European Regional Development and Cohesion Funds (2021–2027)

 

SUMMARY OF:

Regulation (EU) 2021/1058 on the European Regional Development Fund and on the Cohesion Fund

WHAT IS THE AIM OF THE REGULATION?

Regulation (EU) 2021/1058 sets out the scope and aims of two cohesion policy funds: the European Regional Development Fund (ERDF) and the Cohesion Fund.

These help the European Union (EU) Member States to achieve the goals for investment in jobs and growth and European territorial cooperation that are outlined in Regulation (EU) 2021/1060 (see summary).

Regulation (EU) 2024/795 (see summary), which sets up the strategic technologies for Europe platform (STEP), amends Regulation (EU) 2021/1058 expanding the specific objectives of the ERDF and the Cohesion Fund to include support for investments contributing to the objectives of STEP.

KEY POINTS

ERDF and Cohesion Fund tasks

The ERDF and the Cohesion Fund contribute to the overall objective of strengthening the EU’s economic, social and territorial cohesion.

• The ERDF contributes to reducing disparities between the levels of development of the various EU regions, including by promoting sustainable development and addressing environmental challenges.
• The Cohesion Fund contributes to environmental and trans-European transport network infrastructure projects. It provides support to Member States with a gross national income per capita of below 90% of the EU-27 average.

ERDF and Cohesion Fund policy objectives:

• a more competitive and smarter Europe, by promoting innovative and smart economic transformation and regional information and communications technology connectivity;
• a greener, low-carbon transition towards a net-zero-carbon economy and a resilient Europe, by promoting:
  • a clean and fair energy transition,
  • green and blue investment,
  • the circular economy,
  • climate change mitigation and adaptation,
  • risk prevention and management,
  • sustainable urban mobility;
• a more connected Europe, by enhancing mobility;
• a more social and inclusive Europe, by implementing the European Pillar of Social Rights;
• a Europe closer to citizens, by fostering the sustainable and integrated development of all types of territories and local initiatives.

The ERDF supports investment in:

• infrastructure;
• applied research and innovation;
• access to services;
• small and medium-sized enterprise (SME) business activities, particularly to safeguard and create jobs;
• equipment, software and intangible assets;
• networking, cooperation, exchange of experience and innovation clusters;
• information, communication and studies;
• technical assistance.

The total ERDF resources in each Member State, other than for technical assistance, are concentrated at the national level or the regional level. The thematic concentration levels are based on three categories of regions and Member States and focus on the first two policy objectives.

The Cohesion Fund supports investment in:

• the environment, including sustainable development and energy with environmental benefits, particularly renewable energy;
• the trans-European transport network;
• technical assistance;
• information, communication and studies.

Amending Regulation (EU) 2024/795 sets up the STEP initiative, which is designed to support projects that develop or manufacture critical technologies and strengthen their value chains in strategic sectors in which the EU needs to ensure its sovereignty and security. These sectors include digital technologies and deep tech innovation, clean and resource-efficient technologies, and biotechnologies, including medicinal products.

The amending regulation adds new specific objectives for the ERDF and the Cohesion Fund and, while preserving a focus on SMEs, permits support for productive investments in enterprises other than SMEs that could make a significant contribution to the development of less-developed and transition regions, and in more-developed regions of Member States with a gross domestic product per head below the EU-27 average.

Exclusions

The ERDF and the Cohesion Fund do not support:

• the decommissioning or building of nuclear power stations;
• investment in reducing greenhouse gas emissions from activities such as oil refining, steel-making, glass-making and other industrial processes;
• tobacco products;
• companies in difficulty, except in exceptional circumstances;
• airport infrastructure, except for environmental impact mitigation or security, safety and air traffic management system security in particular circumstances;
• waste disposal in landfills, except:
  • in the outermost regions, where justified,
  • for decommissioning, reconverting or making safe existing landfills;
• increasing residual waste treatment capacity, except:
  • in the outermost regions,
  • for technologies to recover materials from residual waste for circular economy purposes;
• fossil fuels.

However, they do support:

• investment in replacing solid-fossil-fuel-fired heating systems with gas-fired heating systems to upgrade district heating and cooling systems or combined heat and power installations;
• investment in natural gas-fired systems in housing and buildings to replace coal-fired or similar installations;
• investment in expanding and repurposing, converting or retrofitting gas transmission and distribution networks – provided that these are being prepared for renewable and low-carbon gases, such as hydrogen, biomethane and synthesis gas – to allow them to replace solid-fossil-fuel installations,
• investment in clean vehicles for public purposes and vehicles, aircraft and vessels used by civil protection and fire services.

ERDF support for territorial and interregional innovation investments

This includes the following:

• integrated territorial development;
• support for disadvantaged areas, in particular:
  • rural areas,
  • areas suffering from severe natural or demographic handicaps;
• at least 8% of the ERDF resources at the national level under the investment for jobs and growth goal, other than for technical assistance, are allocated to sustainable urban development, with special attention being paid to:
  • tackling environmental and climate challenges,
  • the transition towards a climate-neutral economy by 2050,
  • harnessing the potential of digital technologies for innovation purposes,
  • supporting the development of functional urban areas;
• the European urban initiative, implemented by the European Commission and supporting sustainable urban development through:
  • innovative actions,
  • capacity building and knowledge building,
  • territorial impact assessments,
  • policy development and communication;
• the interregional innovation investments initiative, consisting of financial and advisory support for:
  • investments in interregional innovation projects in shared smart specialisation areas,
  • capacity building to develop value chains in less-developed regions;
• the outermost regions, to offset additional costs resulting from:
  • remoteness, insularity and small size,
  • difficult topography and climate,
  • economic dependence on only a few products.

Implementing acts

In July 2021, the Commission adopted two implementing decisions.

• Implementing Decision (EU) 2021/1130 setting out the list of regions eligible for funding from the ERDF and the European Social Fund Plus, and of the Member States eligible for funding from the Cohesion Fund for the 2021–2027 period.
• Implementing Decision (EU) 2021/1131 setting out the annual breakdowns:
  • by Member State of global resources for the ERDF, the European Social Fund Plus and the Cohesion Fund under the investment for jobs and growth and ‘European territorial cooperation’ goals;
  • by Member State per category of region;
  • by Member State allocated to additional funding for the outermost regions;
  • of the amounts to be transferred from each Member State’s Cohesion Fund allocation to the Connecting Europe Facility;
  • of global resources for the European urban initiative;
  • of global resources for transnational cooperation supporting innovative solutions;
  • of global resources for the Interregional Innovation Investments Instrument;
  • of global resources for the cross-border cooperation strand of the European territorial cooperation goal;
  • by Member State of global resources for the transnational cooperation strand of the European territorial cooperation goal;
  • of global resources for the interregional cooperation strand of the European territorial cooperation goal;
  • of global resources for the outermost regions cooperation strand of the European territorial cooperation goal for the 2021–2027 period.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 1 July 2021.

BACKGROUND

For more information, see:

• New cohesion policy (European Commission)
• European Regional Development Fund (European Commission)
• Cohesion Fund (European Commission).

MAIN DOCUMENT

Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund (OJ L 231, 30.6.2021, pp. 60–93).

Successive amendments to Regulation (EU) 2021/1058 have been incorporated into the original text. This consolidated version is of documentary value only.

RELATED DOCUMENTS

Regulation (EU) 2021/1059 of the European Parliament and of the Council of 24 June 2021 on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments (OJ L 231, 30.6.2021, pp. 94–158).

Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (OJ L 231, 30.6.2021, pp. 159–706).

See consolidated version.

Commission Implementing Decision (EU) 2021/1130 of 5 July 2021 setting out the list of regions eligible for funding from the European Regional Development Fund and the European Social Fund Plus and of Member States eligible for funding from the Cohesion Fund for the period 2021–2027 (OJ L 244, 9.7.2021, pp. 10–20).

Commission Implementing Decision (EU) 2021/1131 of 5 July 2021 setting out the annual breakdown by Member State of global resources for the European Regional Development Fund, the European Social Fund Plus and the Cohesion Fund under the Investment for jobs and growth goal and the European territorial cooperation goal, the annual breakdown by Member State per category of region, the annual breakdown by Member State allocated to additional funding for outermost regions, the amounts to be transferred from each Member State’s Cohesion Fund allocation to the Connecting Europe Facility, the annual breakdown of global resources for the European Urban Initiative, the annual breakdown of global resources for transnational cooperation supporting innovative solutions, the annual breakdown of global resources for the Interregional Innovation Investments, the annual breakdown of global resources for the cross-border cooperation strand of the European territorial cooperation goal, the annual breakdown by Member State of global resources for the transnational cooperation strand of the European territorial cooperation goal, the annual breakdown of global resources for the interregional cooperation strand of the European territorial cooperation goal and the annual breakdown of global resources for the outermost regions cooperation strand of the European territorial cooperation goal for the period 2021-2027 (OJ L 244, 9.7.2021, pp. 21–50).

Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, pp. 13–43).

last update 09.10.2024