In an open letter to European commission president Jean-Claude Juncker, the Climate Action Network (CAN) said the budget should be “climate proof” and fully compatible with both the 2015 Paris Agreement and the UN’s sustainable development goals.

Wendel Trio, director of CAN Europe, said: “It is clear for us that the future EU budget must live up to the huge challenges posed by climate change.

“EU institutions cannot claim that they are doing everything they can to comply with the Paris Agreement whilst continuing to fund fossil fuels. At the same time, the EU budget has a huge untapped potential to catalyse the clean energy and mobility transition.

“A credible EU budget must address the common and long-term challenges Europeans are faced with: climate change is one of them.

“Higher European climate and energy targets for 2030, particularly in less developed regions, will only be met if they are supported by a 40% climate action spending target and if all fossil fuel subsidies are phased out.”

In May, the European Commission is due to publish its general proposal on spending priorities for the next budget cycle after 2020.

The network, which includes business associations, civil society, think-tanks and other organisations in Europe, said climate change is “increasingly perceived by European leaders as a global threat” that the budget should address.

It said in the letter that 14 EU member states have pressed for at least 20% of the EU’s post-2020 budget to be spent on climate-relevant work, while the European Parliament has called for 30% for climate-related spending.

At the end of March at a conference on sustainable finance, Juncker said the EU should go further towards aligning financial flows with climate objectives.

At the same event, French president Emmanuel Macron said the EU budget should earmark 40% of its spending for climate action and “ecological transition”.