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25th Oct 2021

EU Commission's green recovery criticised as 'brown'

  • Civil society organisations argue the proposal leaves the door open to support fossil fuels and polluting sectors (Photo: Karsten Wurth / Unsplash)

The European Commission's combined €1.85 trillion recovery plan from the coronavirus crisis - comprising Wednesday's €750bn recovery fund and the next seven-year budget - has not convinced environmental NGOs, who said the proposal fails to offer a truly 'green recovery'.

"We need to press fast forward towards a green, digital and resilient future. To those who fear the cost of investment, I say that the cost on inaction will be much more expensive down the road," the president of the commission, Ursula von der Leyen, told MEPs on Wednesday (27 May).

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This proposal of the EU executive maintains the commitment to spend at least 25 percent of the EU's long-term budget (a total of over one trillion euros) on climate-related projects, despite the calls for a 50 percent target - aligned with the European Investment Bank.

This has been already been criticised by civil society organisations, which argue that the proposal leaves the door open to support fossil fuels and polluting sectors.

"The commission claims its plan protects us and invests in the future, but it leaves our children and grandchildren to face the consequences of climate and environmental breakdown," said Greenpeace EU director, Jorgo Ris.

"Unfortunately the commission's 'green' recovery package today has a distinctly brown tinge. The measures fall short of the goals of the Green Deal, and put techno-fixes and corporate interests ahead of the resilient and caring economy we need," warned Jagoda Munic, director of NGO Friends of the Earth Europe.

Additionally, the commission's proposal would reinforce rural development with an extra €15bn to support agro-ecology and strengthen nature protection.

The recovery plan proposes to increase the Just Transition Fund - a €7.5bn investment to support fossil fuel-dependent regions to green their economies - with an additional €32.5bn to support re-skilling and help businesses.

Green 'strings'?

The commission's recovery plan aims to unlock extensive private investment thanks to the recently-announced EU's Climate Law and EU sustainable finance taxonomy, which could guide investors in the long-term despite the bloc heading for a "historic recession".

Yet, the commission estimates the green transition investment gap at €940bn.

However, it is unclear how exactly the taxonomy will be applied to the EU's long-term budget.

The main priorities for the EU's executive will be the circular economy, cleaner mobility, renewables and a 'renovation wave' of buildings.

All public investment of the recovery fund will be expected to respect the green oath to "do no harm" - which would exclude any subsidies to environmentally harmful activities, such as, fossil fuels industries, nuclear energy or incineration of waste.

However, the EU's long-term budget would not be restricted to following green restictions - just like the nearly two trillion euros of state aid already used to support all type of industries across the EU.

The leader of the Greens/EFA group, MEP Ska Keller, stressed the importance to ensure long-term results, which is a concerned also shared by civil society.

"Let's not repeat the same mistakes [from the financial crisis in 2008], we need to ensure that the money is well-invested into projects that will help, in the long-term, to create jobs and save the one planet that we have," she said.

According to Ester Asin, director of WWF Europe, "there are missing mechanisms for implementing and enforcing the green conditions to truly ensure that no money spent by the member states will go to harmful activities".

Nordics push ahead

Meanwhile, Nordic energy ministers agreed on Tuesday (26 May) on cooperating to reinforce "a green Nordic region," prioritising the energy transition in their economic recovery from the coronavirus crisis.

Energy cooperation projects will receive a larger share of the Nordic Council's budget in the coming years to invest in renewables and energy efficiency while securing energy supplies.

Additionally, Nordic countries agreed to strengthen the common Nordic electricity market, which is inspired by the European internal energy market, to provide flexibility to the markets.

While the EU is on track to achieve its 2020 targets on greenhouse-gas emissions and renewable energy, the energy efficiency objective remains very much a 'pending' task for the bloc.

In 2018, Sweden had the largest share of energy from renewable sources in the EU (54.6 percent), followed by Finland (41.2 percent), Latvia (40.3 percent), Denmark (36.1 percent), according to statistics published by Eurostat.

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Some 180 European politicians, business leaders, MEPs and environmental activists have called for green recovery investment packages to develop "a new model of prosperity" after the pandemic ends.

How pandemic opens doors to green transport industry

While much of the transport sector is pushing for unconditional state aid and to postpone climate policy action, experts believe that this crisis could help to transform the EU's transportation system, making it more resilient, sustainable and flexible.

East vs West split in EU on higher Green Deal target

Eight EU countries on Tuesday called on the European Commission to strengthen the Green Deal, while central and eastern Europe remain cautious - citing different starting positions and deepen inequalities.

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