukraine, given the adverse impact on those regions of the Russian war of aggression against Ukraine.

(16) The mid-term review should also be used to reinforce the crucial role of cities in delivering many Union objectives by giving Member States the possibility to reallocate financial resources from the ERDF to reinforce the European Urban Initiative referred to in Article 12 of Regulation (EU) 2021/1058. In addition, in order to facilitate the uptake of key innovative actions identified under the European Urban Initiative, such actions should benefit from a simplified selection procedure for support under cohesion policy programmes. Member States should also be provided with the possibility to reallocate ERDF resources from their programmes under the Investment for jobs and growth goal to the Interregional Innovation Investment Instrument referred to in Article 13 of Regulation (EU) 2021/1058 to enhance flexibility in the use of resources.

(17) In order to simplify delivery and accelerate investments, it is appropriate to make additional targeted changes to the regulatory framework governing the use of the JTF. In particular, the possibility for a simplified selection procedure for operations that have been attributed a Seal of Excellence should be extended to the JTF. Furthermore, the limitations for the revision of targets should be removed in order to provide for the necessary flexibility in the context of changing implementation circumstances.

(18) Since the objective of this Regulation, namely to refocus investments on critical priorities in the context of the mid-term review and to simplify and accelerate policy delivery by amending Regulations (EU) 2021/1058 and (EU) 2021/1056 cannot be sufficiently achieved by the Member States but can rather be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

(19) Regulations (EU) 2021/1058 and (EU) 2021/1056 should therefore be amended accordingly.

(20) Given the urgent need to enable crucial investments notably in defence capabilities in the context of pressing geopolitical challenges, this Regulation should enter into force on the day following that of its publication in the Official Journal of the European Union.