Eco-friendly investments ‘at core of new EU cohesion policy’

Out-Law News | 24 Jul 2014 | 5:25 pm | 1 min. read

More than €38 billion of EU financing is to be made available to support the transition to “a more environmentally-friendly economy”, through investments for energy efficiency and renewables, the European Commission has announced.

The EU’s sixth report on economic, social and territorial inclusion adopted by the Commission on 23 July (337-page / 16.9 MB PDF), said more than €38 billion in  ‘cohesion policy investments’ would be available from 2014-2020.

The Commission said financial support is more than double the €16.6bn invested in Europe’s low-carbon economy for 2007-2013, and will be focused on key areas such as energy efficiency and small and medium-enterprises (SMEs).

Investments under cohesion policy initiatives to date have already “cushioned the dramatic decline of public investment” across the region by boosting investments in a number of EU member states “and creating vital financial stability which serves to attract private investment”, the Commission said.

The Commission said that figures up to the end of 2012 showed investments to date had achieved “solid results”, leading to the creation of around 600,000 jobs, providing support to 80,000 new businesses, providing broadband access to some five million EU citizens and improving potable water supplies to more than three million people.

According to the report, “there is increased reliance on cohesion policy to finance growth-enhancing investment” as a result of cutbacks in member states’ national expenditure. In 2010-2012, cohesion policy funding was equivalent to 21% of public investment in the EU as a whole, the report said.

There is “clear evidence” that policies are producing tangible results, the report said. “Support had been provided to more than 60,000 research and technological development projects by the end of 2012, more than 21,500 cooperation ventures between enterprises and research centres and nearly 80,000 business start-ups.”

In terms of areas of potential investment in renewables, the report said the largest sources of renewable energy in the EU are biomass and hydropower, which in 2012 produced respectively around 83 and 25 million tonnes of oil equivalent (Mtoe), followed by wind power (17.7 Mtoe), biogas (12 Mtoe), solar energy photovoltaic (5.8 Mtoe) and geothermal (5.7 Mtoe).

However, the report said the ability to make full use of renewable energy potential also depends on the existing regional transmission, distribution and storage infrastructure, as well as the pattern of demand.

The report said: “Larger shares of renewable energy supply, which in many cases provides intermittent power, will require improved infrastructure and solutions for its effective integration into the network.”

EU regional policy commissioner Johannes Hahn said the cohesion policy is now effectively “Europe's investment arm... [and] has become a modern and flexible tool to target the different challenges Europeans face”.

Hahn said: “The days of huge subsidies for roads and bridges are becoming a thing of the past as many [EU] member states are closing their infrastructure gap. Investments focusing on innovation and green growth will create good lasting jobs and boost the competitiveness of our regions.”