# EU fiscal policy for energy security and transition > Live situation record from CLSTR: https://clstr.news/situations/eu-fiscal-policy-for-energy-security-and-transition > Updated: 2026-09-08T01:22:53.000Z. Sources: 26. Developments: 5. The European Commission has introduced new fiscal guidelines to manage energy security and the transition to sustainable energy. To address conflicts in the Middle East and Iran, the Commission adopted an explanatory note allowing member states to utilize a national safeguard clause—also referred to as the National Escape Clause (NEC)—to gain fiscal flexibility between 2026 and 2028. This mechanism permits derogations from the Stability and Growth Pact rules to support energy system resilience and non-fossil energy transitions. To access this flexibility, member states must submit a list of planned measures and estimated costs to the Commission for case-by-case evaluation. While a total limit of 1.5% of GDP for deviations from recommended net expenditure paths remains, specific limits for energy security measures are set at 0.3% of GDP annually and 0.6% of GDP cumulatively. These measures must be implemented after February 28, 2026, and must be financed at the national level with a direct budgetary impact. In a shift in policy direction, the Commission is moving away from emergency energy subsidies designed to mitigate high utility bills. Instead, the EU is prioritizing deficit spending for long-term, structural investments, such as solar systems, heat pumps, and hydrogen production. Recent developments show increased spending margins for energy security and the allocation of new resources to businesses through the Scale Up Europe fund. Further expansion of fiscal flexibility allows for clean energy investments like battery storage through 2028. This coincides with broader electrification efforts, such as the European Commission’s Electrification Action Plan, which aims to double the share of electricity in the European economy to 46% by 2040. ## Claims - The European Commission has issued guidance allowing member states to use the national escape clause for energy security spending from 2026 through 2028. (single source) - Eligible energy security measures are capped at 0.3% of GDP in any single year and 0.6% overall. (single source) - The Electrification Action Plan proposes doubling the share of electricity in the European economy to reach 46% by 2040. (single source) - Germany's renewable capacity is projected to rise from approximately 73% in 2025 to nearly 88% by 2035. (single source) - Germany plans to implement a modern capacity market by the end of 2027 to ensure power supply reliability. (single source) - The EEG-2027 reform in Germany will phase out fixed feed-in tariffs for renewable generation. (single source) ## Timeline ### 2026-09-08: European Union expands fiscal flexibility for energy security investments The EU is easing fiscal rules to boost clean energy investment through 2028, while Germany prepares for a major power sector overhaul and Europe pushes for increased electrification by 2040. 3 sources. https://clstr.news/cluster/european-union-expands-fiscal-flexibility-for-energy-security-investments ### 2026-09-05: European Union increases energy security spending margins EU member states are gaining increased spending margins for energy security, while the Scale Up Europe fund provides new resources for businesses. 5 sources. https://clstr.news/cluster/european-union-increases-energy-security-spending-margins ### 2026-08-19: European Commission extends budget flexibility to energy security The European Commission is extending the National Escape Clause to energy security, allowing member states to use up to 0.6% of GDP for structural green investments and energy resilience through 2028. 5 sources. https://clstr.news/cluster/european-commission-extends-budget-flexibility-to-energy-security ### 2026-08-19: European Commission shifts energy policy from subsidies to green investment The European Commission is ending emergency energy subsidies, allowing deficit spending only for long-term green infrastructure and energy transition investments. 4 sources. https://clstr.news/cluster/european-commission-shifts-energy-policy-from-subsidies-to-green-investment ### 2026-08-17: European Commission approves fiscal flexibility for energy security The European Commission has approved fiscal flexibility for EU member states to fund energy security measures, allowing deviations from Stability and Growth Pact rules through 2028. 9 sources. https://clstr.news/cluster/european-commission-approves-fiscal-flexibility-for-energy-security --- Cite as: EU fiscal policy for energy security and transition. CLSTR, https://clstr.news/situations/eu-fiscal-policy-for-energy-security-and-transition