EC attaches green ambitions to EUR 1.85trn coronavirus recovery plan

The European Commission (EC) on Wednesday proposed to beef up the 2021-2027 budget and top it with a EUR-750-billion (USD 824.2bn) recovery fund, dubbed Next Generation EU, to revive the continent’s economy in the post-coronavirus world.

In total, the EU is to be equipped with EUR 1.85 trillion, some of it available through grants and loans to member states and companies and some through dedicated programmes.

The European Green Deal and digital technologies are at the core of the proposal to move private investment in the next era.

The EC intends to focus on moving investment to technologies that are seen as key to the green energy transition, highlighting renewables, energy storage, clean hydrogen, batteries, carbon capture and storage and sustainable energy infrastructure, it said in a note to the European Parliament. It will also seek to boost the uptake of offshore renewables.

To further spur creation of green jobs, the EU executive will facilitate the production and deployment of sustainable vehicles and vessels, alternative fuels and support the financing of the installation of one million charging points and other components that will bring about clean urban mobility.

Next Generation EU would be funded entirely through borrowing on the financial markets against the future EU budgets, which the EC will consider strengthening with own new resources based on the emissions trading scheme, a carbon border adjustment mechanism, possibly a new digital tax, among others.

Environmental organisation Greenpeace called the recovery plant “contradictory at best and damaging at worst”.

“[T]he Commission’s proposal does not offer alternatives to an economic model that has been shaken by the coronavirus pandemic, because of its reliance on endless growth, the concentration of wealth and the exploitation of people and nature,” Greenpeace said in a statement.

Its environmentalist peer, Friends of the Earth, echoed the sentiment saying that “too many of the measures fall short of the goals of the European Green Deal, and put techno-fixes and corporate interests ahead of the resilient and caring economy we need”.

Ignacio Galan, CEO of Spanish utility Iberdrola SA (BME:IBE) had a positive reaction to the EC’s proposal.

"Iberdrola supports the strategy for a rapid and sustainable recovery based on the European Green Deal. This important green pact will deliver growth, employment and prosperity. We will see real economic benefits, and the creation of value for society as a whole. The resources, technology and knowledge to move towards a green recovery are already in place. A clear and predictable framework is key to starting quickly," Galan said in an emailed statement.

(EUR 1.0 = USD 1.099)

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