Under current regulations, EU member states can achieve their individual and collective renewable energy targets based on the amount of renewables deployed on their territory through national measures. In addition, under the revised Renewable Energy Directive, EU member states can use cooperation mechanisms with other member states such as statistical transfers or joint projects. The new financing scheme would open a third possibility, which is expected to be operational by early-2021.
In January 2020, the EC unveiled its Sustainable Europe Investment Plan, aimed at financing its Green Deal to make the continent climate neutral by 2050. The planned investments, which would reach €1,000bn over a 10-year period, are expected to come both from the EU budget and private funds, with an important role played by the European Investment Bank (EIB). The EC will provide incentives to unlock and redirect public and private investment towards sustainable projects, most notably by encouraging green budgeting and procurement. The Commission will also directly help public authorities and projects developers.
In addition, a scheme has been designed to raise at least €100bn over the period 2021-2027 to mitigate the impact of the energy transition in the most affected regions of the European Union (EU). The so-called Just Transition Mechanism (JTM) is expected to receive €7.5bn of additional funding from the EU’s long-term budget (2021-2027), €45bn of investment mobilised under InvestEU (to attract private investments) and €25-30 bn of investments mobilised thanks to a public sector loan facility with the EIB backed by the EU budget.
