EU to invest in Green Deal
Bloc plans to dedicate $1.1 trillion, a quarter of its budget, to fight climate change.
The Europe Investment Plan unveiled Tuesday will be funded by the EU budget and the private sector. It aims to deliver on European Commission President Ursula von der Leyen’s Green Deal to make Europe the world’s first carbon-neutral continent by 2050.
The plan includes a mechanism designed to help the regions that would be most disrupted economically by the transition to cleaner industries.
Von der Leyen, who took office in December, has made the fight against climate change her priority.
The bloc’s executive arm says that half of the investment, which amounts to 1 trillion euros, will come from the EU budget. National governments will contribute $111 billion and nearly $334 billion will come from the private sector. An additional $8.3 billion from the 2021-2027 EU budget is earmarked as seed funding within a broader mechanism expected to generate $111 billion more in investment.
The money is designed to persuade coal-dependent countries such as Poland to embrace the Green Deal by helping them weather the financial and social costs of moving away from fossil fuels.
The plan would allocate the money according to specific criteria. For example, regions where a large number of people work in coal, peat mining or shale oil and gas would get priority.
EU leaders agreed last month to make the bloc’s economy carbon neutral by the middle of the century, but Poland, which depends on coal for much of its energy, did not immediately agree to the timeline.
“We want to allow the coal regions to embrace without hesitation the European Green Deal,” said a senior commission official, who was not authorized to speak publicly as a matter of practice.
“The workers losing their jobs should be helped for re-skilling. There will be support for new infrastructure, job-seeking assistance, investment in new productive activities. And the regions where existing activities will cease will also need to be regenerated,” he added.
The final amount of financing from the plan will depend on discussions involving EU countries on the next multiannual EU budget.
Johan Van Overtveldt, head of the EU Parliament’s Budget Committee, was skeptical about how the plan was set up.
“It carries a 1-trillion-euros price tag,” he said. “Where the money should be coming from remains extremely unclear. We are against the recycling of promises and money. We don’t back creative bookkeeping and financial adventures.”
The Greens group in the European Parliament, meanwhile, rued the fact that the commission did not tie the money to a deadline for phasing out coal.
“No money should be distributed from this fund before there are clear commitments and concrete dates for the coal phaseout from member states,” Greens European lawmaker Niklas Nienass said. “Poland should sign up to EU climate targets before being eligible to money under the Just Transition Fund.”
The commission says the plan will also be supported by money from EU regional programs, from the InvestEU program, which mobilizes public and private investment using an EU budget guarantee, and the European Investment Bank.
The commission estimates that meeting the 2030 climate goals will cost an additional $289 million a year.
