Executive summary
In case 387/2025/JN, the European Ombudsman examined CINEA’s decision to terminate a renewable-transport grant agreement and recover more than EUR 12.7 million, representing the full EU financial contribution paid to the project.
The Ombudsman found that CINEA did not fully comply with the procedural requirements in the grant agreement. The agency did not use the required advance-notification procedures for termination and recovery and did not provide the complainant with the contractually required opportunities to submit observations at each stage. The Ombudsman also found indications that the outcome may not have been entirely fair and proportionate.
No further inquiry was justified because the beneficiary had entered insolvency proceedings and the European Public Prosecutor’s Office was investigating potential irregularities connected with the project. The Ombudsman nevertheless issued a suggestion for improvement requiring CINEA to review its internal mechanisms, tools and templates.
Subject and chronology
The project was an EU-funded pilot intended to develop renewable transport infrastructure in several Central and Eastern European Member States. It ran from 2017 until 30 June 2023 and included biofuel production facilities, fuelling infrastructure and transport assets.
The project experienced implementation difficulties, including administrative authorisations, construction permits, the COVID-19 pandemic, the war in Ukraine, price increases and shortages. The beneficiary received extensions for completion and final reporting but did not submit a complete final report package within the deadlines accepted by CINEA.
On 18 November 2024, CINEA terminated the grant agreement. It later issued a debit note seeking recovery of the entire pre-financing contribution. In March 2025, after insolvency proceedings had begun, the complainant submitted further certificates and reporting material. CINEA declined to assess that late resubmission.
Public-interest relevance
The case concerns both protection of EU financial interests and procedural safeguards for grant beneficiaries. These interests are not opposites. A recovery claim is more defensible and enforceable when the agency follows the agreed procedure, states the precise legal basis, considers observations and documents the proportionality of the amount recovered.
Key findings from the Ombudsman’s decision
1. The termination procedure was not followed
The termination letter referred generally to Article II.16.3.1 of the grant agreement without identifying the specific ground relied upon. CINEA also did not use the formal advance-notification process required by Article II.16.3.2, which required a clear statement of reasons and 45 days for observations.
2. The recovery procedure was not followed
The grant agreement required a separate advance notification of the intention to recover funds and an opportunity for the coordinator to submit observations. CINEA instead proceeded to a debit note without first completing that distinct procedural stage.
3. Fairness and proportionality were insufficiently demonstrated
The recovery concerned the entire EU contribution after six years of project activity. The Ombudsman considered that the decision appeared to rest heavily on a formal reporting failure even though periodic reports and earlier expenditure had been accepted and the project had pursued EU green-energy objectives.
The decision also noted that CINEA had been informed of the project’s difficulties but did not provide evidence of proactive intervention aimed at preserving the EU investment beyond extending deadlines.
4. The case could not meaningfully be reopened at that stage
The complainant’s insolvency and the ongoing EPPO investigation materially changed the available remedy. The Ombudsman therefore closed the case without further inquiry, while preserving the institutional lesson through a suggestion for improvement.
Forensic evidence chain
| Analytical element | Evidence identified in the decision | Assessment |
|---|---|---|
| Grant obligations | Grant agreement and reporting provisions | Primary contractual framework |
| Termination ground | General reference to Article II.16.3.1 | Insufficiently specific in the termination letter |
| Right to be heard before termination | Required 45-day observation period | Required procedure not followed |
| Right to be heard before recovery | Separate advance-notification procedure | Required procedure not followed |
| Recovery amount | More than EUR 12.7 million, full contribution | Material and highly adverse consequence |
| Project implementation | Six years of activity with partial implementation and accepted periodic reports | Relevant to fairness and proportionality |
| External constraints | Pandemic, war, permitting and market difficulties | Alternative explanations requiring assessment |
| Current remedy | Insolvency and ongoing EPPO investigation | Meaningful reconsideration not feasible at present |
Quantitative-formalism risk
Several official figures could be accurate yet misleading if detached from the evidence chain:
- 100% recovered may describe the amount claimed, not the amount legally or practically recoverable.
- Project terminated is an administrative status, not proof that no eligible work or public benefit existed.
- EUR 12.7 million protected would be misleading where insolvency makes recovery uncertain.
- Full reporting package not submitted on time does not alone establish that every project cost was ineligible.
The correct sequence is:
contractual obligation → established facts → procedural safeguards → eligibility assessment → calculation → proportionality → enforceability → review.
Alternative explanations and countervailing facts
The beneficiary had a lengthy period, including extensions, to submit the final reporting package. The project was not fully delivered, and nearly EUR 13 million of EU funds had been paid. Those facts support strong financial-control concerns.
At the same time, accepted periodic expenditure, documented external difficulties, late certificates and the absence of the required procedural stages support the Ombudsman’s concerns about fairness and proportionality. The EPPO investigation may produce additional findings and must not be interpreted in this analysis as proof of criminal conduct.
Institutional lesson
Protecting EU financial interests requires more than issuing the largest possible recovery claim. It requires a valid, reasoned and enforceable process. Procedural safeguards are therefore part of financial protection, not an obstacle to it.
CINEA should be able to demonstrate through its templates and case-management records that staff:
- identify the precise contractual ground for termination;
- issue a reasoned advance notification;
- preserve the full observation period;
- assess submitted observations;
- treat termination and recovery as separate procedural decisions;
- calculate the recoverable amount on an evidenced basis;
- document fairness and proportionality;
- intervene early where a complex EU investment is at risk.
Recommended Civic Forensics modules
- Analysis of an Individual Administrative Act
- Evidence Register
- Document Comparison
- Expected Evidence Trace Plan
- Quantitative Claims Module
- Institutional Integrity Index
- Final Forensic Report
Source
European Ombudsman, Decision on CINEA’s decision to terminate a grant agreement in the area of renewable transport and to recover the full amount of its financial contribution to the project, case 387/2025/JN, decision of 23 July 2026, published 27 July 2026: https://www.ombudsman.europa.eu/en/decision/en/230157
Limitations
This analysis is based on the Ombudsman’s published decision. It does not independently assess the complete grant file, the eligibility of individual costs or evidence held by EPPO. It makes no finding of fraud or criminal liability.