1.   Introduction

In the European Semester Spring Package 2026, the Commission outlined that Member States will have the opportunity to request the expansion in the scope of their existing National Escape Clause (NEC) for defence to include measures that strengthen the structural resilience of the European energy system and accelerate the transition away from fossil fuels (1) (henceforth, ‘energy security measures’). This reflects a recognition that Member States might face significant upfront fiscal costs in order to accelerate the implementation of measures that ensure Europe’s long-term energy security.

The attached note sets out in greater detail the Commission services’ view on how the NEC for defence expenditure could be broadened to accommodate energy security measures. The note emphasises that any measures benefiting from this flexibility must make a direct contribution to accelerating the energy transition, a principle reflected in both the scope and the eligibility criteria for the flexibility.

The note also explains how the broadened NEC will be integrated into the existing fiscal surveillance framework while safeguarding fiscal sustainability. By capping the scale of the overall flexibility under the NEC, the fiscal sustainability risks can be contained. In addition, the introduction of clearly defined and dedicated caps for energy security measures will help to strike an appropriate balance between support for energy-related investments and the flexibility already available for defence spending.

The note also sets out the procedure for requesting an extension of the NEC’s scope, as well as the Commission’s approach to monitoring the flexibility going forward.

2.   Definition of eligible energy measures

Scope of flexibility

The expanded scope of the NEC for defence will be limited to measures that strengthen the structural security and resilience of the European energy system and accelerate the transition away from fossil fuels  (2) . Eligible measures should be nationally financed with a direct budgetary impact. Eligible measures include supports for households and businesses to reduce their reliance on fossil fuels and promote decarbonisation, including measures that accelerate the electrification of end-use sectors, support investment in electricity grids, clean energy storage (e.g. batteries), energy saving and the capacity expansion of clean energy sources. The table below provides an illustrative and non-exhaustive list of potentially eligible measures. Member States could also consider the broader range of measures included in the AccelerateEU Communication  (3) and the Electrification Action Plan that are aligned with the eligibility criteria outlined in this note. Member States should explain how the measures contribute to strengthening European energy security and resilience. The Commission will assess the eligibility of measures on case-by-case basis.

Table 1

Illustrative and non-exhaustive list of measures to reduce dependence on fossil fuels and increase energy security

Target Group	Type of Measures
Households	Subsidies for geothermal and solar energy.
	Subsidies for residential energy storage systems.
	Subsidies to replace fossil fuel boilers with clean alternatives, such as heat pumps.
	Subsides for the investment in home EV charging infrastructure.
	Subsidies and/or reduced-interest loans for medium or deep residential building renovations (4).
Public Sector	Investments in on-site renewable energy generation and storage.
	Investments in medium or deep building renovations.
Businesses	Fiscal incentives for e-vehicle charging infrastructure.
	Subsidies and/or reduced-interest loans for medium or deep building renovations.
	Targeted financial incentives to increase the rate of deployment of industrial decarbonisation technologies as defined in Annex of Regulation (EU) 2024/1735 of the European Parliament and of the Council (5).
Transport Infrastructure	Public investment in EV charging infrastructure.
	Public investment in clean urban transport infrastructure and rolling stock such as trams and metros.
	Public investment in railway infrastructure and rolling stock.
Energy Sector	Investment in renewable energy projects, including electricity generation and heating
	Investment in battery and energy storage technologies.
	Investment in nuclear power plants.
	Investment in electricity grid infrastructure and technologies.
	Investment in technologies for the production of hydrogen by electrolysis, using renewable or low-carbon electricity (6).
	Investment in energy system-related energy efficiency technologies.
	Investment in sustainable renewable fuels.
	Two-way contracts for difference for clean energy generation.
	Investment to enhance physical and cyber security of energy systems (7).
(4)  Pursuant to Article 2(20) of Directive (EU) 2024/1275 on the energy performance of buildings, a ‘deep renovation’ means a renovation that transforms a building or building unit into a nearly zero-energy building. The concept of a ‘medium renovation’ is set out in paragraph 2.3.1.1 of Commission Recommendation (EU) 2019/786 on building renovation, requiring primary energy savings of at least 30 %. (5)  In particular, transformative industrial technologies for decarbonisation, heat pumps and geothermal energy technologies, hydrogen technologies, battery and energy storage technologies, carbon capture and carbon storage technologies, onshore wind and offshore renewable technologies, solar technologies, renewable fuels of non-biological origin and electricity grid technologies. (6)  This includes hydrogen infrastructure-related investments, provided that they remain focused on measures with clear, near-term value for the EU’s energy security or level of fossil fuel dependency. This may include, for example, existing Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs), as well as the repurposing of existing natural gas infrastructure for the exclusive use of hydrogen, whether or not such repurposing projects are themselves included in the Union list of PCIs or PMIs. (7)  Enhance the physical resilience of infrastructure, system adequacy and non-fossil flexibility, protection against cyber and hybrid threat, diversification of critical energy supply chains, resilience of strategic energy assets.

By contrast, measures with other aims, even if somewhat related to the Middle East crisis, will not be eligible for this flexibility. For example, reductions in excises or other taxes on fossil fuels, fixed prices, subsidies to fossil fuel, income-based supports or other subsidies aimed at mitigating the impact of high energy prices or measures which generate only indirect energy savings without delivering a structural improvement in the resilience of the European energy system, will fall outside the scope of the flexibility.

Additionality: Only new measures decided after 28 February 2026 are eligible

Only budgetary measures decided after 28 February will qualify for the flexibility. While Europe has already made significant progress in diversifying energy sources and increasing investment in renewable energy, it is important that the flexibility facilitates an acceleration of the transition away from fossil fuels, whose urgency has increased with the war in the Middle East. Accordingly, only policy measures decided after 28 February will be eligible under the extended scope of the NEC. A retroactive application, covering measures decided earlier, would not contribute to an acceleration of the energy transition and would instead simply create fiscal space for other purposes, therefore defeating the purpose of this flexibility.

The National Escape Clause remains in effect until 2028. After the period of the NEC for defence (post-2028), energy security measures that remain in place will need to be accommodated through a re-prioritisation within national budgets. The higher government deficits or debt levels as a result of the use of the flexibility will be taken into account when determining the requirements for the subsequent medium-term fiscal structural plans, and will necessitate additional fiscal adjustment in future years. Member States should therefore carefully assess the medium-term budgetary implications of measures that would lead to a deviation from the recommended expenditure path, even if those deviations are currently covered by the NEC.

Targeting and cost-effectiveness

Energy security measures under the flexibility should be designed to maximise impact and minimise the fiscal cost. Member States will be required to provide evidence that measures for which they request flexibility are targeted and cost-effective. For instance, by giving priority to those actions that support the energy transition for the most vulnerable households and businesses, including energy intensive businesses.

3.   Integration of the flexibility within fiscal surveillance

Three caps: overall, annual and cumulated for energy

Fiscal sustainability safeguards will remain fully in place. The existing cap on the flexibility, of up to 1,5 % of GDP in additional expenditure under the NEC for defence, will remain unchanged. While the scope of the flexibility may be broadened, the risk to fiscal sustainability, and the increase in fiscal adjustment in subsequent periods, will remain contained. It is also important that in broadening the scope of the NEC, the necessary reinforcement of European defence capacity is not crowded out. Dedicated caps on the annual and cumulative use of flexibility for energy security measures will help ensure that a balance is struck between the flexibility provided for energy-related measures and those available for defence expenditure.

Flexibility will be capped based on the fiscal cost of the measures. The overall 1,5 % of GDP cap under the NEC flexibility will continue to be assessed on the basis of Member States’ cumulative deviation from their net expenditure growth path. In addition, the caps on the flexibility for energy security measures will be applied to the total fiscal cost of eligible measures (8). In practice, this means that once the total fiscal cost of used flexibility, based on ex-post data, reaches the cumulative cap, no further flexibility for energy security measures will be available. Therefore, any additional measures should be accommodated through reductions in net expenditure elsewhere.

The cost of eligible energy security measures will be capped at 0,3 % of GDP annually and 0,6 % of GDP cumulative over the period 2026-2028. This should be interpreted as follows:

(i)	The maximum available flexibility from energy security measures in each year amounts to the budgetary costs of measures reported by the Member State and deemed eligible by the Commission for the purpose of the implementation of the NEC for that year, up to a maximum of 0,3 % of GDP.

(ii)

The maximum amount of used flexibility from energy security measures over the entire period 2026-2028 cannot exceed 0,6 % of GDP by end 2028 (9). For instance, if a Member State uses flexibility from energy security measures amounting to 0,3 % of GDP in 2026 and in 2027, the cumulative flexibility (0,6 % of GDP) would be fully utilised. Alternatively, a Member State could use 0,2 % of GDP of flexibility in each of the three years (2026-2028), or, 0,3 % of GDP in 2026, 0,2 % in 2027 and 0,1 % in 2028.

Member States approaching the 1,5 % of GDP cap on account of defence spending, will be able to request temporary and limited additional flexibility provided that fiscal sustainability is not at risk. In 2026, 2027 or 2028, a Member State may have already planned to use 1,2 % of GDP or more of the flexibility for an increase in defence expenditure (10). When such Member State also apply for flexibility for energy security measures (up to 0,3 % of GDP), the 1,5 % cap may be reached before the flexibility for energy security measures can be fully utilised. Member States faced with such circumstances could request for an exemption to exceed the 1,5 % of GDP cap, while duly taking into account the risks this poses to the sustainability of their public finances. In practice, such an exemption will imply additional fiscal adjustments in a subsequent plan, to which Members States should commit to ensure that fiscal sustainability is preserved over the medium term. Such consideration will be particularly relevant for those Member States currently being assessed at high fiscal sustainability risk (11). The dedicated annual (0,3 % of GDP) and cumulative (0,6 % of GDP) caps for energy security measures would still apply.

4.   Procedure to request the flexibility and monitoring

Requesting the broadening of the NEC for defence to include energy security

The decision to request a broadening in the scope of the NEC is at the discretion of each Member State and will need to be approved by the Council on a recommendation by the Commission  (12) . Member States are invited to come forward with their requests to extend the scope of the NEC by end-July/mid-August 2026 but later requests will also be considered. After assessing a request, in accordance with the requirements of Article 26 of Regulation 2024/1263, the Commission can recommend to the Council to approve it. The Commission recommendations could be ready in September, and Council adoption could take place at the ECOFIN meeting in October.

For Member States that request the NEC for the first time, the NEC flexibility will cover both defence spending and energy security measures, as two pillars of European security. As in the past, the Commission will assess all new requests received to ensure that the activation of the clause does not endanger fiscal sustainability over the medium term.

In their request, Member States are expected to provide an initial list of planned energy security measures which they would like to benefit from the flexibility, with their estimated budgetary cost. This information will serve to illustrate the intended strategy to increase energy security and allow a first gauge of the additionality of the measures and the longer-term fiscal implications. As further detailed below, the flexibility will be granted on the basis of ex post data.

Monitoring of the flexibility for energy security measures in fiscal surveillance

The operationalisation of the flexibility will require additional reporting from Member States, to allow the Commission to assess whether the measures fulfil the eligibility conditions. By contrast to the flexibility for defence expenditure, no established statistical category of expenditure within the European System of National and Regional Accounts (ESA) fully captures the range of eligible measures covered under the energy security flexibility. As a result, Member States seeking to broaden the scope of the NEC will be subject to enhanced reporting requirements. Member States will need to provide to the Commission sufficient evidence that the energy measures for which they invoke the flexibility fulfil the eligibility criteria in terms of scope, additionality and targeting/cost effectiveness. To this effect, the Commission will provide Member States with a reporting template outlining the level of detail required on each measure. This regular reporting on energy measures will form part of the bi-annual fiscal surveillance process going forward. Member States benefiting from the additional flexibility will be required to provide updated information on such measures and their budgetary impact before each surveillance cycle. (i.e. before 15 April in spring and before 15 October in autumn).

---

(1)  European Commission (2026), 2026 European Semester: Spring Package Communication, available: https://reforms-investments.ec.europa.eu/publications-0/2026-european-semester-spring-package-communication_en.

(2)  Careful consideration should also be given in design of measures to avoid creating an overdependency on individual suppliers or new strategic dependencies which may be counterproductive to energy security.

(3)  European Commission (2026), AccelerateEU – Energy Union: Affordable and Secure Energy through Accelerated Action, COM (2026) 370 final, 22 April 2026.

(4)  Pursuant to Article 2(20) of Directive (EU) 2024/1275 on the energy performance of buildings, a ‘deep renovation’ means a renovation that transforms a building or building unit into a nearly zero-energy building. The concept of a ‘medium renovation’ is set out in paragraph 2.3.1.1 of Commission Recommendation (EU) 2019/786 on building renovation, requiring primary energy savings of at least 30 %.

(5)  In particular, transformative industrial technologies for decarbonisation, heat pumps and geothermal energy technologies, hydrogen technologies, battery and energy storage technologies, carbon capture and carbon storage technologies, onshore wind and offshore renewable technologies, solar technologies, renewable fuels of non-biological origin and electricity grid technologies.

(6)  This includes hydrogen infrastructure-related investments, provided that they remain focused on measures with clear, near-term value for the EU’s energy security or level of fossil fuel dependency. This may include, for example, existing Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs), as well as the repurposing of existing natural gas infrastructure for the exclusive use of hydrogen, whether or not such repurposing projects are themselves included in the Union list of PCIs or PMIs.

(7)  Enhance the physical resilience of infrastructure, system adequacy and non-fossil flexibility, protection against cyber and hybrid threat, diversification of critical energy supply chains, resilience of strategic energy assets.

(8)  Only energy security measures submitted to the Commission by the Member States will be considered eligible for the flexibility.

(9)  ‘Used flexibility’ is a positive deviation in the control account that can be explained by the increase in defence expenditure and therefore is not registered as a debit. It is the amount of available flexibility needed to bring a positive control account balance as close as possible to zero. The used flexibility from energy security measures will be calculated after taking into account the flexibility from defence expenditure.

(10)  This is measured relative to the agreed reference year, which is either 2021 or 2024.

(11)  European Commission (2026) Debt Sustainability Monitor 2025. Available: https://economy-finance.ec.europa.eu/publications/debt-sustainability-monitor-2025_en.

(12)  This was introduced by Article 26 of Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 2024 on the effective coordination of economic policies and on multilateral budgetary surveillance.