Eastern and Central European countries are calling on the European Union to strengthen financial support for poorer member states, urging an expansion of the bloc’s carbon-funded mechanisms used to support the clean energy transition.
The push is focused on the EU’s Modernisation Fund, which is financed through revenues from the Emissions Trading System (ETS) and is designed to help lower-income member states modernise energy systems, improve efficiency, and reduce dependence on fossil fuels.
Countries including Poland, Bulgaria, Romania, Hungary, Slovakia, Estonia, Latvia, Lithuania, Croatia, Slovenia, Greece, and Czechia argue that current funding levels are insufficient to meet rising transition costs, especially as the EU tightens its climate targets and phases out free carbon allowances.
A joint position from the group emphasized the need for predictable and expanded financing, stating:
“Predictable financing mechanisms are essential to ensure a fair and effective energy transition across all member states.”
Joint statement from Eastern and Central European governments — as reported by Reuters, June 22, 2026
At the center of the debate is the growing cost of decarbonization. Many of these countries are more heavily reliant on fossil fuels and energy-intensive industries, meaning the transition requires larger upfront investments in infrastructure, grid modernization, and industrial upgrades.
The Modernisation Fund has already allocated more than €20 billion since 2021, supporting renewable energy projects, energy efficiency improvements, and emissions reduction initiatives across eligible countries. However, governments argue that this level of support will not be sufficient as the EU accelerates its 2040 climate ambitions.
The disagreement comes at a politically sensitive moment, as the European Commission prepares a broader overhaul of its carbon pricing framework. Some member states are pushing for stronger climate enforcement, while others are warning about rising industrial costs and economic competitiveness risks.
This tension highlights a core fault line within EU climate policy: how to balance rapid emissions reductions with equitable financial support across economically diverse member states.
Without stronger redistribution mechanisms, poorer regions warn that the transition risk becoming uneven, with industrial and energy burdens concentrated in already vulnerable economies.
Ultimately, the debate is not just about funding levels. It is about whether the EU’s climate transition can remain politically and economically unified as pressure to decarbonize intensifies.