Incoming Commission President Ursula von der Leyen’s pledge to turn Europe into “the world’s first climate-neutral continent” means efforts to green the economy are set to go into overdrive. But where will the necessary funds come from to back the energy transition?
Investments in low-carbon energy and related infrastructure will have to increase from an annual 2% of GDP to at least 2.8%, according to the European Commission’s long-term climate strategy, which aims for net-zero emissions by 2050.
That means an estimated €500-600 billion extra per year.
For some like France, the transition will be less difficult, given the country’s existing nuclear fleet and geographical advantages in developing solar and wind energy.
But for others like Poland, which rely on coal for more than 80% of their electricity, the shift to low-carbon energy sources will be more challenging and require a larger financial effort.