Here is what ‘green’ economic recovery in the EU could look like

More than 1,000 climate-friendly projects could line up for a piece of the European Union’s post-coronavirus recovery package, as ministers begin to discuss the bloc’s 2021-27 budget and economic stimulus fund, according to research seen by the Reuters news agency.

EU leaders are meeting in Brussels on Friday to try to agree the budget and economic stimulus fund, which have been criticised this week by environmental think tanks for falling short of what is needed to meet the bloc’s current goal to cut greenhouse gas emissions by at least 40 percent against 1990 levels by 2030.

The EU Commission has proposed a 1.1 trillion euros ($1.25 trillion) budget plus a 750 billion euros ($855bn) recovery fund aimed at rebuilding economies most affected by the coronavirus pandemic. The Commission says the overall package will drive a recovery that boosts “green” industries and technologies, to reduce emissions of the greenhouse gases fuelling climate change.

Research reviewed by Reuters, before its publication in September, identified more than 1,000 green projects eligible for the recovery fund. The research, commissioned by the European Climate Foundation, was conducted by consultancy EY.

The projects would support more than two million jobs and require an investment of approximately 200 billion euros ($228bn), the research shows.

Shovel ready

These so-called “shovel-ready” projects – which could be ready for launch within two years if they receive financing – cover renewable energy, energy storage, building renovation, low-carbon transport, manufacturing of low-carbon technologies and more efficient industrial processes.

Examples include HYBRIT – a joint venture between steel company SSAB, mining firm LKAB and utility Vattenfall – to replace coking coal with fossil fuel-free hydrogen in steel production in Sweden which would need 1.5-2 billion euros ($1.7bn-$2.3bn), said Steve Varley, EY global vice chair for sustainability.

Another project is by Korean chemicals company LG Chem to develop a giga-factory to produce lithium-ion batteries for electric vehicles in Krakow, Poland.

A third scheme relates to the French government’s plan to renovate Paris buildings to make them more energy efficient, Varley said.

The 1,000 projects pinpointed represent only about 10 percent of green projects currently under development in Europe, EY said.

That means the entire EU pipeline of green projects could represent as much as 1 trillion euros ($1.1 trillion) in investment, and replace at least 12 million jobs lost during the pandemic, Varley said.

To identify which projects might be eligible for EU funding, EY interviewed businesses, stakeholders, officials and investors in each member state. It also examined planning applications and requests for funding.

About 30 percent of the projects highlighted by EY are being developed by start-ups and small and medium enterprises focusing on low-carbon mobility, green hydrogen and low-carbon construction materials.

More than 20 percent are small-scale, and require investments of up to 5 million euros ($5.7m).

EY said it will share the list of ready-to-invest projects shortly with member states preparing recovery plans.