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EU billions destined to transform the carbon-intensive, inefficient energy systems of central and eastern Europe are being misspent, finds a new report today by CEE Bankwatch Network and Friends of the Earth Europe. Bad spending plans and a lack of climate commitments from nine central and eastern European governments is hampering Europe's transition away from fossil fuels, the groups say.

The new research reveals that in CEE countries only 7 per cent of the 178 billion euros in European Regional Development and Cohesion Funds will be invested into renewables, energy efficiency and SMART grids, and that the integration of climate considerations into all plans and projects – as required under EU law – remains superficial.

Markus Trilling, EU funds campaigner for CEE Bankwatch Network and Friends of the Earth Europe said: "Whatever happened at the climate talks in Paris, Poland is still all about coal. We're seeing EU funds being spent across Central and Eastern Europe for coal, gas and dated transport systems – locking countries into fossil-fuel dependency, at the expense of renewables and energy efficiency."

The European Commission asked member states to concentrate EU funding on climate action and climate mainstreaming within the EU's seven year, one trillion euro budget for 2014 to 2020.

The report lays the blame squarely on the insufficient spending plans and absent climate commitments of the countries receiving the funding. For example, both Poland and the Czech Republic will offer financial support for the replacement of 'old coal boilers' with 'modern coal boilers' under the heading of environmental protection.

Estonia will retain carbon-intensive oil shale as its major energy source; Croatia and Estonia have received support for airport extensions – usually excluded from EU funds. In Romania, a third of all the money received will be spent on the transport sector, without any integral climate considerations [3].

Markus Trilling continued: "This is really 'close your eyes and drive' spending. CEE countries are prioritising energy intensive transport and fossil fuels over solutions to climate change. Energy efficiency goals have been reduced to footnotes, and the potential for citizens to shape the energy sector – through innovative community-owned and managed renewables – has been side-lined."

The report includes a comprehensive set of recommendations for ensuring that EU funds contribute to Europe's energy transition in a meaningful way. This includes the use of the upcoming EU budget midterm review as an opportunity to align funding in CEE countries with European efforts to tackle climate change.

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