Europe is dedicated to ambitious sustainability goals, including achieving climate neutrality by 2050. This transition demands significant investments while public finances are strained by security needs, inflation, an ageing population, and other priorities. A new analysis by the European Environment Agency (EEA), released today, explores this challenge and highlights the importance of investing in clean technology and green industry to drive progress towards the European Green Deal’s objectives.

The EEA briefing, titled ‘Investments in the sustainability transition: leveraging green industrial policy against emerging constraints,’ examines the next EU policy cycle and discusses the key challenges and opportunities for maintaining the implementation of the European Green Deal amidst various societal demands and fiscal sustainability concerns.

The briefing suggests that the EU’s new green industrial policy can bolster public investments in sustainability and increase the private sector’s contributions to this transition. With the annual investment needs of the European Green Deal exceeding half a trillion euros until 2030, private financing will be crucial for success.

According to the EEA, a new EU green industrial policy is essential to prevent stagnation in green investments. Both public and private sector investments must be rapidly increased, especially in the buildings and transport sectors, to meet the 2050 climate neutrality target.

The EEA briefing identifies the proposed Net-Zero Industry Act as a crucial first step towards establishing a new green industrial policy in Europe. This Act, proposed by the European Commission in March 2023, aims to enhance Europe’s manufacturing capacity for net-zero technologies and accelerate the transition to climate neutrality. This initiative should be supported by EU-wide policies based on the single market.

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