The EU has set out to become a global leader in the fight against climate change. This is mirrored in its ambitious climate and energy targets up until 2030. By that year, GHG emissions will have to be 40% below 1990 levels, renewable energy needs to represent 27% of gross final energy consumption, and energy consumption will have to decrease by 27% in comparison to the BAU scenario.
In the analytical study entitled ‘Energy and the MFF’, published by the European Parliament on February 15, 2018, Trinomics (together with Öko-Institut e.V.) assesses the status quo of EU-wide investments supporting the energy transition and provides recommendations for the EU institutions to ensure compliance with the 2030 targets.
The findings of the study reveal the existence of a significant financing gap for the European energy transition. Roughly EUR 150bn in investments are missing annually to confidently meet the 2030 targets. The greatest proportion of this gap is due to a lack of finance for energy efficiency measures (EUR 137bn annually). Furthermore, the monetary contribution of EU institutions in the form of MFF programs or financial instruments is minimal in comparison (EUR 7.44bn annually).
Nonetheless, we emphasize that providing the lion’s share of financial means to push forward the energy transition is rather the task of the private sector and member states than the EU institutions. There are a variety of (non-financial) ways by which the EU institutions can maximize the value of their current level of contributions (i.e. MFF and financial instruments) and henceforth continue to play a key role in closing the financing gap:
- Recognizing the limits of EU finance and emphasizing the central importance of EU policy influence on incentives and market design
- Shaping and enabling a policy and market environment that supports the energy transition
- Concentrating the limited EU funding available on its important role at the margins of the energy transition
- Supporting R&D and technological innovation
- Leveraging co-finance for those projects that would otherwise not receive investment
- Improving the mainstreaming of climate objectives in other EU policies and budget lines
- Further developing the reporting and monitoring of energy and climate expenditure across all financing sources
From Trinomics’ side, this study was authored by consultants Rob Williams, Lisa Eichler & Niclas Gottmann. Click here to visit the project page.