[Publication] The future of transport in the context of the Recovery Plan: Overview briefing

The EU’s Recovery Plan, called the Next Generation EU (NGEU), consists of the Recovery and Resilience Facility (RRF), with an allocated sum of €723.8[2] billion in loans and grants, and several other smaller programmes, to which €83.1 billion have been allocated. The main focus of this report is the RRF, the centrepiece of the NGEU.

Based on the analysis of the RRF’s funding opportunities for transport, it is concluded that due to the broad formulation of the goals of the RRF, all EU priorities in the field of transport fall under the scope of the RRF. While this is true, due to the way the goals of the RRF and the funding requirements are defined, certain transport measures are more likely to be included in the National Recovery and Resilience Plans (NRRP) by the Member State than others. Transport measures most eligible for RRF funding are:

• Measures related to transport-specific challenges Member States are facing within the following topics:
  • Green transition;
  • Digital transformation;
  • Smart, sustainable and inclusive growth;
  • Social and territorial cohesion;
  • Health, and economic, social and institutional resilience;
  • Policies for the next generation.
• Measures related to the Country Specific Recommendations (CSR) for Member States in the field of transport, which are, in general, related to accelerating the use of low and zero-emission technologies in transport, the provision of renewable energy, and providing 5G coverage.
• Measures contributing to gender equality and equal opportunity for all.
• Measures that are coherent with other measures.
• Measures contributing to the 37% and 20% minimum expenditure target for investments in climate and digitalisation, respectively.

In addition, the measures must also meet certain requirements to be eligible for RRF funding. In particular:

• Measures need to be mature enough to define milestones and targets at the time of submission of the plan.
• Measures must be completed before August 2026.
• Measures must not significantly impair efforts in (i) climate change mitigation; (ii) climate change adaptation; (iii) sustainable use and protection of water and marine resources; (iv) the circular economy; (v) pollution prevention and control; and (vi) the protection and restoration of biodiversity and ecosystems.

While the broad formulation of the goals of the RRF allows Member States to develop more customised actions in areas where they see fit, at the same time, too little guidance may lead to certain transport priorities remaining unaddressed.

Reimbursement will take place based on the milestones achieved by the Member States and agreed with the EU in advance. As the last milestones are to be reached by August 2026, Member States may prefer to use already mature, fast and low-innovation measures to achieve results and milestones quickly, rather than opting for ambitious and riskier measures. The EU intends to keep track of the implementation of the RRF through the milestones and through a scoreboard system, which is yet to be developed.

As for the other programmes that fall under the NGEU, the following programmes are relevant for transport.

• Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU) and the Just Transition Fund (JTF) can be used for transport topics falling under the Cohesion policy, whereby the JTF specifically is for addressing climate issues.
• For Horizon Europe, €1.35 billion is added to the transport-relevant cluster ‘Climate, Energy and Mobility’.
• Additional funds for the InvestEU (€6.1 billion) programme can be used to finance riskier transport-related measures.

[2]       This and the following figures are in 2021 prices, derived from the EU’s 2021-2027 long-term Budget and Next Generation EU: Facts and Figures, https://op.europa.eu/en/publication-detail/-/publication/d3e77637-a963-11eb-9585-01aa75ed71a1/language-en