Today, Member States backed the EU Budget (MFF) Performance Regulation, sending a positive signal for stronger climate and environmental spending, by defining a horizontal framework for how such spending is tracked and applying environmental safeguards across the budget.
Remaining loopholes, however, may still allow EU funds to be spent on projects that do not genuinely support climate and nature goals. WWF has consistently called for a credible rulebook that ensures EU funds genuinely support climate and biodiversity objectives.
The Performance Regulation agreed on today will provide a single set of rules for tracking climate and environmental spending, as well as for performance reporting in the new EU budget. It also includes a target for 35% of overall spending to support climate and environmental objectives. However, Member States did not tighten the rules for what counts as climate spending, leaving loopholes that risk greenwashing.
“EU Member States may have endorsed the Commission’s overall approach of prioritising climate spending in the next EU budget, but greenwashing remains a serious threat, eroding citizens’ trust in how EU funds are being spent. Unless the rules for what qualifies as climate spending are fixed, the EU’s climate budget will continue to fund airport expansions, mining projects, and road infrastructure,” said Carl Richter, EU Budget and Public Finance Policy Officer at WWF EU.
The Council also maintained strong support for the ‘Do no significant harm’ (DNSH) principle, a key safeguard aimed at phasing out spending on environmentally harmful activities, but introduced new exemptions for areas such as migration and border management, risking weakening its effectiveness. Additionally, the requirement to clearly define the harmful activities that should not be funded by the EU Budget has been dropped, creating further uncertainty around its application.
“The ‘Do no significant harm’ principle is only as strong as its application,” added Carl Richter. “By carving out parts of the budget and removing clarity on what should not be funded, Member States are weakening its impact. This creates unnecessary regulatory uncertainty and misses a clear opportunity to prevent EU funds from flowing to polluting activities.”
The European Parliament must now strengthen the framework by closing the remaining loopholes in how climate spending is counted and ensuring the robust application of the DNSH principle across the EU Budget. Parliament is expected to adopt its position at the earliest by the end of 2026, before trilogue negotiations begin.
