Commission Implementing Regulation (EU) 2023/2606 of 22 November 2023 amending Implementing Regulation (EU) 2020/1001 laying down detailed rules for the application of Directive 2003/87/EC of the European Parliament and of the Council as regards the operation of the Modernisation Fund supporting investments to modernise the energy systems and to improve energy efficiency of certain Member States

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (1), and in particular Article 10d(12) thereof,

Whereas:

(1) Directive 2003/87/EC established a fund to support investments to modernise energy systems and improve energy efficiency in certain Member States (the ‘Modernisation Fund’). Commission Implementing Regulation (EU) 2020/1001 (2) lays down detailed rules on the operation of the Modernisation Fund.

(2) Directive (EU) 2023/959 of the European Parliament and the Council (3) amended Article 10d of Directive 2003/87/EC establishing the Modernisation Fund in a number of aspects. Among others, the scope of priority investments has been extended to infrastructure for zero-emission mobility, and support from the Modernisation Fund has been extended to Greece, Portugal and Slovenia. The detailed rules on the operation of the Modernisation Fund laid down in Implementing Regulation (EU) 2020/1001 should therefore be aligned with Directive 2003/87/EC, as amended by Directive (EU) 2023/959.

(3) Directive 2003/87/EC specifies which revenue from the Modernisation Fund can be used for investments involving gaseous fossil fuels. Furthermore, that Directive specifies which revenues are to be used in accordance with the ‘do no significant harm’ criteria set out in Article 17 of Regulation (EU) 2020/852 of the European Parliament and of the Council (4), where such revenues are used for an economic activity for which technical screening criteria for determining whether an economic activity causes significant harm to one or more relevant environmental objectives have been established pursuant to Article 10(3), point (b), of that Regulation. In order to ensure that these requirements are complied with, it is appropriate to lay down a distinction, in Implementing Regulation (EU) 2020/1001, between several categories and subcategories of revenues from the Modernisation Fund in the procedures for submitting and assessing investment proposals.

(4) To enhance sound financial management of the Modernisation Fund, projects for which the requested Modernisation Fund support exceeds EUR 70 000 000 (‘large-scale projects’), and which are therefore likely to be implemented over a longer period of time or in stages, should be subject to a staggered disbursement based on a schedule proposed by the beneficiary Member State. The rules on the first and subsequent disbursements that apply to schemes should apply to such large-scale projects. When requesting subsequent disbursements, the beneficiary Member State should provide information on the implementation of the large-scale project.

(5) To improve transparency of funding under the Modernisation Fund, the relevant stakeholders should be consulted on investment proposals concerning large-scale projects and schemes for which the total support requested exceeds EUR 100 000 000 (‘large-scale schemes’) before those projects and schemes are submitted to the European Investment Bank (the ‘EIB’) and to the Investment Committee. The beneficiary Member States should decide on the procedure for such consultation.

(6) In order to ensure efficient use of the Modernisation Fund resources for schemes which may involve a large number of small investments implemented over a period of several years, when requesting subsequent disbursements, the beneficiary Member State should provide information on the implementation of those schemes. Furthermore, to ensure that long-term schemes continue to meet the objectives of the Modernisation Fund, it is appropriate to limit their duration to maximum five years, following which the beneficiary Member State wishing to continue the scheme may submit a new investment proposal that should undergo a full assessment.

(7) In the interest of legal certainty for the schemes confirmed by the EIB or recommended for financing by the Investment Committee before 5 June 2023 (that is, before the date of entry into force of Directive (EU) 2023/959, which inserted Article 10f in Directive 2003/87/EC), it should be provided that subsequent disbursements for those schemes do not depend on the compliance of the scheme with Article 10f of Directive 2003/87/EC. On the other hand, disbursements for any investments confirmed by the EIB or recommended for financing by the Investment Committee on or after 5 June 2023 are to comply with Article 10f of Directive 2003/87/EC.

(8) To promote the efficient use of resources from the Modernisation Fund and avoid keeping them in investments that are not implemented, the rules applicable to discontinued investments should be improved. Investments should be deemed discontinued if, after a certain period of time, they have not led to a binding legal commitment between the Member State or the scheme managing authority and the final beneficiary of the Modernisation Fund resources or if no support has been awarded to the investment, unless the beneficiary Member State can demonstrate that the investment is being implemented.

(9) Rules governing the operation of the Investment Committee should be updated to reflect the extended membership of the Committee that includes representatives of new beneficiary Member States.

(10) To improve the coherence of investments financed under the Modernisation Fund and to ensure their contribution to the Union climate and energy objectives, the beneficiary Member States should send the overview of their planned investments at the same time as their annual report. The annual report should explain the relation between planned investments and the national energy and climate plans under Regulation (EU) 2018/1999 of the European Parliament and the Council (5). The relevant stakeholders should be consulted on the draft overview of the planned investments. The beneficiary Member States should decide on the procedure for such consultation.

(11) To improve the assessment of investment proposals and the monitoring of the implementation of ongoing investments, additional information on such proposals and investments should be provided. In particular, to provide comprehensive information on each investment’s decarbonisation potential, all investment proposals should include information on their greenhouse gas emission reduction potential and the related abatement costs. Moreover, overviews of planned investments and investment proposals should include information on whether the investment has been awarded a seal or any quality label provided by Union law after having been evaluated positively in a directly managed funding programme.

(12) Regulation (EU) 2020/1001 should therefore be amended accordingly.

(13) The measures provided for in this Regulation are in accordance with the opinion of the Climate Change Committee,

HAS ADOPTED THIS REGULATION:

Article 1

Amendments to Implementing Regulation (EU) 2020/1001

Implementing Regulation (EU) 2020/1001 is amended as follows:

(2) Article 3 is deleted;

(7) in Article 8, paragraph 2 is replaced by the following: ‘2.   The Commission shall notify the disbursement decision to the beneficiary Member State concerned and inform thereof the EIB, the Investment Committee and, where relevant, the non-beneficiary Member State in which the adjacent Union border region involved in the investment is located.’

(9) in Article 11, the following paragraphs are inserted: ‘3a.   Where an investment proposal is to be financed exclusively from the revenues generated from the auctioning of the allowances referred to in Article 10(1), third subparagraph of Directive 2003/87/EC or of the allowances transferred to the Modernisation Fund under Article 10d(4), of that Directive, the representatives of the beneficiary Member States entitled to deliberate and cast a vote shall be only those specified in Part A of Annex IIb to Directive 2003/87/EC. 3b.   Where an investment proposal involves an adjacent Union border region located in a non-beneficiary Member State which is represented in the Investment Committee, and the representative of the EIB does not endorse financing of that investment proposal, the representative of that non-beneficiary Member State shall not be entitled to cast a vote on the proposal.’

(10) in Article 12, paragraph 1 is replaced by the following: ‘1.   The EIB shall develop asset management guidelines to manage the revenues from the Modernisation Fund, to ensure that those revenues are managed in accordance with the objectives of Directive 2003/87/EC and the internal rules of the EIB.’

(12) the following Article is inserted: ‘Article 13a Monitoring and reporting by non-beneficiary Member States concerning investments involving the adjacent Union border regions Where the beneficiary Member State uses the resources allocated to it to finance investments involving the adjacent Union border region, the non-beneficiary Member State in which that region is located shall provide to the beneficiary Member State any information and documentary evidence that is necessary for the beneficiary Member State to comply with Article 13.’

(14) in Article 15(1), the second subparagraph is deleted;

(17) Annex I is replaced by the text set out in Annex I to this Regulation;

(18) Annex II is replaced by the text set out in Annex II to this Regulation;

(19) the text set out in Annex III to this Regulation is added as Annex III.

Article 2

Entry into force and application

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

It shall apply from 1 January 2024.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 22 November 2023.

For the Commission The President Ursula VON DER LEYEN

(1) OJ L 275, 25.10.2003, p. 32.

(2) Commission Implementing Regulation (EU) 2020/1001 of 9 July 2020 laying down detailed rules for the application of Directive 2003/87/EC of the European Parliament and of the Council as regards the operation of the Modernisation Fund supporting investments to modernise the energy systems and to improve energy efficiency of certain Member States (OJ L 221, 10.7.2020, p. 107).

(3) Directive (EU) 2023/959 of the European Parliament and of the Council of 10 May 2023 amending Directive 2003/87/EC establishing a system for greenhouse gas emission allowance trading within the Union and Decision (EU) 2015/1814 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading system (OJ L 130, 16.5.2023, p. 134).

(4) Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).

(5) Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ L 328 21.12.2018, p. 1).