German think-tank Agora Energiewende has cast suspicion on exactly how ‘green’ the EU’s much touted recovery budget will be.

The organisation believes that the EU’s budget proposal “fails to honour” the climate protection commitments made by President Ursula von der Leyen. The €1.85tr budget, which will be deliberated at the upcoming meeting of the European Council, only allocates only €80bn firmly to climate protection. If significant amendments are not made, Europe will face a vast shortfall in green investment.

According to a study undertaken on behalf of Agora Energiewende, this is just three per cent of the €2.4tr investment needed in the building, transport, power and industrial sectors to achieve the current EU climate target. Even given the most optimistic scenario of another €59bn – in which all funds that could theoretically be used for climate investment in these sectors are actually used to this end – the EU budget would cover less than a third of the required investment, the study concludes.

“The funds that are firmly earmarked for climate protection in the new EU budget proposal are far from sufficient. Member States and the European Parliament need to up their commitments. Economic recovery must be closely tied to climate protection if we hope to achieve more ambitious climate targets for 2030”, said Matthias Buck (pictured), head of European energy policy at Agora Energiewende. “In the EU Commission’s proposal, it is largely up to the Member States to decide whether they want to use EU funds for climate protection in the coming years. Granting such leeway risks significant misinvestment and could derail European climate policy.”

On 17 July the European Council will deliberate on the European Commission’s proposal for the EU’s Multiannual Financial Framework and the Corona recovery programme.

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