Financing the green transition: European Union takes action

Jan 17, 2020

The European Union is committed to becoming the first climate-neutral bloc in the world by 2050. This requires significant investment from both the EU and the national public sector, as well as the private sector in order to finance the green transition.

AMBIO is providing services to identify funding sources. Our goal is to assist clients in securing their competitive position and promote future development. For this reason, AMBIO provides access to project and business financing schemes and grants. These programs are available through National, European and International investment initiatives.

EU takes action

The European Green Deal’s Investment Plan – the Sustainable Europe Investment Plan – presented today will mobilise public investment. Thus, it will help unlock private funds through EU financial instruments, notably InvestEU. This would lead to at least €1 trillion of investments.

While all Member States, regions and sectors will need to contribute to the transition, the scale of the challenge is not the same. Some regions will be particularly affected and will undergo a profound economic and social transformation. The Just Transition Mechanism will provide tailored financial and practical support to help workers and generate the necessary investments in those areas.

The President of the European Commission, Ursula von der Leyen, said: “People are at the core of the European Green Deal, our vision to make Europe climate-neutral by 2050. The transformation ahead of us is unprecedented. And it will only work if it is just – and if it works for all. We will support our people and our regions that need to make bigger efforts in this transformation. To make sure that we leave no one behind. The Green Deal comes with important investment needs, which we will turn into investment opportunities. The plan to mobilise at least €1 trillion, will show the direction and unleash a green investment wave.”

Financing the green transition through two channels: 

The European Green Deal Investment Plan

The European Green Deal Investment Plan will mobilise EU funding. It will create an enabling framework to facilitate and stimulate the public and private investments needed for the transition to a climate-neutral, green, competitive and inclusive economy. Complementing other initiatives announced under the Green Deal, the Plan is based on three dimensions:

• Financing: mobilising at least €1 trillion of sustainable investments over the next decade. A greater share of spending on climate and environmental action from the EU budget than ever before will crowd in private funding, with a key role to be played by the European Investment Bank.
• Enabling: providing incentives to unlock and redirect public and private investment. The EU will provide tools for investors by putting sustainable finance at the heart of the financial system. In addition, EU will facilitate sustainable investment by public authorities by encouraging green budgeting and procurement. Finally, EU will design ways to facilitate procedures to approve State Aid for just transition regions.
• Practical support: the Commission will provide support to public authorities and project promoters in planning, designing and executing sustainable projects.

The Just Transition Mechanism

The Just Transition Mechanism (JTM) is a key tool to ensure that the transition towards a climate-neutral economy happens in a fair way, leaving no one behind. All regions will require funding and the European Green Deal Investment Plan caters for that. The Mechanism provides targeted support to help mobilise at least €100 billion over the period 2021-2027 in the most affected regions, to alleviate the socio-economic impact of the transition. The Mechanism will create the necessary investment to help workers and communities which rely on the fossil fuel value chain. It will come in addition to the substantial contribution of the EU’s budget through all instruments directly relevant to the transition.

The Just Transition Mechanism is about more than funding: relying on a Just Transition Platform, the Commission will be providing technical assistance to Member States and investors. It will make sure the affected communities, local authorities, social partners and non-governmental organisations are involved. The Just Transition Mechanism will include a strong governance framework centred on territorial just transition plans.

Source: https://ec.europa.eu/
To read full article, please, visit: https://ec.europa.eu/commission/presscorner/detail/en/IP_20_17