EU plans multi-billion euro ‘green recovery’ but falls short in crucial areas

European Union flags in front of the Berlaymont building (European commission) in Brussels, Belgium.

European Commission proposals for a green recovery fund and new EU budget promise to provide the money needed to rebuild weakened economies – but environmental groups have warned some measures don’t go far enough and others are completely missing.  

 The EEB is Europe’s largest network of environmental NGOs with more than 160 members in 36 countries. 

Jeremy Wates, Secretary General of the European Environmental Bureau said:

“The Commission’s proposals represent an important step in the right direction. We are happy to see the European Green Deal described as ‘Europe’s recovery strategy’.
However, Wates warned that much more needed to be done to deliver on the EU’s Green Deal and that today’s proposals were far from perfect:

“The Commission’s proposals fail to address the enormous problem of toxic pollution, which is a major threat to our health. The part of the strategy on learning lessons from the crisis doesn’t even mention habitat destruction and biodiversity loss, which have been widely touted as leading causes of new diseases.”

The European Commission hopes to ensure that its corona recovery package – ‘Next Generation EU’ – delivers on the ambition of its European Green Deal, helping Europe to lead the world in climate and environmental action, creating millions of jobs, improving our health and protecting people against future outbreaks.

Wates continued:

“This is an historic chance to rebuild Europe, creating secure, new jobs and building more resilience to future crises. How we respond to the corona crisis will decide whether we build a healthier, greener future or continue a dangerous descent into climate breakdown, further loss of biodiversity and more harmful pollution. The future of Europe is at stake.”

European money will come in two tranches: through the front-loading of the new seven-year EU budget and in a separate, new Green Recovery Fund.

Despite accounting for less than 1% of the blocs GDP, the EU budget is the most important financial tool in the hands of EU institutions. Because of its political weight, it has the potential to drive further investments from municipalities, governments and the private sector.

NGOs, including the EEB, have been calling for an increase in climate and environmental funding from 20% to at least 50% of the overall budget and for all funds to be conditional on the achievement of green targets and standards. More than 1.6 million EU citizens have signed petitions calling for a healthy, just and green recovery.[1]

Patrick ten Brink, the EEB’s EU Policy Director, said:

“The EU budget must contribute to cutting harmful emissions at source and restoring a healthy balance with nature. It must reflect the need to extract less, save resources and cut pollution, in line with existing climate, biodiversity, circular economy, toxic-free water and air quality objectives and the EU’s zero pollution ambition.”

The Commission’s proposal will be discussed among the EU’s 27 governments in the coming weeks. A final agreement on the EU budget with the Commission and Parliament is expected by the end of the year or early next year.   

19 governments – including the so-called ‘Frugal Four’ of Austria, Denmark, the Netherlands and Sweden – have backed a statement calling for the European Green Deal to be made central to the EU’s Covid-19 recovery plans

Assessing the details of today’s proposals

Jump to:

Building Renovation
Renewables
Mobility
Circular Economy
Nature Restoration
Chemicals
Industrial Transformation
Economic Transformation

Building renovation

The situation: 
Ageing buildings are currently responsible for 36% of Europe’s total CO2 emissions, with a large part of the energy used in our homes going to waste due to poor insulation.
Domestic heating is also responsible for 45% of all PM2.5 pollution in Europe.
What the EEB has been calling for:
Hundreds of thousands of jobs could be created by renovating homes, schools, hospitals and offices to be more energy-efficient and to reduce their impact on air quality.
Energy efficiency, detoxification, decarbonisation and zero pollution heating must be the core of the strategy.
Solar power and heat pumps will play a central role. The cost of solar panels has fallen dramatically and rooftop units now generate more jobs per kilowatt hour than almost any other energy source. Heat pumps are the most promising technology to phase out fossil fuels from our home by taking advantage of renewable energies.
What the Commission has announced today: 
Building renovation was already a priority in the European Green Deal.
A wave of renovations will see old buildings upgraded with modern insulation, efficient and decarbonised heating and cooling systems, powered by locally-produced green energy. 
How much will it cost:
The European Commission says Europe’s ‘renovation wave’ could cost more than €250bn a year. Money would come from the EU budget as well as private investments and national subsidies to households and businesses. 
How good are the plans?
There is no proposal to create a dedicated financial tool to boost energy efficiency in buildings, which was most wanted. The general commitment to provide regulatory and financial support to double the renovation rate is too vague, as is the way 
Member States will use funds from the newly created “Recover and 
Resilience Facility”, based on European Semester mechanisms and NECPs.
Quote: 
Barbara Mariani, EEB senior policy officer for climate:
“Improving the energy systems of buildings will provide new quality jobs and cut greenhouse gas pollution, improving people’s quality of life and decreasing Europe’s dependency on the imports of materials and energy.”
Margherita Tolotto, EEB  clean air policy officer
“The renovation wave is a key moment to cut the harmful air pollution caused by heating systems. To protect our health and environment, it’s essential that EU investments only support the cleanest options”.
What to watch out for?
  • Investments in technologies or appliances with low environmental and energy standards
  • The promotion of combustion technologies, including biomass, that cause air pollution 
  • Toxic chemicals and materials such as flame retardants, PFAS, plastics, phthalates or heavy metals not being permitted for use in building materials. All materials should be toxic-free to be considered as sustainable.

Renewables

The situation:
In 2018, renewables accounted for almost 19% of energy consumed in the EU. The EU target for 2020 is 20%.
The Commission already planned to invest heavily in smart and local grids, storage capacity and the electrification of our distribution systems. However, funding continues to flow to fossil fuel infrastructure, despite the likelihood of creating stranded assets. 
What the EEB has been calling for:
Europe must build a safe and resilient energy system, by boosting renewable energy and electricity infrastructure. 
EU institutions and governments must divert funds from fossil fuel projects to renewables
Governments should justify any request for funds in their National Climate and Energy Plans, and explain how EU money will contribute to national climate neutrality targets.
What the Commission has announced today: 
Among the policy fundamentals of the recovery, the EC lists:
Rolling out renewable energy projects, especially wind, solar and kick-starting a clean hydrogen economy in Europe;
How much will it cost:
About €100bn a year could be spent on energy generation and transmission to help Europe meet its climate targets.
How good are the plans?
The Commission ambiguously talks of “clean” Hydrogen, avoiding both the widely-used colour code (green/blue/grey) and the definition of whether this hydrogen comes from renewable or is made from fossil fuels with the use of Carbon Capture and Storage (CCS). This is a big loophole given the focus on these technologies. 
Quote: 
Jonathan Bonadio, EEB policy officer for energy and grids:
“We have enough sun, wind and technology to decarbonise our energy system before 2050. What we lack is a coherent investment plan in energy networks and infrastructure that can produce, transport and store high quantities of renewable energy. Instead of wasting time and money on new gas infrastructure, we must invest in credible and truly green alternatives.”
What to watch out for?
Hydrogen. Only renewable hydrogen, produced via electrolysis using renewable energy is compatible with the energy transition. It’s essential that future availability and demand for hydrogen is assessed, before investments in infrastructure are made.
Fossil fuel subsidies. The proposal fails to address the elephant in the room, leaving the door open to more funds aimed at boosting fossil fuel use and infrastructure. 

Mobility

This table has been prepared together with our partners at Transport & Environment

Situation: 
Transport is the fastest growing single sector in Europe, with emissions up 30% since 1990 
What T&E has been calling for:
Multi-billion euro investment in cycling and walking, including a grant system so that cities can construct permanent safe cycling infrastructure and widen footpaths ASAP
EU financial support to transition to zero emissions road transport, notably emissions-free cars and vans, with focus on  zero emission taxis, fleets, ride hailing and car sharing
Multi-billion euro support scheme for zero emission buses, plus more charging points for cars, vans, trucks and buses
Electrification of docks and port infrastructure, support for supply chains such as batteries and green hydrogen and worker reskilling 
Support to multimodal transport and increasing train share with a portion of CEF Digital budget to go to modernising public transport: high-speed internet onboard, better multimodal ticketing and real-time passenger information
What the Commission has announced today: 
See Transport & Environnement’s full reaction at: https://www.transportenvironment.org/press
What to watch out for?
  • Public support to emissions-free cars vs fossil technologies, especially for fleets 
  • A plan to reduce the total number of cars in Europe
  • Support for cities on electrifying buses, their fleets and providing charging infrastructure 
  • Affordability of alternatives, including trains
  • Clear set of requirements on spendings to assess contribution to existing air quality, environmental and climate objectives. 
  • Money to rebuild urban space for people

Circular Economy

Situation: 
The EU consumes more than its fair share of natural resources – the same as if we had almost three planets available to support our consumption
The EU’s material footprint amounted to 14 tonnes per capita in 2017, and its circular material use rate is around 11% showing no significant improvement in the last half a decade.
The Commission estimates that investing in better waste management alone could result in hundreds of thousands of new jobs. In 2017, employment in the waste sector reached 1.15 million jobs across the EU.
What the EEB has been calling for:
A circular economy, where waste is prevented and materials recycled, will be essential in securing new jobs and delivering savings to consumers and businesses. 
Investments to prioritise repair, second-hand and refurbishing sectors, in line with the waste hierarchy
A focus on the development of business models which prioritise local production and innovative technologies – such as 3D printing for spare parts and repairs – leading to more sustainable consumption patterns.
Toxic-free material loops and transparency on the chemicals content on materials, products and waste.
What the Commission has announced today: 

While not giving full details on investments, the Commission proposes to scale up investments in recycling and puts forward an EU-wide tax on non recycled plastic packaging – the first of its kind. 

More details about the Commission’s plans were revealed in a leaked document last week. That included unprecedented support for the recycling industry at the expense of efforts to cut resources use and waste.

How much will it cost:
The investment gap to improve the reuse and recycling of all waste could be as large as €10bn a year, according to the Commission’s staff working document.
How good are the plans?
We welcome the idea to support the recycling industry and introduce a tax on plastics, but a tax focusing exclusively on non recycled plastic packaging reflects an outdated understanding of what circular economy means. It would be more appropriate to set a tax on virgin plastic use, which would help prevent resource use and waste, beyond recycling.
Quote: 
Stephane Arditi, policy manager for the circular economy at the EEB:
“Europe has already put forward the world’s most ambitious strategy to reduce waste. Now our leaders must secure enough investments to finance it. But we must go beyond recycling and move towards business and consumption models which support the right of consumers to repair and use everyday products for longer.”
What to watch out for?
The Commission may be right in supporting the plastic recycling industry, which is suffering from the implications of the Covid-19 crisis and low oil prices. However, prevention, reuse and repairs should be the main priority, not recycling. The potential in terms of job creation could be even higher in these sectors. It’s also concerning that the Commission shows little support for the decontamination of products and materials, failing to highlight investments aimed at preventing toxic recycling.

Food

The situation:
The CAP has accounted for 52% of the Commission’s climate spending over the last six years, and yet agriculture is the only sector to have increased emissions since 2012. 
Greenhouse gas emissions from agriculture could be reduced by 40% by mainstreaming agroecology and adopting healthier diets.
The agriculture sector is already the recipient of the single largest share of the EU budget (36% since 2014) with the Common Agricultural Policy costing €60bn every year
What the EEB has been calling for:
EU funds to support the production of better food from healthy farms . 
Local food production with short supply chains and diversified production at farm and landscape level to secure our food supply and create more permanent jobs in rural areas. 
EU agriculture funds conditional on the achievement of climate, environmental, air  and societal targets, and redirected to support farmers in need. 
A shift away from the intensive production model with a system-wide change to agroecology.
A swift reduction of air pollution from agriculture: which contributes to ground-level ozone (through methane), secondary PM 2.5 emissions (through ammonia) and to primary PM emissions (through agricultural waste burning).
What the Commission has announced today: 
 The Commission is proposing to reinforce the budget for the European Agricultural Fund for Rural Development by 15bn with the view to support the earlier announced green objectives in the new biodiversity and Farm to Fork strategies
How good are the plans?
The CAP is the EU’s sacred cow and is defended by powerful agroindustry lobbyists in Brussels. Yet hope has emerged in the form of the EU’s Farm to Fork strategy, which seeks significant cuts to fertiliser and pesticide use and sets a target of 25% of EU farms being organic by 2030. The decision to fund the most effective policy instruments under pillar 2 of the CAP is a good signal, but payments to intensive farming that harm the environment have been left untouched.
Quote: 
Berenice Dupeux, EEB senior policy officer for agriculture:
“Today the Commission decided to maintain Pillar 2 of the CAP at its current level and not to reinforce it, indeed Pillar 2 experienced the largest cut in past proposals. While Pillar 2 is known to be more result-oriented, by negotiating the budget before the actual policy, there is no guarantee it will finance a green recovery for the farmers nor that it will deliver on the Farm to Fork and Biodiversity strategies.” 
What to watch out for?
Proposals to provide additional funding for industrial agriculture, which is the biggest cause of biodiversity loss in Europe

Nature restoration

The situation:
Europe’s nature is degraded across much of the continent, impacted by factors such as infrastructure construction, intensive agriculture and forestry. 
Areas of Europe where nature is relatively intact are frequently small-scale and isolated, which often leads to a further decline in biodiversity. This diminishes the functions and benefits those ecosystems could and should be providing.
What the EEB has been calling for:
The large-scale restoration of ecosystems to help mitigate and adapt to climate change and bend the curve of biodiversity loss.
Legally binding restoration targets across the EU. At least 15% of land and sea areas should be restored, with a specific focus on carbon-rich ecosystems such as peatlands, floodplains, wetlands, old growth forests, biodiversity rich grasslands, seagrass beds and kelp forests
The set of maps co-authored by EEB and partners can help identify priority areas for landscape-scale nature restoration across the EU to deliver critical new connectivity between Europe’s Natura 2000 sites
What the Commission has announced today: 
In the recently adopted EU Biodiversity Strategy for 2030, the European Commission committed to propose new legally binding restoration targets in 2021 subject to the impact assessment. It has also announced 20bn euro per year from the EU funds for nature protection and restoration and 10bn for nature from InvestEU.
However, there seems to be no mention of the 20bn per year in today’s communication on the EU budget, unless it is included between the lines. In its Recovery Plan, the European Commission recognized that protecting and restoring biodiversity and natural ecosystems is key to boosting our resilience and preventing the emergence and spread of future outbreaks, however, it has committed to mobilise €10bn over the next 10 years under InvestEU, consistent with the commitment in the EU Biodiversity Strategy.
How much will it cost:
Large-scale nature restoration would create jobs and cost more than €120bn over the next seven years from various public and private funding sources
This will need to be in addition to €15bn a year that are needed for management of the Natura 2000 network.
How good are the plans?
Unless it is hidden between the lines, today’s plans do not seem to support the commitment that the European Commission made only one week ago in its flagship EU Biodiversity Strategy to allocate 20bn euro per year from EU budget for nature protection and restoration and which was tooted to serve as a central plank for EU recovery plan.
Quote: 
Sergiy Moroz, policy manager for water and biodiversity: 
“The coronavirus has taught us how important it is to listen to scientists and heed their warnings and scientists have been warning about the threat posed by biodiversity loss to our own survival for decades. Restoring and giving land back to nature can go a long way in addressing the twin crises of climate breakdown and biodiversity collapse at the same time creating jobs to help us recover from the economic crisis. Unfortunately, the European Commission budget proposal failed to explicitly earmark EU funding for direct investment in nature.
What to watch out for?
The EU Budget communication does not include explicit earmarking for funding for direct investment in nature despite the commitment to allocate 20bn per year for nature protection and restoration from EU funds in the EU Biodiversity Strategy.

Chemicals

The situation:
Chemicals of concern are ubiquitous in the food we eat, the water we drink, in our homes, at work and in our environment. Every new-born baby is now born ‘pre-polluted’ with a cocktail of industrial chemicals; toxic and even banned chemicals are frequently present in the products we use every day, while chemical pollutants are detected in the most remote and unexpected parts of the planet, from the deepest oceans to the highest mountains.
Chemical pollution negatively impacts our economy. For example, in the EU, the cost alone of human exposure to endocrine disrupting chemicals – a diverse group of substances which can disrupt the hormonal system – has been estimated at 157 billion per year
The cost of work-related cancers is estimated to be between €270 and €610 billion each year – or between 1.8% and 4.1% of the EU’s annual gross domestic product.
What the EEB has been calling for:
Allocate the necessary resources to the implementation and enforcement of chemicals and products regulation and use of every available means to obtain such commitments by the Member States.  
Fund a harmonised legallybinding requirement for full disclosure of substances present in materials, articles, products and waste and financially support ECHA to finalise and maintain the SCIP database and ensure it is useful for consumer and waste managers.
Ensure the required resources, technical support and coordination to promote substitution of hazardous chemicals.
Ensure needed funds by applying the polluters pays principle:  raise money for EU authorities and agencies to monitor, regulate, and manage chemicals by applying this fundamental principle. 
What the Commission has announced today: 
The proposal fails to mention investments towards a toxic-free environment. 
How good are the plans?
The proposal fails to mention investments towards a toxic-free environment. 
Quote: 
Tatiana Santos, EEB chemicals policy manager said: 
“Surveys show that around two-thirds of European citizens are concerned or very concerned about their exposure to chemicals in everyday products. Despite mounting evidence on the need for an ambitious EU budget to deliver a non-toxic economy, the Commission has missed an opportunity to radically scale and speed up funding to protect its citizens and ecosystems, and to set Europe on the road to a non-toxic and healthy future.
What to watch out for?
Much more action is required on chemicals in the coming months and years! 

Industrial transformation

The situation:
Europe must decarbonise its economy by 2040 to be compatible with the IPCC’s scenario of 1.5 degrees.
The production of cement, chemicals, ammonia and steel currently account for 14% of Europe’s total CO2 emissions.
What the EEB has been calling for:
The establishment of an independent observatory to advise on priority infrastructure and targets for the industrial transformation. 
Finance, policy and investments that drive change, with the full exclusion of fossil fuels from public investments and phase out of coal from all industrial productions. 
A plan to build a 100% renewable energy system
Sustainability along the value chain.
More details in our recent report: Industrial Transformation for a More Resilient Future  
What the Commission has announced today: 
These include the Strategy for Smart Sector Integration, the Renovation Wave Strategy will be delivered as foreseen in 2020, with no delays 
“A new Recovery and Resilience Facility of €560 billion will offer financial support for investments and reforms, including in relation to the green and digital transitions and the resilience of national economies, linking these to the EU priorities”
How good are the plans?
Still not clear if and what kind of conditionality will apply. We welcome the frame that the Commission has given to the recovery action, aimed to promote the EU green deal objective of sustainability and digitalisation target.
Quote: 
Davide Sabbadin, EEB policy officer for climate and circular economy: 
We welcome the Commission’s confirmation that ‘renovation wave and Smart Sector Integration will be delivered in 2020, as these two pieces of legislation will play a critical role in the promotion of the market for clean materials, and create the basis for decarbonising heavy industries.
What to watch out for?
Embedded emissions and the environmental criteria applied to materials used, in the renovation wave’

Economic transition

The situation:
The European Union and most countries elsewhere in the world are still assuming that decoupling environmental pressures from gross domestic product (GDP) allows for future economic growth without end. Yet the decoupling myth has been largely debunked.
The EU, and most Member States still believe in unfettered growth of global trade as inherently good, with merely the need for some social and environmental corrections. This view is in contradiction with the need to significantly reduce the amount of resources consumed by the global economy, which must become more circular.
What the EEB has been calling for:
To achieve carbon neutrality through a just ecological transition that embraces sufficiency, the EU will have to move beyond economic growth towards a post-growth economy that works for people and the planet. 
To limit environmental pressures by reducing the absolute amount of resources used and the associated impacts on the environment in order to solve the existential threats that come from the degradation of our living environment.
More details in our policy paper. 
What the Commission has announced today: 
“We will strengthen our strategic autonomy while preserving the benefits of an open economy. We will support our partners around the world and lead a renewed and reinvigorated form of multilateralism the world needs.”  + “Europe must enhance its strategic autonomy in a number of specific areas, including in strategic value chains and reinforced screening of foreign direct investment.”
the Commission is proposing to provide substantial additional funding of EUR 30 billion for the Just Transition Fund, bringing the total to EUR 40 billion. This funding will be used to alleviate the socio-economic impacts of the transition towards climate neutrality in the regions most affected, by for example supporting the re-skilling of workers”
How much will it cost:
€40bn will be invested in the Just Transition fund alone
How good are the plans?
Calls for enhancing the EU’s strategic autonomy and screening foreign direct investment are welcomed. This should lead to a serious investigation into trade deals that weaken strategic autonomy and overprotect foreign direct investors. Not clear if the EC is ready for that.
The boost for the Just Transition Fund is very welcome. Re-skilling of workers in climate damaging sectors like aviation or coal is very timely. Promoting jobs in circular economy practices (maintenance, repair) gives people the opportunity to contribute to the building of a climate neutral Europe.  
The switch from going for GDP growth to going for wellbeing growth has not yet been made This is a missed opportunity to join the growing wave of wellbeing budgets being made.
Quote: 
Nick Meynen, EEB policy officer for environmental and economic justice: 
European citizens want wellbeing to take higher priority than GDP, but the word wellbeing was not even mentioned in today’s announcement. The EU needs to reduce its structural dependencies on GDP growth and begin a fundamental reorientation of its priorities.
What to watch out for?
A return to “business as usual”. Wellbeing should be prioritised over GDP growth. In the wake of the Covid-19 crisis, China decided to not set a target for GDP growth for the first time in recent history. Several countries are making wellbeing budgets. 
The green recovery plan also does not include strict environmental and social conditions for access to funding for socially and environmentally harmful industries (such as car companies). We cannot repeat the mistakes after the financial crisis in 2008 by predominately providing access to large carbon intensive industries and companies without environmental conditions. 

Notes: 

[1] For the three petitions see:

The European Commission’s communication: https://ec.europa.eu/commission/presscorner/detail/en/ip_20_940

For more information:

Anton Lazarus

Communications Manager

anton.lazarus@eeb.org

+3222708818