How Sustainable Is the EU?

The EU's economic stimulus package in combination with the EU budget 2021-2027 (=€1.8 trillion €), are making it the largest financial package ever put together in the EU. It is designed to boost the economy during the COVID-19 pandemic and make it fit for recovery. At the same time, the financial support will be used to implement the Green Deal to tackle the climate crisis and build more sustainable, resilient societies and economies.

The 'EU Cash Awards' campaign by the Climate Action Network (CAN) Europe, a network of environmental organisations from across Europe, has now begun to examine the plans already on the table to see whether they are truly green or rather support measures that are harmful to the climate. To do so a traffic light system will be used: good = green, bad = yellow and ugly = red measures will be nominated until the end of April, when the three most outstanding projects will be awarded, according to Germanwatch, one of the campaign participating organizations.

It is already clear that many of the plans are flawed. Among them are elements of greenwashing or measures that miss the chance for real change. CAN Europe lists here, among others, missed opportunities for investment in a lower emission transport sector in Germany, France, Poland, Portugal, Slovenia and the Flemish region of Belgium.
In addition, once again investments in renewable energies and energy efficiency - despite the great potential - are missing in Germany, France, Bulgaria, the Czech Republic and Latvia. The French and Spanish investment plans to finance 'not-so-green hydrogen' also raise eyebrows.

The red light e.g. is on for measures aimed at promoting the use of fossil fuels such as oil, coal or gas. This includes the French blank cheque worth 2.5 billion € for oil and gas companies and carbon-intensive industries. Some Eastern European countries also prefer to invest in polluting waste incinerators or bailout packages for ailing airlines.

"Overall, the draft recovery plan so far falls well short of the financing needed to achieve the climate targets," Audrey Mathieu, EU climate policy officer at Germanwatch, sums up the German plans. "Apart from positive exceptions, such as the promotion of green hydrogen, the largest EU economy unfortunately does not set a good example at all: far too little support for building renovations, no funds for the preservation of biodiversity - in large parts, the draft deserves the verdict 'poor'." The purchase premium for plug-in hybrids even violates the 'Do No Significant Harm' principle, stating that no measure may harm humans and the environment. That's why our measure traffic light is currently dark yellow."

The French are also unhappy with how their government wants to spend the money: Neil Makaroff, EU Policy Officer at Réseau Action Climat France, said, "Stimulus packages are a unique opportunity to match investment with greater climate ambition and put Europe on the path to climate neutrality. Unfortunately, France's stimulus programme does not show leadership in green recovery and does not map out a plan for a resilient, climate-friendly future: €20 billion of the stimulus programme will be used for an unprecedented tax cut for France's biggest and therefore most polluting companies, while a limited amount will go directly to renovating the homes of the most vulnerable and poorest households."

However, there are also positive examples, such as from Estonia, where the Ida-Virumaa region wants to phase out oil shale combustion in the heating sector. Stimulus measures by the Polish government, such as the promotion of energy communities and energy efficiency in buildings, or planned investments by the Belgian region of Wallonia serve people and the climate.

The partners involved have presented ambitious plans for a cross-border European solution (Image: Ørsted)

Plans from the Netherlands and Belgium currently show how it can be done. The local industry, in cooperation with regional governments, is planning gigawatt-scale electrolysis with 'SeaH2Land' to connect the large industrial demand in the Dutch-Flemish North Sea port cluster through a regional cross-border pipeline. The green electricity needed to produce renewable hydrogen is to come from the expansion of additional offshore wind farms, which is why Ørsted has been brought on board. All that remains now is for the governments of the two countries to ensure the appropriate framework conditions.

Steven Engels, General Manager Benelux, Ørsted, explains the process: "SeaH2Land will help the Netherlands to accelerate its offshore wind build-out and to work towards its ambition of 3-4 GW electrolyser capacity by 2030. SeaH2Land offers the Netherlands and Belgium an opportunity to get closer to realising its 2030 climate goals by reducing carbon emissions in the industrial sector. Governments can help this flagship project by putting in place a dedicated support mechanism and renewable hydrogen programme coupled to offshore wind. This should support the necessary industrial scaling to bring down the cost of renewable hydrogen."

There will certainly be a green light for this project.