Financing Europe’s Green Recovery
This project – with lead partner Climate&Company – aims to create political support for using a maximum of EU funds for an economic recovery consistent with the EU’s increased 2030 climate ambition.
One week after the International Energy Agency declared that new investments in fossil production are incompatible with the global goal to limit warming to 1.5 degrees, EU leaders will address how to set Europe on the path to climate neutrality by 2050. Underlying the discussion will be the question of how to finance the transition. In its new guide published today, the think tank Agora Energiewende identifies and analyses the already available routes to public climate financing.
“Our climate finance guide can be compared to an Ariadne's thread that describes and links the different possibilities for financing climate action,” says Matthias Buck, Director for European Energy Policy at Agora Energiewende. “If smartly combined with reforms and national funding programs, EU funds will catalyse the much-needed public and private investments into Europe’s green economic recovery.”
In mid-July, the European Commission will present its “Fit for 55” package, which will amend and revise key legislation in the areas of renewables, ETS, effort sharing, energy efficiency and energy taxation.
Within this context, governments in Europe must develop national recovery and resilience plans to spell out how they intend to use the available EU funds in the next years. The Commission now has two months to evaluate the recovery plans and agree on a payment schedule including milestones and targets with all EU Member States. Once the plans are adopted by the Council, Member States will receive a first upfront payment of 13 percent of their allocation.
Around two thirds of the recovery and resilience plans have been submitted thus far to the European Commission. A first analysis suggests that some countries are likely to fall short of the mandatory target to use at least 37 percent of EU funds to accelerate their green transition.
The guide on climate finance developed by Agora Energiewende intends to precisely help governments and project developers to accelerate the decarbonization of their economies with the help of EU budget programmes.
To support a swift transition, the guide t highlights opportunities that can be implemented quickly. It also provides an overview on future-proof energy transition investments in four key sectors – transport, building, industry and energy generation – in a move to bring the world of finance and the world of clean energy solutions closer together.
“We expect that some governments will decide to increase their climate-spending commitments from EU funds over the course of this year. Our climate finance guide helps all progressive voices in government, amongst stakeholders and in civil society to identify the most suitable way how EU funds can support truly transformative climate-related investments in the different economic sectors,” says Buck.
The guide „Matching Money with Green Ideas” was written by Agora Energiewende in cooperation with Climate & Company. Published in English, the 62-page publication is available for free download below.