This week, the European Commission presented its proposal for the EU’s next Multiannual Financial Framework (MFF), covering the 2028–2034 cycle. With a headline figure nearing €2 trillion in current prices, the budget promises a nominal increase – but also a structural redesign. By consolidating and simplifying funding streams, the Commission aims to make the EU’s long-term spending more agile, more strategic, and better aligned with Europe’s evolving priorities.
In this week’s Friday Feature, we unpack what the MFF is, explore what’s in the Commission’s new proposal, examine the implications for the electricity sector, and look at what happens next.
MFF: what are we talking about?
The Multiannual Financial Framework – MFF – is the EU’s long-term budget plan. It sets both the ceiling and direction of the Union’s spending across a seven-year period. The next MFF will run from 2028 to 2034 and will define how much the EU can spend, where the money goes, and which priorities get funded – or don’t.
Often overlooked outside Brussels, the MFF is not just a technical exercise. It’s the financial expression of the EU’s political ambition. From supporting Ukraine’s recovery and boosting industrial competitiveness to fighting climate change the MFF determines what the EU can do.
With crises stacking up and demands multiplying, the stakes for this MFF are particularly high. Von der Leyen herself framed it as a turning point, saying the current framework “was designed for a world that no longer exists.”
And that’s especially true when it comes to energy. The EU’s shift away from fossil fuels is no longer just a climate imperative – it’s a strategic one. In recent years, energy policy has become inseparable from questions of security, affordability, and industrial competitiveness. With the EU aiming for a 90% reduction in emissions by 2040, large investments are needed in clean generation, grids, storage, capacity mechanisms and innovation.
The MFF plays a key role in unlocking these investments. Not by covering the full bill, but by de-risking private capital injections, lowering costs, and signalling strategic intent. Instruments like the Connecting Europe Facility (CEF) have already demonstrated this by funding cross-border electricity interconnectors and smart grids.
What does the MFF bring for our sector?
The Commission’s proposal for the next Multiannual Financial Framework comes with a bold headline: €2 trillion budget to fund the EU’s priorities through 2034. Of that, €1.816 trillion is available for programmes (the remainder will go toward repaying the bloc’s post-Covid borrowing under NextGenerationEU).
But it’s not just about the number – it’s about what the budget is built to do.
The proposal radically streamlines EU programmes, hands more flexibility to member states, and concentrates firepower on a few strategic areas: eastern countries and Ukraine, digital technologies, defence, research, culture, and notably clean energy.
Among the standout figures on clean energy and grids:
- The Connecting Europe Facility Energy – the EU’s fund for cross-border infrastructure – would grow fivefold, from €6 billion to €30 billion, with investments targeted at interconnectors, distribution grids, offshore-grids, EV charging infrastructure and smart technologies.
- A new European Competitiveness Fund, worth €409 billion, would focus on industrial transformation. When combined with the €41 billion Innovation Fund – often considered alongside it due to its complementary goals – the total envelope reaches €450 billion, with 14% (approx. €67.4 billion) for clean tech and decarbonisation, including electricity grid upgrades, industrial electrification, and energy cost relief.
- And in response to growing uncertainty, a separate pot of €400 billion in crisis-response loans would be made available for emergencies – ranging from floods and climate shocks to future energy disruptions.
How do we feel about this?
Eurelectric broadly welcomes the Commission’s proposal, particularly its climate ambition and strengthened focus on infrastructure.
The headline pledge – dedicating at least 35% of the total budget to climate and environment – marks a significant step, translating to roughly €700 billion over the full cycle.
From the electricity sector’s perspective, three developments stand out:
- First is the recognition of clean transition and industrial decarbonisation as core strategic priorities. The proposed €67 billion in allocations through the European Competitiveness Fund and the Innovation Fund is a tangible boost. The fact that the Competitiveness Fund would consolidate 11 existing programmes – including CEF-Energy – is another positive move toward simplification and scale.
- Second, Eurelectric strongly supports the fivefold increase in the Connecting Europe Facility for Energy to €30 billion. This aligns with longstanding calls from our industry.
- Third, the Commission’s proposal also introduces National and Regional Partnership Plans (NRPPs) – a new mechanism to merge disparate funding channels and national programmes. Importantly, these plans would allow Member States to invest directly in distribution-level electricity networks, which is key to enabling smart, localised electrification.
However, words are not enough. And as negotiations move forward, it will be vital to ensure the MFF becomes a truly ambitious investment toolbox. To build the distribution grids required for the energy transition alone, Europe must mobilise €34-39 billion in additional DSO investments annually, on top of a historic average of €23 billion per year – bringing the total annual need to around €67 billion. But that’s just one piece of the puzzle. According to our decarbonisation speedways study, the total investment required to fully decarbonise the power system by 2050 amounts to €9,998 billion under the REPowerEU scenario, covering both generation assets and infrastructure. These figures reflect the scale of what’s at stake – and the importance of designing a budget capable of unlocking and derisking private capital at speed
What’s next?
This week’s proposal is just the opening chapter in what will likely be a long and complex book of negotiation. The Multiannual Financial Framework is adopted under a special legislative procedure: the Council must approve it unanimously, and the European Parliament must give its consent. While Parliament can’t amend the proposal, it can accept or reject it – and it’s likely to use that leverage to push for its own priorities.
In practice, that means months – if not years – of negotiations. Member States will debate the overall size of the budget, the balance between national flexibility and EU priorities, and the details of new instruments.
The Danish Presidency of the Council has signalled its intention to present a first compromise – known as the “nego-box” – before the EU summit in December. Few expect a final deal before 2026.
In the meantime, Eurelectric will continue engaging with co-legislators to ensure that the final MFF becomes a credible vehicle to deliver Europe’s decarbonisation, competitiveness, and energy security goals.
This blog post was originally published as part of Eurelectric’s LinkedIn Friday Features. Subscribe here to stay updated.
Disclaimer: This article is for communication purposes only and may not reflect Eurelectric positions. Any positions taken in this article shall not be attributable to Eurelectric’s official positioning. Official Eurelectric positions are reflected only in position papers published here.