'Unreliable': EU overstated spending on climate action, audit report finds

'Unreliable': EU overstated spending on climate action, audit report finds
For agricultural funding, the climate spending is overstated the most, by almost €60 billion. Credit: Belga

The European Union has been misleading in reporting about achieving its self-imposed target of spending at least one-fifth of its 2014-2020 budget on climate action, according to a special report by the European Court of Auditors (ECA).

Although the EU Commission stated that the intended level of ambition had been achieved and that it had spent €216 billion on climate action, the climate-related expenditure was actually around 13% of the total budget, according to the ECA report published on Monday. "Thus, climate spending was overestimated by at least €72 billion."

“Addressing climate change is a key priority for the EU, which has set itself challenging climate and energy objectives," Joëlle Elvinger, the ECA member who led the audit, said.

The EU agency found that some of the reported spending was not always relevant to climate action. "That is why we make several recommendations to better link the EU’s expenditure to its climate and energy objectives. For instance, we recommend that the Commission should justify the climate relevance of agricultural funding."

Unreliable information

The ECA said the Commission's reporting on how the budget was utilised was based on assumptions that did not take into account the final contribution made towards EU climate goals. "The reporting on climate spending is beset with weaknesses, which make it generally unreliable," the auditors stated.

This was particularly true when it came to the EU public spending programmes for agriculture, infrastructure and cohesion, in which the potential negative effects or the actual impact on the climate were not taken into account.

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For example, the Commission reported that 26% of the agricultural funding was climate-relevant, however, farm greenhouse gas emissions in the EU have not decreased since 2010. The impact of this was not taken into account in calculations.

Commission response

In response to the report, the Commission stated that it "has invested substantial resources into developing a sound methodology," and that while reportings remain an approximation, it does not share the ECA's view that its climate reporting is unreliable.

"Many of the features identified as weaknesses by the ECA are necessary features of a methodology that aggregates expenditure across different programmes, implemented over different time horizons and through different management modes," its statement read.

Meanwhile, the ECA fears that these reliability issues could remain in the Commission's reporting for the 2021-2027 period when the EU’s new climate spending target is set to rise to 30%. There is also a risk that the planned or committed amounts may not be spent, which could further inflate reported climate spending.

In light of the findings, the auditors reviewed expected changes in tracking climate spending after 2020 — for example, that economic activities should not threaten environmental or climate objectives — to help the Commission improve future reporting on climate spending.

The findings in the new audit are compatible to previous ECA reports. In a review report in 2020, ECA wrote that it could not confirm whether the target of spending 20 % of the EU budget on climate action during the 2014 – 2020 budget period will be met. The review focused on the reliability of the methodology used for tracking climate spending in the EU budget.

An audit report from 2019 delivered scathing critique of how the EU institutions report on United Nations´ Sustainable Development Goals. According to the auditors the EU hardly reports on sustainability, despite a legal requirement to do so, because the building blocks for meaningful reporting are largely not yet in place.

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