EU's Green Funds Back Fossil Fuels as Climate Investments Lag

Climate investments in European Union (EU) stands “well below” the 842 billion euros needed to transition away from fossil fuels, revealed a report by the Institute for Climate Economics (I4CE) on June 3.  

The report underscored that the climate investments in the EU grew from 491 billion euros in 2022 to 498 billion euros in 2023 in the energy, buildings, transport and cleantech manufacturing sectors. However, this growth has been flat lining in recent years, leaving a 344 billion gap from the required target. The 27-nation EU is specifically lagging investments in wind power and building renovation.

The findings contrast with the signal sent by the European Commission, which last week declared the bloc on track to meet its 2030 target of slashing planet-warming emissions by 55% compared to 1990 levels, according to AFP. The commission's upbeat projection was based on the energy and climate plans drawn up by EU member states.

"It's easy to set goals, more difficult to implement the policies," cautioned Jean Pisani-Ferry, the I4CE's chair, at the report's launch in Brussels.

Wind power and energy renovations in older buildings are falling especially short, with investments at around one third of what is needed, the report added.

While solar power investments are reportedly on the right track, funding for wind energy and renovations in older buildings remains well below the required levels.

Green Investments Back Fossils

Meanwhile, another investigation by The Guardian and Voxeurop found that European “green” funds are still holding over $33 billion of investments in major oil and gas —despite fossil fuels being a key cause of the climate crisis.

Some of these investment funds used branding such as Sustainable Global Stars and Europe Climate Pathway to invest more than $18 billion in the five biggest polluters—TotalEnergies, Shell, ExxonMobil, Chevron and BP, according to 2023 Carbon Majors ranking for oil and gas production among shareholder-owned firms.

Other holdings included investments by in US fracking company Devon Energy and Canadian tar sands company Suncor, even though the funds comply with the EU sustainable finance disclosure regulations (SFDR).