Developments

Initial Targets (December 2019 - 2020)

• Funding. Over the 2021-2030 period, the Commission wants to mobilise at least €1 trillion of sustainable investment by increasing the resources devoted to climate action under the EU budget and leveraging additional public and private financing. The European Investment Bank should be a key partner in the mobilisation of additional funding. Part of the overall resources will focus on the regions most exposed to the challenges of the transition thanks to the proposed establishment of a Just Transition Mechanism that should generate targeted investment worth €100 billion over the next seven years.
• Enabling framework. The Commission plans to use a mix of regulation and incentives to ensure that sustainability is duly taken into account in investment decisions, by putting sustainable finance at the heart of the financial system (e.g. through the implementation of the EU taxonomy and the establishment of an EU Green Bond Standard), by providing the public sector with guidance and appropriate tools (e.g. in the field of green public procurement), and by promoting a supportive state aid framework.
• Support for implementation. Advisory and technical support will be provided to public administrations and project promoters with a view to creating a pipeline of sustainable projects.

In July 2020, the European Council reached political agreement on a package worth €1 824.3 billion combining the new MFF and NGEU. The European Council conclusions have a number of implications for the contribution of EU budgetary instruments to the Investment Plan. The share of the total resources to be devoted to climate-relevant measures has been raised from 20 % (in 2014-2020) to 30 %. This objective of climate mainstreaming applies to both the MFF and NGEU. This means that, over the 2021-2027 period, climate-relevant projects could receive some €550 billion, i.e. an amount higher than the EU budget's contribution initially planned in the Investment Plan. However, the European Council reduced the allocations proposed by the Commission for a climate-specific instrument such as the Just Transition Fund.

On 16 October 2020, Parliament's Committees on Budgets and on Economic and Monetary Affairs jointly adopted a report on the investment plan. On 13 November 2020, Parliament adopted the resolution that welcomes the Sustainable Europe Investment Plan as central to the success of the green transition. The text questions whether the plan, in its current form, will enable the mobilisation of €1 trillion by 2030, given the negative economic outlook triggered by the pandemic. It calls on the Commission to reflect estimated EU-level investment needs in a revised architecture for the plan. In the shift to sustainable economic activities, it will be necessary to take account of the EU taxonomy and the 'do no significant harm' principle. In addition, the need for a methodology for measuring impact is stressed.

Latest Updated July 2021

In July 2020, the European Taxonomy Regulation entered into force.

Press corner

New EU green finance strategy shuns decision on nuclear and gas power

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• transition funding, particularly for SMEs and individual consumers
• "Issuers of green bonds will have a robust tool at their disposal to show they are funding green projects aligned with the EU taxonomy,"

Criticism

Post Covid recovery