Clean Energy Projects to Get Financing From $14 Billion EU Fund
(Bloomberg) -- Green investment in Europe is set for a fresh boost as the region prepares to hand out 1 billion-euro ($1.1 billion) in aid aimed at helping companies shift to clean energy sources.
The European Commission will call for bids under the Innovation Fund on Friday that'll support low-carbon investment in energy-intensive industries, renewables, carbon capture and energy storage. The first tranche of funds will come out of the wider 12.5 billion euro fund.
“With the Innovation Fund, the EU can invest in market-ready projects that support the transition to climate neutrality,” Frans Timmermans, the EC's Executive Vice President, said.
The fund has been set up using revenue from the sale of 450 million permits to pollute under the EU Emissions Trading System, the world's biggest carbon market.
The value of the fund increased as the EU emissions permits jumped to near its highest in a year Wednesday. The contract plunged at the height of the coronavirus crisis. The EU's carbon market is the cornerstone of the region's climate policy, imposing pollution limits on power producers and manufacturers.
The commission is currently analyzing deepening the 2030 emissions-reduction target to 50-55% from the current 40% compared with 1990 levels. The outcome of its study is due to be published at the end of September.
“The fund will support further scale-up of renewable energy across Europe, and help expand low-carbon solutions in energy-intensive industries like cement, steel and chemicals,” Timmermans said.
Benchmark allowances to emit carbon dioxide in the EU ETS, which puts pollution limits on almost 12,000 facilities owned by manufacturers and power producers, traded at nearly 28 euros a ton on the ICE Futures Europe exchange in London on Wednesday. That's a 15% increase since the beginning of this year and levels close to an all-time high of 31 euros hit in 2006.
The commission plans to open further regular calls for proposals under the Innovation Fund until the end of the next decade.
©2020 Bloomberg L.P.
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