Highlights

• The coalition led by Poland is calling for an increase in the Modernisation Fund’s resources after 2030 to meet the growing challenges of the transition.
• This is the result of active diplomacy by the Ministry of Climate and Environment, which in recent weeks has coordinated the positions of 12 countries, building one of the broadest coalitions in the debate on the EU’s future climate framework.
• Poland is lobbying in Brussels for tens of billions, which will be of fundamental importance for the energy transition and for making Poland independent from imported fossil fuels over the next decade.

The Modernisation Fund’s budget is derived from the sale of CO₂ emission allowances under the ETS system, and its allocation amongst Member States is based on solidarity criteria such as GDP per capita and the needs for energy sector modernisation in countries with higher economic emissions. Poland is the fund’s largest beneficiary.

Since 2020, Poland has received a total of PLN 53.5 billion from the Modernisation Fund. This money is being channelled into the thermal modernisation of schools and hospitals, the replacement of heating systems, domestic energy storage, the modernisation of electricity grids, the installation of electric vehicle chargers, and the development of renewable energy and biogas.

In its current form, the Modernisation Fund will operate from 2021 to 2030, and its future will be determined by the forthcoming review of the ETS system. The coalition of 12 countries that has just been formed gives Poland a strong starting position in the forthcoming, broader debate on a comprehensive revision of the ETS, the draft of which the European Commission is due to present in July 2026. Poland advocates a far-reaching reform of the system, which will allow the ETS to be aligned with the needs of industrial policy and the competitiveness of the European economy, and will adapt the pace of emissions reductions to the current geopolitical situation and the actual speed of technological development.