The European Commission has laid out its plan to generate record amounts of green investment over the next decade to achieve its target of climate neutrality by 2050, but faced criticism over the low volume of direct funding.
In front of the European Parliament on Jan. 14, Brussels bureaucrats tried to convince lawmakers of their financial package to back the Green Deal, an economywide strategy to reach net-zero emissions that was agreed upon in December 2019.
In total, the program seeks to mobilize at least €1 trillion of sustainable investments over the next 10 years. One key element of the plan is the so-called "Just Transition Mechanism," a €100 billion vehicle squarely aimed at the regions that face the steepest climb in decarbonizing and risk losing large amounts of jobs in the process.
The details of the funding pot were seen as crucial to convincing Poland to make faster emissions cuts, after the country remained the lone holdout on the net zero target among the bloc's 28 members.
"The transformation ahead of us is unprecedented," Commission President Ursula von der Leyen said in a statement. "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."
Frans Timmermans and Valdis Dombrovskis, both executive vice presidents in von der Leyen's commission, said half of the overall investment plan would be met by the EU's next long-term budget, which will commit 25% of all funding to climate-friendly investments.
In addition, the bloc's existing InvestEU program will mobilize €279 billion of public and private funds, for everything from household energy renovations to electric vehicle charging networks. Another €114 billion will come through co-financing of green projects by member states and the remainder will be made up of loans from the European Investment Bank, or EIB, as well as funds financed under the EU's emissions trading system.
"The greener EU budget will lead by example," Dombrovskis said.
'Sleight of hand'
But some lawmakers criticized the Commission for offering little in new commitments. Of the €100 billion in the Just Transition Mechanism, which will coincide with the time frame of the next EU budget from 2021 to 2027, only €7.5 billion will be "fresh European money," Timmermans said. The commission expects this to generate up to €50 billion of investment.
The rest of the pot will come through dedicated access to InvestEU, which the commission said will mobilize up to €45 billion in private funds, and special loans from the EIB to local authorities and public agencies.
Niklas Nienass, a German member of the European Parliament for the Greens, likened the math behind the proposal to a "sleight of hand" and said it would filter down to little more than pocket change for each affected region. With the mechanism, the EU plans to specifically target regions that heavily depend on jobs in fossil fuels like coal, peat and oil shale, as well as carbon-intensive industrial processes.
Nienass also said any funding should be tied to concrete commitments for coal phaseout dates from member states, for example. Green parties have surged in recent elections across Europe on the back of widespread environmental protests and rising public awareness of climate change in general.
Meanwhile, some Polish members of the European Parliament voiced strong concerns over how realistic the proposals were and how far the money would go — summarizing the country's chief objections when it declined to sign up to the 2050 target. Poland still generates about 80% of its electricity from coal, and officials there have said phasing out the fuel would cost approximately €900 billion.
Other skeptical states in eastern Europe were brought on board after initial opposition and von der Leyen will now hope to pull off a similar feat with Poland. She said in December 2019 that the commission will give Poland until June to reconsider its position.