The European Commission yesterday unveiled its plan for at least EUR1 trillion (USD1.1 trillion) in sustainable investments over the next decade. The European Green Deal Investment Plan (EGDIP) is the investment pillar of the Green Deal, which aims to make the EU climate-neutral by 2050.
In December last year, all member states agreed to green their economies over the next 30 years to tackle the effects of climate change, but Poland said it would wait to see financial incentives. The plan aims to help coal-producing regions, like Poland, move away from fossil fuels, but it is not opposed to financing of gas infrastructure.
Nuclear power, a low-carbon source of electricity, is not considered ‘green’ under the plan and this transition fund money will not finance construction of nuclear power plants. This is despite the fact that the 126 nuclear power reactors in operation in the European Union provide more than half of its low-carbon electricity output. The use of nuclear energy in the EU avoids the emission of 700 million tonnes of CO2 each year.
The Commission said yesterday the target requires significant investment from the EU and the national public sector, as well as the private sector. The EGDIP – also referred to as the Sustainable Europe Investment Plan – will, it said, mobilise public investment and help to unlock private funds through EU financial instruments, notably InvestEU.
Complementing other initiatives announced under the Green Deal, the EGDIP is based on three dimensions: financing, enabling, and practical support. The plan aims to mobilise at least EUR1 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,” the Commission said. The plan also aims to provide incentives to unlock and redirect public and private investment 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.
Just Transition Mechanism
“While all Member States, regions and sectors will need to contribute to the transition, the scale of the challenge is not the same,” it noted. “Some regions will be particularly affected and will undergo a profound economic and social transformation.”
It has therefore also launched the Just Transition Mechanism (JTM), aimed at providing “tailored financial and practical support to help workers and generate the necessary investments in those areas.”
The JTM will consist of three main sources of financing. Firstly, a Just Transition Fund which will receive EUR7.5 billion of fresh EU funds, above the Commission’s proposal for the next long-term EU budget. Secondly, a dedicated just transition scheme under InvestEU to mobilise up to EUR45 billion of investments. Thirdly, a private sector loan facility with the European Investment Bank backed by the EU budget.
European Commission President Ursula von der Leyen said: “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 EUR1 trillion, will show the direction and unleash a green investment wave.”
‘Hard to justify’
Foratom, the European nuclear trade body, said it welcomed the EU’s goal of providing financial support to coal-dependent regions in order to assist them in their decarbonisation efforts, but that it regrets the Commission’s proposal to exclude such funds being used for nuclear power plants.
It noted that a number of reports published over the last 18 months – such as by the Intergovernmental Panel on Climate Change, the International Energy Agency and even the Commission itself – had highlighted that low-carbon nuclear is an essential component of a low-carbon economy. In addition, at the end of last year, several Member States made it clear that in order to commit to the 2050 decarbonisation targets then they must be allowed to invest in nuclear power, Foratom added.
“The benefits of transitioning workers from the coal into the nuclear industry have already been demonstrated in both France and the UK”, Foratom Director General Yves Desbazeille said. “We therefore find it hard to justify such a proposal by the Commission. At the end of the day, the EU should be focusing on helping people in these regions to transition into low-carbon industries. Limiting the low-carbon sectors which will be eligible for such funds will make achieving our low-carbon targets without leaving anyone behind a lot more difficult – if not impossible”.
The European nuclear industry currently sustains more than 1.1 million jobs in the EU and generates more than half a trillion euros in GDP according to a study by Deloitte. Looking ahead to 2050, the authors believe that, on average, the industry would support more than 1.3 million jobs annually and generate EUR576 billion per year in GDP. This shows, Foratom said, that nuclear offers benefits both in terms of decarbonising the power sector and providing European citizens with much-needed jobs.
Source: World Nuclear News