The European Commission has unveiled plans that target investments of €1 trillion to support the European Green Deal’s aim of achieving net-zero greenhouse gas emissions in the EU by 2050.
The Sustainable Europe Investment Plan and Just Transition Mechanism will provide tailored financial and practical support to help workers and generate the necessary investments, the commission said.
As well as finance, the plan aims to provide tools for investors by putting sustainable finance at the heart of the financial system.
The commission will also provide support to public authorities and project promoters in planning, designing and executing sustainable projects.
The Just Transition Mechanism aims to ensure that the transition towards a climate-neutral economy happens in a fair way, leaving no one behind.
All regions will require funding, the commission said, with the mechanism providing targeted support to help mobilise at least €100bn 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,” the EC said.
“It will come in addition to the substantial contribution of the EU’s budget through all instruments directly relevant to the transition.”
The mechanism will comprise three elements.
A fund that will receive €7.5bn of fresh EU funding, on top of the commission’s proposal for the next long-term EU budget.
To gain access to the finance, member states will, in dialogue with the commission, have to identify the eligible territories through dedicated territorial just transition plans.
They will also have to commit to match each euro from the Just Transition Fund with money from the European Regional Development Fund and the European Social Fund Plus and provide additional national resources.
The commission said that in total this will provide between €30bn and €50bn of funding.
Another element of the mechanism will be a dedicated just transition scheme under InvestEU to mobilise up to €45bn of investments.
The scheme will seek to attract private investments, including in sustainable energy and transport that benefit those regions and help their economies find new sources of growth.
The third element will be public sector loan facility with the European Investment Bank backed by the EU budget to mobilise between €25bn and €30bn.
European Commission president Ursula von der Leyen (pictured) 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 that we present today, to mobilise at least €1 trillion, will show the direction and unleash a green investment wave.”
Commission executive vice-president for the European Green Deal Frans Timmermans said: “The necessary transition towards climate-neutrality is going to improve people’s well-being and make Europe more competitive.
“But it will require more efforts from citizens, sectors and regions that rely more on fossil fuels than others.
“The Just Transition Mechanism will help support those most affected by making investments more attractive and proposing a package of financial and practical support worth at least €100bn. This is our pledge of solidarity and fairness.”