The European Commission (EC) on Tuesday presented a plan to mobilise at least Euro 1 trillion (USD 1.13tr) of investments in the years through 2030 in support of its recently unveiled Green Energy deal that aims to make the bloc carbon-neutral.
The mechanism is set to run from 2021-2027, and is focused on providing support to those countries most financially and practically affected by the transition away from fossil fuels.
The bloc's executive arm says that half of the investment, which amounts to 1 trillion euros, will come from the European Union budget. National governments will contribute 100 billion euros and 300 billion euros will come from the private sector.
The Commission wants a quarter of its long-term budget spending to go on the Green Deal transformation, and is banking on EU member states and the European Parliament backing its plan.
Swedish lawmaker Pär Holmgren warned in a plenary debate on the plan that a lack of criteria on dedication to climate policies was sorely missing.
The Fund is to "benefit territories with high employment in coal, lignite, oil shale and peat production, as well as territories with carbon-intensive industries which will be either discontinued or severely impacted by the transition", the Commission proposal said.
The plan prioritizes investment to help coal-dependent countries like Poland transition to green energy.
The European Commission's executive vice president for the European Green Deal, Frans Timmermans, stated that "it will require more efforts from citizens, sectors and regions that rely more on fossil fuels than others", a gap at which the package is aimed at alleviating.
The fund will primarily provide grants to regions, including to support workers in developing skills and competences for the job market of the future as well as help small and medium-sized enterprises (SMEs), startups and incubators create new economic opportunities in these regions.
"One thing is the needs of a country and another thing is the capacity that the country has, both from the past but also at the moment, to solve its own problem without any specific help", she said. We are against the recycling of promises and money.
"We are not going to propose a new MFF (Multiannual Financial Framework) at all".
The Greens group in the European Parliament, meanwhile, rued the fact that the commission did not tie the money to a deadline for phasing out coal.
The EP goes wrong while the Earth burns, said the GUE/NGL after the majority of MEPs voted in favor of the European Commission proposal, which 'does not comply with substantial measures that match the severity of the climate crisis'.
The financial challenge for Europe is huge: the Commission estimates that halving Carbon dioxide emissions by 2030 would require 260 billion euros of investment a year in the energy, transport and construction sectors, above what is planned already.
According to an estimate by the Commission, an extra €260bn in investment will be needed per year to achieve the current 2030 goal, and cuts of at least 40% in greenhouse gas emissions.
Officials say member nations applying for financial support should present a detailed plan to Brussels on how they will slash emissions. To access this first pillar, regions need a transition plan.
Projects including nuclear power won't be eligible for funding, except for those related to Euratom's program for nuclear research and training.
'The EU commission is counting on billions of euros that are now not available, ' said Green EU lawmaker Sven Giegold, warning against using fictitious figures to save the climate.