The race for medals and world records begins again in Paris this Friday. However, it is not just the athletes who are aiming for top scores at the Summer Olympics. The organizers have also set ambitious goals for themselves: Paris wants to host the most sustainable Olympics ever. Lisa Kuner and Lukas Scheid have taken a critical look at this promise. From air conditioning systems to transportation infrastructure, they find some aspects that will be less green than initially hoped for or even possible. But overall, the two give the organizers a very positive rating.
The climate crisis set a first world record on Sunday and another on Monday. Both days were the hottest ever recorded anywhere in the world. The last time the record was set was in two El Niño years, 2023 and 2016. But since April, the world has been moving out of the El Niño climate pattern.
To avoid ever-new record levels, the use of fossil fuels must be reduced quickly. The oil and coal producer Colombia wants to accelerate this change. In an interview with Alexandra Endres, Colombia’s Environment Minister Susana Muhamad explains why the fossil fuel phase-out is so difficult and how Germany could better support the country.
It will be the greenest Games ever. Michael Mronz, member of the International Olympic Committee (IOC), said in the podcast Table.Today the Olympics are to be more sustainable and inclusive than ever before. But when the world looks to Paris, there could be some surprises. Paris wants to set new standards. But there are some doubts about the promises.
Nowadays, large sporting events are seen in a critical light. On the one side, they are supposed to bring people from all over the world together, but on the other, they strain the environment and the climate. There are plenty of negative examples of Olympic sports venues that are left derelict after the Olympics. For the 2024 Olympic Games, Paris has set itself the goal of not leaving such a heavy burden and wants to host the “greenest Games.” Ideally, the Games should also make all of Paris greener – the city has started to reduce parking spaces, convert the areas into greenery, expand bicycle lanes and introduce speed limits. A prestige project: Paris mayor Anne Hidalgo wanted to ensure that the Seine would be clean enough to host triathlons and open water swimming competitions. The limit values for this have recently been met. “A clean Seine would be a great legacy of the Games for Parisians,” says Walker J. Ross, who researches sports ecology at the University of Edinburgh.
When it comes to climate action, Benja Faecks from the NGO Carbon Market Watch believes it is important that the organizers have set a carbon budget for the Games for the first time: 1.58 million tonnes of CO2e. This would be roughly half the emissions of the previous Games in Rio 2016 (3.6 million tons) and London 2012 (3.3 million tons). One way of achieving this is that 95 percent of the sports venues have already been built or are only temporary. According to the organizers, new buildings will continue to be used. Catering will be eco-friendly and disposable plastic will be banned.
All other emissions (including Scope 3) will be offset via the provider Abatable. To this end, Abatable plans to invest in six high-impact climate action projects:
So much for the plans, but the reality is not quite so positive: The organizing committee has come under fire for wanting to use 500 fuel cell cars and ten hydrogen buses to transport athletes and visitors. In an open letter, 120 researchers and engineers wrote to the International Olympic Committee (IOC) that a hydrogen car is “scientifically misaligned with net-zero.” According to the authors of the letter, hydrogen-powered vehicles require three times as much electricity as electric cars and therefore generate three times as much carbon emissions.
A somewhat polemic discussion was also caused by the organizers’ plan to use a geothermal cooling system instead of air conditioning in the Olympic Village. With the prospect of possible record temperatures during the Games in Paris, various delegations protested. The United States announced it would bring its own air conditioning systems for its athletes. The organizers then backpedaled and agreed that portable air conditioning systems could be ordered at the teams’ expense – around 2,500 such systems have been reserved.
There has also been criticism of the lack of measures to achieve the organizers’ goals. The NGO Carbon Market Watch and the French think tank Éclaircies analyzed the climate and environmental measures of the Games in advance. Benja Faecks from Carbon Market Watch emphasizes: “The biggest factor is the size of the Games.” The large number of visitors, who often travel by plane, is one of the decisive factors. And the reduction of the Games’ transport emissions (around a third of the total CO2 budget) would hardly be visible. According to Faecks, significant efforts have been made to come up with plans for sustainable catering, despite it only accounting for around one percent of emissions. “The wrong priorities are being set and the elephant in the room is being ignored.”
Ross is somewhat more optimistic. Due to the ideal location in the heart of Europe, there is a chance that many people will travel sustainably. The British team, for example, travels to Paris by train. Nevertheless, Ross believes that the claim of the “most sustainable Games ever” is exaggerated: The first, much smaller Games in 1894 certainly caused fewer emissions.
Furthermore, emissions not saved will be offset by emission credits on voluntary carbon markets (VCM). However, this offsetting has so far been inadequately regulated. There is also a risk that offsetting projects will not deliver on their promised carbon compensation – for example, by incorrectly calculating the captured emissions.
There is also criticism of the amount of plastic waste generated during the Games and the involvement of the main sponsor, Coca-Cola. The NGO France Nature Environnement (FNE) accused Coca-Cola of being “deceptive” by filling drinks from recycled plastic bottles into reusable plastic cups. Faecks adds that the business model of most sponsors is based on fossil fuels.
The Paris Olympics will probably be the greenest Games in a long time, but it will still produce enormous amounts of climate-damaging greenhouse gases. Faecks says: “From an emissions perspective, the most sustainable alternative would, of course, be not to hold the Games.” However, instead of abolishing the Games, she wants to take a critical look at them and sees the efforts in Paris as an essential step towards greater sustainability. Ross acknowledges that the Olympics have a certain “gigantism.” Nevertheless, he believes that Paris has made an honest attempt to make the Games as sustainable as possible. If the example sets a precedent and the next Games in Los Angeles in 2028 or Brisbane in 2032 also follow suit and further refine their environmental concepts, Paris could be an important showcase for climate action.
Madam Minister, Colombia’s economy relies on oil and coal exports, yet your government wants to phase out fossil fuels. Has a phase-out date been set?
Our policy does not have an exact end date, but it will probably take around 15 years to complete the phase-out. We don’t just want to change Colombia’s energy supply, but the entire economic model. To do this, we need to replace the state revenues that have so far come from coal and oil and open up other sources of foreign currency. To achieve this, we are pursuing a national policy of re-industrialization with the aim of developing other promising economic sectors.
Which sectors?
Renewable energies to meet Colombia’s needs and for export, agriculture and nature-based tourism. Conserving biodiversity is becoming increasingly important. Our policies must initiate the transformation, even if we cannot yet give an exact end date. If the world fulfills the Paris Climate Agreement, the fossil fuel markets will gradually close anyway.
Your government, under President Gustavo Petro, has been in office for two years. What progress have you made, for example, through legislation?
There is a draft law to convert our main oil company Ecopetrol (editor’s note: Ecopetrol is 88.49 percent state-owned) into a producer of renewable energies. It still has to go through parliament. Under the Petro government, 23 new environmental licenses for renewable energy projects – wind and solar energy and power lines to distribute them – have also been awarded. One of the most important lines, La Colectora, is of key strategic importance. It will feed the renewable energy generated in the Department La Guajira into the national grid – but the project has been on hold for five years. It has now received environmental approval. We want to increase the share of renewable energy in domestic energy production from the current four or five percent to 25 percent by 2029.
Countries like Germany have a strong interest in Colombia’s raw materials, such as nickel or hydrogen. How big is the risk that the old extractivism will merely be replaced by a similarly harmful, green variant?
The risk is quite clear. The raw materials are the dark side of decarbonization. However, the German government is working on environmental and social standards for hydrogen imports. And Colombia is working on reforming its mining law. In the future, the federal authorities, along with the regions and municipalities, will determine the environmental and social conditions for mining projects and clearly define what benefits these projects should bring to local people. Then, the companies that want to invest will know precisely under what conditions they can do so.
If the Colombian state is to become stronger, it also requires more money. Where will it come from?
For countries like ours, which are heavily indebted, have to pay high interest rates to access capital and are very dependent on oil and coal revenues, the transition is very complicated. In order to replace fossil revenues, we not only have to restructure the energy supply but also the entire economy. We cannot do this alone. That’s why we are working at a multilateral level to bring different countries together as partners in a large investment package.
Who are these partners?
We are talking to the USA, Germany and Norway. We have also proposed to the G7 that Colombia should be one of the first countries to receive financial aid from the international community for the green transformation of its economy.
How is cooperation with Germany in the energy sector progressing?
We greatly appreciate the joint projects with Germany to date, as well as Germany’s support for the peace process. But now is the time to move to a more structured relationship. In the energy sector, we are already working on this with the development of green hydrogen. We are also working towards a debt-for-nature swap. It would be an important signal that ambitious countries like Colombia are supported through very strong cooperation. At present, we tend to be punished for our climate ambition – and no country will put its economy and people at risk for a transition that requires a global effort.
The USA primarily relies on private capital for these development steps via voluntary carbon credits. What do you think of this?
In Colombia, we need public investment above all, which can then provide incentives for private investment. Of course, private investment is needed. But they must follow clear rules to be truly sustainable. Credits are only one instrument. They can fund a tiny part of a much more comprehensive and complex transition. We need allies willing to invest with us in the long term in developing new labor markets, technological capacities and social issues.
Susana Muhamad, political scientist and Colombian Environment Minister, is a member of the Colombia Humana party led by President Gustavo Petro. During Petro’s term as mayor of Bogotá, she was Minister of the Environment and later city councilor.
In 2016, former European Commission President Jacques Delors said that if EU policies “jeopardize cohesion and sacrifice social standards,” then “the European project has no chance of winning the support of European citizens.” In the wake of this month’s European Parliament election, Delors’s observation seems more pertinent than ever.
Following the far right’s sizable gains, the new European Parliament is expected to prioritize issues like immigration, security, and the ongoing cost-of-living crisis over climate change. Given the number of incoming MEPs opposing the bloc’s green agenda, the European Union may also be forced to slow its net-zero transition.
But instead of changing course, the EU should double down on its climate goals and take a page from the playbooks of China and the United States. In particular, it should emulate US President Joe Biden‘s Inflation Reduction Act (IRA) by creating a “buy green and European” program and a European Industrial Development Fund (EIDF) to support its clean-energy transition.
One of the far right’s most popular arguments against the energy transition is that the European Green Deal relies heavily on inputs from China and the US. EU imports of clean-tech products from China have skyrocketed in recent years, totaling 23.3 billion for lithium-ion batteries, 19.1 billion for solar panels, and 14.5 billion US dollars for electric vehicles (EVs) in 2023 alone.
By contrast, the IRA dramatically increased America’s investment in renewable energy. In the second quarter of 2023, for example, the US invested nearly 10 billion US dollars in battery-manufacturing technology, more than double its total investment in batteries, solar and wind power, critical materials, and EVs in the second quarter of 2022.
In the face of greater global competition, the EU economy finds itself in a double bind. On one hand, its most dynamic companies are investing in the US rather than in Europe. On the other hand, exports from China to the EU are increasing, especially following Biden’s latest tariffs on Chinese goods.
One might expect that a more nationalist European Parliament would improve the outlook for the EU’s industrial sector. But share prices for leading European renewable-energy companies like Vestas, Nordex, and Orsted declined the day after the election, owing to fears that the far right’s gains could delay the green transition.
To shore up the EU’s competitive position, policymakers must act decisively to support critical industries. More than 1,200 organizations, including 840 leading manufacturing companies, recently signed the Antwerp Declaration – which calls for a “European Industrial Deal” as a key part of the EU’s strategic agenda for 2024-29. Belgian Prime Minister Alexander De Croo put it best, “How do we continue to grow our European industry? The answer is: with a European Industrial Deal at the same level as a European Green Deal.”
Four steps in particular are necessary. First, European policymakers must recognize that slowing the net-zero transition will erode the EU’s global competitiveness. Adopting zero-emission technologies is the best way to reduce fossil-fuel imports and achieve energy self-sufficiency. By contrast, maintaining the status quo undermines the bloc’s energy security strategy and plays into Russian President Vladimir Putin’s hands.
Second, establishing the EIDF is crucial to achieving energy independence and technological sovereignty. As the implementation of pan-European financial aid during the COVID-19 crisis showed, EU institutions can make critical decisions and act on them within months when necessary.
Third, the EIDF should be financed through common debt issuances. To boost the production of green technologies such as electric vehicles, heat pumps, and photovoltaic panels, this funding mechanism should be easily accessible to entrepreneurs without excessive eligibility requirements. Crucially, the EIDF cannot succeed without adequate financing tools for renewable-energy companies in the EU – a benefit that US companies already enjoy under the IRA. But policymakers should make such funding conditional on investments in production capacity and job creation in specific industries.
Lastly, the issuance of common debt should be accompanied by a concerted effort to identify new revenue sources. One option is to impose additional import tariffs on Chinese EVs. Another approach is to tax digital platforms and plastic imports.
Historically, EU funds were allocated according to the bloc’s cohesion policies and member states’ GDP per capita. But the NextGenerationEU fund, established in 2020 to help European countries recover from the pandemic, set a new precedent by allocating 800 billion euros (858 billion US dollars) in grants and loans according to the impact of COVID-19 on individual economies.
Similarly, EIDF funds should be allocated based on the needs of domestic industries and the contribution of each sector to its respective member state’s GDP. Consequently, most funds should go to countries with relatively large industrial sectors, such as Germany, Italy, Spain, France, Poland, the Netherlands, Ireland, and Belgium.
Although this approach may face resistance from other member states, it is crucial to facilitating Europe’s industrial revival. To remain competitive in today’s global economy, the EU must accelerate its net-zero transition. The EIDF is a necessary step in that direction.
Marcin Korolec, Poland’s former environment minister, is Director of the Warsaw-based Green Economy Institute and Chairman of the Foundation for the Promotion of Electric Vehicles. He is a member of the European Investment Bank’s Advisory Committee on the Environment and Climate and a board member of the Institute for Sustainable Development and International Relations (IDDRI), MevaEnergy, InnoEnergy, and Transport & Environment.
The race for medals and world records begins again in Paris this Friday. However, it is not just the athletes who are aiming for top scores at the Summer Olympics. The organizers have also set ambitious goals for themselves: Paris wants to host the most sustainable Olympics ever. Lisa Kuner and Lukas Scheid have taken a critical look at this promise. From air conditioning systems to transportation infrastructure, they find some aspects that will be less green than initially hoped for or even possible. But overall, the two give the organizers a very positive rating.
The climate crisis set a first world record on Sunday and another on Monday. Both days were the hottest ever recorded anywhere in the world. The last time the record was set was in two El Niño years, 2023 and 2016. But since April, the world has been moving out of the El Niño climate pattern.
To avoid ever-new record levels, the use of fossil fuels must be reduced quickly. The oil and coal producer Colombia wants to accelerate this change. In an interview with Alexandra Endres, Colombia’s Environment Minister Susana Muhamad explains why the fossil fuel phase-out is so difficult and how Germany could better support the country.
It will be the greenest Games ever. Michael Mronz, member of the International Olympic Committee (IOC), said in the podcast Table.Today the Olympics are to be more sustainable and inclusive than ever before. But when the world looks to Paris, there could be some surprises. Paris wants to set new standards. But there are some doubts about the promises.
Nowadays, large sporting events are seen in a critical light. On the one side, they are supposed to bring people from all over the world together, but on the other, they strain the environment and the climate. There are plenty of negative examples of Olympic sports venues that are left derelict after the Olympics. For the 2024 Olympic Games, Paris has set itself the goal of not leaving such a heavy burden and wants to host the “greenest Games.” Ideally, the Games should also make all of Paris greener – the city has started to reduce parking spaces, convert the areas into greenery, expand bicycle lanes and introduce speed limits. A prestige project: Paris mayor Anne Hidalgo wanted to ensure that the Seine would be clean enough to host triathlons and open water swimming competitions. The limit values for this have recently been met. “A clean Seine would be a great legacy of the Games for Parisians,” says Walker J. Ross, who researches sports ecology at the University of Edinburgh.
When it comes to climate action, Benja Faecks from the NGO Carbon Market Watch believes it is important that the organizers have set a carbon budget for the Games for the first time: 1.58 million tonnes of CO2e. This would be roughly half the emissions of the previous Games in Rio 2016 (3.6 million tons) and London 2012 (3.3 million tons). One way of achieving this is that 95 percent of the sports venues have already been built or are only temporary. According to the organizers, new buildings will continue to be used. Catering will be eco-friendly and disposable plastic will be banned.
All other emissions (including Scope 3) will be offset via the provider Abatable. To this end, Abatable plans to invest in six high-impact climate action projects:
So much for the plans, but the reality is not quite so positive: The organizing committee has come under fire for wanting to use 500 fuel cell cars and ten hydrogen buses to transport athletes and visitors. In an open letter, 120 researchers and engineers wrote to the International Olympic Committee (IOC) that a hydrogen car is “scientifically misaligned with net-zero.” According to the authors of the letter, hydrogen-powered vehicles require three times as much electricity as electric cars and therefore generate three times as much carbon emissions.
A somewhat polemic discussion was also caused by the organizers’ plan to use a geothermal cooling system instead of air conditioning in the Olympic Village. With the prospect of possible record temperatures during the Games in Paris, various delegations protested. The United States announced it would bring its own air conditioning systems for its athletes. The organizers then backpedaled and agreed that portable air conditioning systems could be ordered at the teams’ expense – around 2,500 such systems have been reserved.
There has also been criticism of the lack of measures to achieve the organizers’ goals. The NGO Carbon Market Watch and the French think tank Éclaircies analyzed the climate and environmental measures of the Games in advance. Benja Faecks from Carbon Market Watch emphasizes: “The biggest factor is the size of the Games.” The large number of visitors, who often travel by plane, is one of the decisive factors. And the reduction of the Games’ transport emissions (around a third of the total CO2 budget) would hardly be visible. According to Faecks, significant efforts have been made to come up with plans for sustainable catering, despite it only accounting for around one percent of emissions. “The wrong priorities are being set and the elephant in the room is being ignored.”
Ross is somewhat more optimistic. Due to the ideal location in the heart of Europe, there is a chance that many people will travel sustainably. The British team, for example, travels to Paris by train. Nevertheless, Ross believes that the claim of the “most sustainable Games ever” is exaggerated: The first, much smaller Games in 1894 certainly caused fewer emissions.
Furthermore, emissions not saved will be offset by emission credits on voluntary carbon markets (VCM). However, this offsetting has so far been inadequately regulated. There is also a risk that offsetting projects will not deliver on their promised carbon compensation – for example, by incorrectly calculating the captured emissions.
There is also criticism of the amount of plastic waste generated during the Games and the involvement of the main sponsor, Coca-Cola. The NGO France Nature Environnement (FNE) accused Coca-Cola of being “deceptive” by filling drinks from recycled plastic bottles into reusable plastic cups. Faecks adds that the business model of most sponsors is based on fossil fuels.
The Paris Olympics will probably be the greenest Games in a long time, but it will still produce enormous amounts of climate-damaging greenhouse gases. Faecks says: “From an emissions perspective, the most sustainable alternative would, of course, be not to hold the Games.” However, instead of abolishing the Games, she wants to take a critical look at them and sees the efforts in Paris as an essential step towards greater sustainability. Ross acknowledges that the Olympics have a certain “gigantism.” Nevertheless, he believes that Paris has made an honest attempt to make the Games as sustainable as possible. If the example sets a precedent and the next Games in Los Angeles in 2028 or Brisbane in 2032 also follow suit and further refine their environmental concepts, Paris could be an important showcase for climate action.
Madam Minister, Colombia’s economy relies on oil and coal exports, yet your government wants to phase out fossil fuels. Has a phase-out date been set?
Our policy does not have an exact end date, but it will probably take around 15 years to complete the phase-out. We don’t just want to change Colombia’s energy supply, but the entire economic model. To do this, we need to replace the state revenues that have so far come from coal and oil and open up other sources of foreign currency. To achieve this, we are pursuing a national policy of re-industrialization with the aim of developing other promising economic sectors.
Which sectors?
Renewable energies to meet Colombia’s needs and for export, agriculture and nature-based tourism. Conserving biodiversity is becoming increasingly important. Our policies must initiate the transformation, even if we cannot yet give an exact end date. If the world fulfills the Paris Climate Agreement, the fossil fuel markets will gradually close anyway.
Your government, under President Gustavo Petro, has been in office for two years. What progress have you made, for example, through legislation?
There is a draft law to convert our main oil company Ecopetrol (editor’s note: Ecopetrol is 88.49 percent state-owned) into a producer of renewable energies. It still has to go through parliament. Under the Petro government, 23 new environmental licenses for renewable energy projects – wind and solar energy and power lines to distribute them – have also been awarded. One of the most important lines, La Colectora, is of key strategic importance. It will feed the renewable energy generated in the Department La Guajira into the national grid – but the project has been on hold for five years. It has now received environmental approval. We want to increase the share of renewable energy in domestic energy production from the current four or five percent to 25 percent by 2029.
Countries like Germany have a strong interest in Colombia’s raw materials, such as nickel or hydrogen. How big is the risk that the old extractivism will merely be replaced by a similarly harmful, green variant?
The risk is quite clear. The raw materials are the dark side of decarbonization. However, the German government is working on environmental and social standards for hydrogen imports. And Colombia is working on reforming its mining law. In the future, the federal authorities, along with the regions and municipalities, will determine the environmental and social conditions for mining projects and clearly define what benefits these projects should bring to local people. Then, the companies that want to invest will know precisely under what conditions they can do so.
If the Colombian state is to become stronger, it also requires more money. Where will it come from?
For countries like ours, which are heavily indebted, have to pay high interest rates to access capital and are very dependent on oil and coal revenues, the transition is very complicated. In order to replace fossil revenues, we not only have to restructure the energy supply but also the entire economy. We cannot do this alone. That’s why we are working at a multilateral level to bring different countries together as partners in a large investment package.
Who are these partners?
We are talking to the USA, Germany and Norway. We have also proposed to the G7 that Colombia should be one of the first countries to receive financial aid from the international community for the green transformation of its economy.
How is cooperation with Germany in the energy sector progressing?
We greatly appreciate the joint projects with Germany to date, as well as Germany’s support for the peace process. But now is the time to move to a more structured relationship. In the energy sector, we are already working on this with the development of green hydrogen. We are also working towards a debt-for-nature swap. It would be an important signal that ambitious countries like Colombia are supported through very strong cooperation. At present, we tend to be punished for our climate ambition – and no country will put its economy and people at risk for a transition that requires a global effort.
The USA primarily relies on private capital for these development steps via voluntary carbon credits. What do you think of this?
In Colombia, we need public investment above all, which can then provide incentives for private investment. Of course, private investment is needed. But they must follow clear rules to be truly sustainable. Credits are only one instrument. They can fund a tiny part of a much more comprehensive and complex transition. We need allies willing to invest with us in the long term in developing new labor markets, technological capacities and social issues.
Susana Muhamad, political scientist and Colombian Environment Minister, is a member of the Colombia Humana party led by President Gustavo Petro. During Petro’s term as mayor of Bogotá, she was Minister of the Environment and later city councilor.
In 2016, former European Commission President Jacques Delors said that if EU policies “jeopardize cohesion and sacrifice social standards,” then “the European project has no chance of winning the support of European citizens.” In the wake of this month’s European Parliament election, Delors’s observation seems more pertinent than ever.
Following the far right’s sizable gains, the new European Parliament is expected to prioritize issues like immigration, security, and the ongoing cost-of-living crisis over climate change. Given the number of incoming MEPs opposing the bloc’s green agenda, the European Union may also be forced to slow its net-zero transition.
But instead of changing course, the EU should double down on its climate goals and take a page from the playbooks of China and the United States. In particular, it should emulate US President Joe Biden‘s Inflation Reduction Act (IRA) by creating a “buy green and European” program and a European Industrial Development Fund (EIDF) to support its clean-energy transition.
One of the far right’s most popular arguments against the energy transition is that the European Green Deal relies heavily on inputs from China and the US. EU imports of clean-tech products from China have skyrocketed in recent years, totaling 23.3 billion for lithium-ion batteries, 19.1 billion for solar panels, and 14.5 billion US dollars for electric vehicles (EVs) in 2023 alone.
By contrast, the IRA dramatically increased America’s investment in renewable energy. In the second quarter of 2023, for example, the US invested nearly 10 billion US dollars in battery-manufacturing technology, more than double its total investment in batteries, solar and wind power, critical materials, and EVs in the second quarter of 2022.
In the face of greater global competition, the EU economy finds itself in a double bind. On one hand, its most dynamic companies are investing in the US rather than in Europe. On the other hand, exports from China to the EU are increasing, especially following Biden’s latest tariffs on Chinese goods.
One might expect that a more nationalist European Parliament would improve the outlook for the EU’s industrial sector. But share prices for leading European renewable-energy companies like Vestas, Nordex, and Orsted declined the day after the election, owing to fears that the far right’s gains could delay the green transition.
To shore up the EU’s competitive position, policymakers must act decisively to support critical industries. More than 1,200 organizations, including 840 leading manufacturing companies, recently signed the Antwerp Declaration – which calls for a “European Industrial Deal” as a key part of the EU’s strategic agenda for 2024-29. Belgian Prime Minister Alexander De Croo put it best, “How do we continue to grow our European industry? The answer is: with a European Industrial Deal at the same level as a European Green Deal.”
Four steps in particular are necessary. First, European policymakers must recognize that slowing the net-zero transition will erode the EU’s global competitiveness. Adopting zero-emission technologies is the best way to reduce fossil-fuel imports and achieve energy self-sufficiency. By contrast, maintaining the status quo undermines the bloc’s energy security strategy and plays into Russian President Vladimir Putin’s hands.
Second, establishing the EIDF is crucial to achieving energy independence and technological sovereignty. As the implementation of pan-European financial aid during the COVID-19 crisis showed, EU institutions can make critical decisions and act on them within months when necessary.
Third, the EIDF should be financed through common debt issuances. To boost the production of green technologies such as electric vehicles, heat pumps, and photovoltaic panels, this funding mechanism should be easily accessible to entrepreneurs without excessive eligibility requirements. Crucially, the EIDF cannot succeed without adequate financing tools for renewable-energy companies in the EU – a benefit that US companies already enjoy under the IRA. But policymakers should make such funding conditional on investments in production capacity and job creation in specific industries.
Lastly, the issuance of common debt should be accompanied by a concerted effort to identify new revenue sources. One option is to impose additional import tariffs on Chinese EVs. Another approach is to tax digital platforms and plastic imports.
Historically, EU funds were allocated according to the bloc’s cohesion policies and member states’ GDP per capita. But the NextGenerationEU fund, established in 2020 to help European countries recover from the pandemic, set a new precedent by allocating 800 billion euros (858 billion US dollars) in grants and loans according to the impact of COVID-19 on individual economies.
Similarly, EIDF funds should be allocated based on the needs of domestic industries and the contribution of each sector to its respective member state’s GDP. Consequently, most funds should go to countries with relatively large industrial sectors, such as Germany, Italy, Spain, France, Poland, the Netherlands, Ireland, and Belgium.
Although this approach may face resistance from other member states, it is crucial to facilitating Europe’s industrial revival. To remain competitive in today’s global economy, the EU must accelerate its net-zero transition. The EIDF is a necessary step in that direction.
Marcin Korolec, Poland’s former environment minister, is Director of the Warsaw-based Green Economy Institute and Chairman of the Foundation for the Promotion of Electric Vehicles. He is a member of the European Investment Bank’s Advisory Committee on the Environment and Climate and a board member of the Institute for Sustainable Development and International Relations (IDDRI), MevaEnergy, InnoEnergy, and Transport & Environment.
