MFF Watch 2028–2034

As the EU institutions and Member States dive into negotiations over the next long-term budget - the EU 2028–2034 Multi-annual Financial Framework (MFF) - we are kicking off a special series exploring what's at stake.

From healthcare and digital to defence, green innovation and skills, we'll unpack how the new funding cycle will shape Europe's priorities and open fresh opportunities for innovators, industry and the public sector.

Our goal: to help our clients and our extended community understand where EU money will flow, position early and engage in shaping the next chapter of EU's investment agenda.

This week, we dive into green transition:

Funding signals for Europe's Green Industrial Policy between 2028 and 2034

In recent years, the European Commission has paid much closer attention to the health of its various industries, building dedicated sectoral support frameworks, such as the Net Zero Industry Act, Chips Act, Critical Medicines Act, Critical Raw Materials Act, and working on several other sectoral initiatives to further consolidate economic sectors that are considered vital for Europe's economic security. Until very recently, these initiatives lacked the direct financial firepower to support the many investment needs into product development, production ramp-up, decarbonisation of existing operations, energy costs and transitions.

To answer this imbalance, Europe's next Multiannual Financial Framework (MFF) is shaping its entire funding architecture around green industry, clean technologies, lead markets and green regions and cities. The drive to rebuild value chains for hydrogen, EVs, batteries, heat pumps, wind and solar, and to create viable markets for clean industrial products such as low-carbon cement and steel, is no longer a collection of sectoral initiatives. These priorities now form the backbone of the EU's green investment strategy for the coming decade.

Building on this shift, the European Commission's proposal for the 2028–2034 MFF earmarks at least 35% of the EU budget for climate and environmental objectives, with top-ups through additional funding instruments such as the Innovation Fund. This green-industrial focus is embedded across all major instruments: from flagship programmes such as the European Competitiveness Fund (ECF) and the next framework programme for research (FP10), to the Connecting Europe Facility (CEF), and the National and Regional Partnership Plans (NRPPs) that will guide investment at regional, city and industrial levels. 

A funding architecture built around clean competitiveness

Reading between the lines of the numerous policy initiatives, Europe is placing its bet on innovation and sustainability as unique differentiators of European products on a global market. In a global context betting on low prices or dominant positions, Europe wants to compete through high-added value products and technologies. As a result, the next MFF places clean technology and industrial decarbonisation at the centre of every major programme. Instead of treating sustainability as a separate theme, the Commission is using funding to steer how Europe's regions transition to sustainability-focused economies and how Europe produces energy, manufactures industrial goods and develops regional infrastructure. In practice, this means:

• Research programmes will prioritise the development of technologies that strengthen Europe's clean-tech and industrial base
  
• Deployment and manufacturing funds will support projects that scale net-zero production, roll out technologies and demonstrate ambitious decarbonisation in Europe
  
• National and regional plans will need to align investment pipelines with EU-level industrial and climate objectives
  

FP10: innovation targeting industrial leadership

While the FP10, the successor to Horizon Europe, retains flexibility to shift focus on emerging research areas and new technologies, a large portion of it – under its planned pillar II – will target new, more sustainable products and technologies, but also new methods of manufacturing clean products and technologies that are particularly well aligned with what the next research programme aims to fund. Research priorities are expected to include:

• low-carbon and energy-efficient industrial processes
• advanced manufacturing and digital-industrial integration
• next-generation solutions in hydrogen, renewables, carbon management and circularity
  

For clean-tech companies and industrial innovators, FP10 offers a clearer route from early-stage development to large-scale demonstration, with stronger support for cross-border projects and technology validation.

The European Competitiveness Fund: deployment, scale and strategic projects

Recognising that the current MFF has a limited mandate to support both production ramp-up and emerging strategic priorities, the European Commission is proposing a new instrument – the European Competitiveness Fund (ECF) – to fill that void. Also dubbed "the Draghi Fund", the ECF is meant to provide razor-sharp support to critical economic sectors. Structured in four thematic windows, its dedicated €26 billion Clean Transition and Industrial Decarbonisation window will absorb the scope of the current LIFE programme, which focused on demonstration and piloting of close-to-market solutions, and expand beyond that by supporting market-ready technologies and their deployment across both the public and private sectors. 

Funding is expected to support:

• renewable energy, clean heating and cooling systems, smart grids, sustainable fuels and energy storage technologies
  
• industrial decarbonisation and circular economy solutions, scaling up manufacturing of next generation clean tech and advanced materials
  
• complementary support will also target sustainable mobility systems, building renovation and climate resilience measures, alongside skills development through NZIA Academies to ensure the workforce has the required skills and competencies needed to drive the transition
  
• industrial capacity and supply-chain autonomy in clean technologies, including batteries, hydrogen, renewables, carbon capture and advanced materials
  

Under the ECF, one of the most attractive engagement routes for industrial companies will be the possibility to leverage the Strategic Project status under the Net Zero Industry Act, the Critical Raw Materials Act, the Circular Economy Act or green IPCEIs to obtain financing. This designation – absent before the current ECF proposal – opens the door to direct awarding of EU financing, faster procedures and, in some cases, the ability to move ahead without traditional competitive calls.

Looking beyond MFF support: the Innovation Fund as decarbonisation and cleantech champion

Building on its reputation as one of Europe's strongest financing instruments, the Innovation Fund will continue to operate as a separate, dedicated fund – complementing the MFF budget – to accelerate industrial decarbonisation in the EU Emissions Trading System (ETS) sectors and the scale-up of next-generation cleantech. While closely aligned with the European Competitiveness Fund's Clean Transition and Industrial Decarbonisation window, it maintains its own budget and mandate.

Entirely financed through revenues from the EU ETS, the Innovation Fund functions as the incentive to decarbonise that complements the EU ETS obligations. The Fund supports the demonstration and deployment of innovative technologies capable of cutting emissions in hard-to-abate sectors such as cement, steel, ceramics, paper and many others. Its scope includes demonstration projects focused on hydrogen, carbon capture and storage, clean fuels, energy-efficient industrial processes, and renewable energy solutions. 

The Innovation Fund consistently attracts interest from industry, with each annual submission cycle strongly oversubscribing its available budget, demonstrating that the private continues to have a strong appetite to decarbonise and that the funding offered is particularly attractive.

The Innovation Fund has also taken on the role of primary support for the expansion of net-zero manufacturing capacities identified as strategic under the Net Zero Industry Act. Through its cleantech window, as well as through sector-dedicated windows, such as for batteries, the Innovation Fund specifically targets the ramp-up of production in critical technologies. For industrial actors and technology developers, it remains one of the most powerful instruments to finance breakthrough projects and bring transformative solutions to market.

Complementing the goal and scope of the Innovation Fund, we expect that both the Modernisation Fund – focusing on 13 Member States looking to transform their energy sectors – and the new Social Climate Fund – focusing on making sure the energy transition does not negatively affect consumers throughout the EU, will bring additional funds to be spent at country level.

National and Regional Partnership Plans: country-level strategies

The new MFF proposal introduces a substantial climate-focused investment layer through Member States' National and Regional Partnership Plans (NRPPs). Valued at approximately €865 billion, these plans will be jointly designed by national governments and the Commission. They will integrate energy and climate objectives, industrial strategies and social transition measures, with at least 43% of funding dedicated to these priorities.

Although Member States will have a broad set of investment areas to choose from, each NRPP will ultimately reflect national, regional and local priorities. Designed to operate alongside EU-level programmes, the NRPPs can effectively mirror the objectives and funding logic of FP10, the ECF or the Innovation Fund at territorial level, but only where industry and public authorities make a strong case for alignment.

For industries and local authorities, this creates a dual opportunity:

1. EU-level programmes, which are highly competitive but offer scale, recognition as an EU industrial champion and cross-border partnerships
   
2. National-level envelopes, which may be divided into regional or thematic plans tailored to Member States' priorities; these are often more accessible for SMEs and offer significant potential to complement funding under the EU-level programmes for regionally important projects run by cities, regions or private organisations.
   

Understanding how these two layers interact and where they can reinforce each other, will be essential to securing funding in the next cycle.

Why is this important for you - and why now?

The proposed MFF gives substance to many sectoral frameworks and reshapes how clean industry and climate-aligned investment will be organised and accessed. Funding for hydrogen, batteries, heat pumps, renewables, circular manufacturing, advanced materials and low-carbon industrial processes will no longer sit in separate programmes: they will be integrated across FP10, the ECF, the Innovation Fund, CEF and national NRPPs. This integration means that funding logic, eligibility expectations and co-financing models are being rewritten in real time.

For industrial companies, clean-tech innovators and public authorities, the next 18 months are critical. Negotiations through 2025–2027 will set the rules, priorities and governance of the new instruments. Those who engage early will help shape the framework; those who wait will only react to it.

Acting now means:

• Understanding and influencing the new funding architecture at EU and national level before criteria and priorities are locked in.
• Structuring projects that match the new MFF logic, from FP10 research to ECF deployment and NRPP regional investment.
• Preparing initiatives that can qualify as Strategic Projects, securing a pathway to direct EU funding for execution.
• Supporting regions, cities and public-sector actors in building project pipelines that align with NRPP expectations and integrate clean mobility, energy, industrial transition and climate resilience.
  

In short, this is the window in which access rules are still being shaped. Once the framework is finalised in 2027, opportunities will narrow to stakeholders and entities who are already positioned inside Europe's new green-industrial investment ecosystem.

How we can help

For more than thirty-five years, we have helped clients navigate Europe's evolving industrial and funding landscape, supporting them through every MFF cycle. Our team understands how industrial policy is gaining prominence, and we translate that insight into concrete strategies that anticipate market shifts and position projects for success.

We know how to read between the lines of EU and national decision-making, and we understand which levers matter when programmes, priorities and funding conditions are being shaped. Our experience spans the full spectrum of instruments, from FP10 to the Innovation Fund, CEF and national programmes, as well as the policy frameworks that underpin them.

Whether you are preparing investments, scaling clean technologies or shaping regional or national funding strategies, we can help you leverage the next MFF to advance your objectives.Let's work together to secure your position in Europe's next green-industrial investment cycle.