LONDON (Reuters) – More than 1,000 climate friendly projects could line up for a piece of the EU’s post-coronavirus recovery package, as ministers begin to discuss the bloc’s 2021-27 budget and economic stimulus fund, according to research seen by Reuters.
FILE PHOTO: European Union flags flutter outside the European Commission headquarters in Brussels, Belgium June 25, 2020. REUTERS/Yves Herman/File Photo
EU leaders are meeting in Brussels on Friday to try to agree the budget and economic stimulus fund, which have been criticised this week by environmental think tanks for falling short of what is needed to meet the bloc’s current goal to cut greenhouse gas emissions by at least 40% against 1990 levels by 2030.
The EU Commission has proposed a 1.1 trillion euro ($1.25 trillion) budget plus a 750 billion euro recovery fund aimed at rebuilding economies most affected by the coronavirus pandemic.
The Commission says the overall package will drive a recovery that boosts “green” industries and technologies, to reduce emissions of the greenhouse gases fuelling climate change.
Research reviewed by Reuters, ahead of its publication in September, identified more than 1,000 green projects eligible for the recovery fund. The research, commissioned by the European Climate Foundation, was conducted by consultancy EY.
The projects would support over 2 million jobs and require investment of around 200 billion euros, the research shows.
These so-called “shovel-ready” projects – which could be ready for launch within two years if they receive financing – cover renewable energy, energy storage, building renovation, low-carbon transport, manufacturing of low-carbon technologies and more efficient industrial processes.
Examples include HYBRIT – a joint venture between steel company SSAB (SSABa.ST), mining firm LKAB and utility Vattenfall [VATN.UL] – to replace coking coal with fossil fuel-free hydrogen in steel production in Sweden which would need 1.5-2 billion euros, said Steve Varley, EY global vice chair for sustainability.
Another project is by Korean chemicals company LG Chem (051910.KS) to develop a gigafactory to produce lithium-ion batteries for electric vehicles in Krakow, Poland.
A third scheme relates to the French government’s plan to renovate Paris buildings to make them more energy efficient, Varley said.
The 1,000 projects pinpointed represent only about 10% of green projects currently under development in Europe, EY said.
That means the entire EU pipeline of green projects could represent as much as 1 trillion euros in investment, and replace at least the 12 million jobs lost during the pandemic, Varley said.
To identify which projects might be eligible for EU funding, EY interviewed businesses, stakeholders, officials and investors in each member state. It also examined planning applications and requests for funding.
Around 30% of the projects highlighted by EY are being developed by start-ups and small and medium enterprises focusing on low-carbon mobility, green hydrogen and low-carbon construction materials.
More than 20% are small-scale, and require investment of up to 5 million euros.
EY said it will share the list of ready-to-invest projects shortly with member states preparing recovery plans.
Reporting by Nina Chestney; Editing by Kate Daigle and Jason Neely
