Parliament adopts position on InvestEU signalling need to ensure all investments maximise benefits to climate environment and society.
With its proposed €665 billion envelope, InvestEU provides opportunity to support Europe’s transition to a net zero economy in the next Multiannual Financial Framework (MFF).
Today’s vote in the European Parliament strengthened some key climate and energy levers of the InvestEU fund. These include, increasing the share of climate related projects to 40%, broadening sustainability proofing and strengthening energy efficiency in buildings. By failing to explicitly exclude fossil fuels or include the energy efficiency first principle however, Parliament is still missing the opportunity to fully align the Fund with the Paris Agreement.
While this vote sends a clear signal for more climate and energy ambition, it is only one part of the game. It is now up to member states to be resolutely forward looking and adopt a similar line on InvestEU.
It is encouraging that sustainability proofing of investments is being linked to the EU’s sustainability taxonomy. The Commission should now develop strong and clear guidance to permit only investments which make a substantial contribution to sustainability.
Notes to editors
1. The European Parliament adopted its InvestEU position on 16 January around 5pm after being voted by the lead committee (joint between the Budgets and the Economic and Monetary affairs committees) on 13 December. The vote text will be available in the next few days.
2. Based on the amendments voted in plenary, the main progresses the Parliament voted for are (1) to improve InvestEU’s share of climate-related projects from 30% to 40%, (2) to extend the sustainability proofing of investments to all windows of the Fund (where applicable), (3) to keep the window on sustainable infrastructure and (4) ensure it has 65% of Paris-aligned investments. The Parliament however missed the opportunity to explicitly exclude fossil fuels from receiving funding as well as enshrining the energy efficiency first principle, even though energy efficiency is estimated to make up a large share of Europe’s climate-related investment gap.
3. Next steps include the adoption of the Council’s partial general approach (PGA) on InvestEU, which could then kickstart trialogues. However discussions in Council have only recently restarted after unlocking mid-December outstanding governance issues of the Fund so that a PGA is not expected soon.
4. The Commission will develop guidance on the sustainability proofing, taking into account the EU’s sustainability taxonomy, which promoters will be required to follow when requesting financing.
5. E3G is an independent climate change think tank operating to accelerate the global transition to a low carbon economy. E3G specialises in climate diplomacy, climate risk, energy policy and climate finance.
6. In 2016 and 2017, E3G was ranked the fifth most influential environmental think tank globally.