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Contribution to the Green Deal and the Just Transition Scheme

The European Green Deal comprises various policy initiatives in area such as agriculture to energy efficiency, clean transport and the circular economy, in order to reach the increased European Union’s 2030 climate and environmental goals in view to reach climate neutrality by 2050.

Turning the European Green Deal into reality requires substantial additional investments. To reduce greenhouse gas emissions by 55% compared to 1990 levels by 2030, Europe will need to invest an estimated €336 billion more each year in energy system than it did in the period 2011-20. On top of that, we estimated the investment needs of around EUR 130 billion per year to deliver on environmental objectives.

On 14 January 2020, the European Commission adopted the European Green Deal Investment Plan (EGDIP) - also referred to as Sustainable Europe Investment Plan (SEIP) - the financial pillar of the European Green Deal. It aims to mobilise public and private financial resources to support around €1 trillion in green investment over the next decade while leaving no one behind.

The European Green Deal Investment Plan builds on three dimensions:

  • Funding, through the EU budget and an innovative instrument to attract and mobilise private finance, the InvestEU Programme
  • Enabling, that will develop EU tools and frameworks to direct finance to green investments, notably through the Renewed Sustainable Finance Strategy and revised State Aid rules
  • Executing, which consists in creating a strong pipeline of green projects by providing technical assistance for the preparation of viable projects

InvestEU and the Green Deal

Reaching an ambitious climate target for InvestEU is essential to achieve the objectives of the green transition.

At least 30% of the InvestEU Programme, in line with the European Green Deal objectives, shall support financing for investments that contribute to EU’s climate objectives. Moreover, 60% of the investments supported under the “Sustainable Infrastructure Window” of the InvestEU Fund shall contribute to EU’s climate and environmental objectives.

InvestEU will support sustainable investments in all sectors of the economy and will contribute to the dissemination of sustainable practices among private and public investors.

The Commission will put forward a climate and environmental tracking methodology for measuring the contribution of specific financing and investment operations to the climate and environmental targets of InvestEU.

In addition, it will put in place a method for sustainability proofing to assess the environmental, climate and social impacts of projects, taking also in consideration the need to ensure proportionality and reduce administrative burden. The sustainability proofing requirements operationalise the ‘do no significant harm’ principle and will progressively integrate the technical screening criteria of the EU Taxonomy.

Both the climate and environmental tracking guidance and the sustainability proofing guidance were developed by the Commission in collaboration with experts from potential implementing partners.

Just Transition Scheme under InvestEU

The European Green Deal Investment Plan encompasses a Just Transition Mechanism to facilitate the green transition of territories in the EU that are currently hosting CO2-intensive industries and are thus most affected by the transition. The Just Transition Mechanism consists of 3 components:

  • The Just Transition Fund
  • The Just Transition Scheme under InvestEU
  • The Public sector loan facility implemented by the European Investment Bank

Projects in the territories having an approved just transition plan under the Just Transition Fund Regulation or projects that benefit those regions can benefit from the scheme, provided they are key to the transition of those territories. For instance, infrastructure projects that improve the connectivity of the just transition regions may be covered.

Such support will be implemented through InvestEU financial products proposed by the InvestEU implementing partners across the four InvestEU policy windows. It will support economically viable investments made by private and public sector entities. This should foster economic growth and ultimately economic attractiveness of the Just Transition territories.

The InvestEU Advisory Hub will support the origination of a robust pipeline of projects to support European Green Deal Investment Plan’s objectives. In addition, it will provide capacity building to implementing partners, financial intermediaries or upstream support to project promoters with the sustainability proofing, climate and environmental tracking and make projects investable in general.