Green Forum • 8 January, 2025 at 8:11 PM
The European Central Bank (ECB) has warned that the EU risks missing its 2030 climate targets unless it increases investment in the green economy by an estimated €558 billion annually.
To meet the EU's green transition goals, the ECB estimates that the EU needs to mobilize additional investments ranging from 2.9% to 4.0% of GDP each year until 2030. Despite recent progress, current green investments in Europe fall short of the necessary levels to achieve the 2030 target of reducing carbon emissions by 55% compared to 1990 levels.
The ECB highlights that meeting this target will require significant investments to nearly double renewable energy capacity and further develop clean technologies. However, the report notes that green investments in the energy and transport sectors have been limited, hindered by technical barriers and the need to align with public infrastructure investments.
Additionally, the ECB points out that funding markets for innovation remain a small portion of European financial markets, despite recent growth. To accelerate the development of these markets, the ECB calls for faster progress in deepening the Capital Markets Union (CMU), an EU initiative aimed at creating a unified capital market across member states.
The report also underscores that high funding costs and insufficient fiscal support continue to impede corporate access to green investments.