EU budget plan would deal ‘devastating blow’ to nature

There’s a butterfly-shaped hole in Brussels’ plans for a new European budget structure.

The European Commission presented its controversial proposal to pool a number of existing funding programs into a single “Competitiveness Fund” last Wednesday, as part of a broader €1.816 trillion multiannual budget proposal that has angered EU countries and civil society groups alike. 

Under the new plan, biodiversity goals have no earmarked funding at all — and will have to compete with the EU’s other environmental aims, including climate change, water security, the circular economy and pollution.

Some warn that unless clearly allocated, money will inevitably flow to industrial projects that fit with the Commission’s competitiveness agenda, leaving unprofitable but no-less-urgent environmental programs unfunded.

“[There’s a] real danger that biodiversity will be sidelined in favour of industrial priorities that may be presented as green investments,” said Ester Asin, director of the WWF European Policy Office.

The EU is already facing an estimated €37 billion annual biodiversity funding gap, according to the Commission.

In the proposed new budget structure, Europe’s existing €5.45 billion environmental funding program, known as LIFE, would merge with other funds dedicated to digitalization and defense into a €409 billion competitiveness cash pot. Money previously earmarked specifically for biodiversity has also now been merged with a catch-all “environment and climate” target.  

The overall amount dedicated to funding green priorities will increase, the Commission argues, because 35 percent of the total budget — roughly €700 billion — will be dedicated to reaching the goals of the EU Green Deal.

Around 43 percent of the Competitiveness Fund will go toward climate and environmental objectives, the Commission said Wednesday, to contribute to this overarching target. 

“I think that this budget actually looks at it in a comprehensive way,” Environment Commissioner Jessika Roswall told POLITICO. “We have a lot of [environmental] legislations that are really good, but now we also need to give the results, and this budget is actually addressing exactly this.”

But not everyone is buying into the idea.

“This is a devastating blow for Europe’s nature and its citizens,” said Birdlife Europe’s Anouk Puymartin in a statement, warning that biodiversity is “losing its place in the EU budget with no dedicated funding or clear prioritisation.”

Embedding sustainability

With the new budget structure, the Commission wants environmental protection to be seen as a horizontal issue rather than a standalone financing priority. 

The structure will “ensure that horizontal priorities are applied in a consistent way across the EU budget, including for climate and biodiversity, the ‘do no significant harm’ principle, social policies and gender equality,” it writes in the budget document.

The “do no significant harm” principle dictates that EU policies and funds must not have a negative impact on the EU’s six environmental objectives, which include protecting and restoring nature.

“What matters now is how sustainability is embedded into the governance and structure of the EU budget,” said Cornelius Müller, policy officer for the Sustainable Banking Coalition, a green finance lobby. “The EU needs to hardwire these principles into all financial instruments.”

But some argue that conserving a nature-focused chunk of the financing is essential.

WWF’s Asin is calling for “robust and transparent tracking methodologies” — without which the 35 percent target risks “becoming little more than a PR exercise.”

In the current budget structure — on top of the 30 percent climate spending target — 7.5 percent of annual spending was to be allocated to biodiversity objectives in 2024, ramping up to 10 percent in 2026 and 2027. Under the new proposal, no target for biodiversity is stipulated.

There is also no ring-fenced cash specifically allocated to water resilience, one of Brussels’s core concerns according to its 2024-2029 priorities. Some of Europe’s most water-stressed member countries, such as Spain and Portugal, had been asking that more money be dedicated to water resilience and risk management.