Onshore and offshore wind and electric vehicles singled out as areas where Europe must increase investment to achieve clean energy targets
The EU needs to double investments ahead of 2030 to meet its climate goals, a report by the Paris-based Institute for Climate Economics has found.
Between 2024 and 2030, the EU will need to invest €813bn annually from public and private sources in the energy system, including in grid infrastructure, buildings and transport, the I4CE says. In 2022, the year for which the most recent and reliable data is available, the EU invested €407bn in clean energy, leaving a deficit of €406bn, the report states.
The EU is aiming to reduce its greenhouse gas emissions by 55 per cent by 2030 compared with 1990 levels, and to achieve carbon neutrality by 2050.
The I4CE report tracks investment in 22 different sectors that fall under the energy transition. In 2022, only two sectors received higher investment than what it deems is needed, namely hydropower (an additional €2bn) and battery storage (an extra €0.5bn). The other 20 sectors suffered an “investment deficit”. Both offshore and onshore wind power need an additional €74bn in annual investment, while an extra €79bn, on top of 2022 investment, is necessary to develop the battery electric vehicle sector, says the report.
In agreement with recommendations from the European Environment Agency, the I4CE suggests that the EU increases its monitoring of energy transition investment to provide a “more granular and accurate overview of required and actual investments in climate mitigation”.
Addressing the deficit requires a “comprehensive approach”, the report says, including the mobilisation of current and future regulations, carbon pricing and public finance schemes. It also recommends that the EU considers creating a long-term climate investment plan in line with the objectives of the Green Deal.
The report is available to read here.