2025 – testing times for the EU’s ‘Investment’ Commission
As Donald Trump kicks off another presidential mandate in the US, there is no turning away from the EU’s major challenges of competitiveness, energy security and decarbonising the economy. With a new European Commission in place since December 2024, the roll out of initiatives addressing those challenges can begin. Whilst a lot of focus goes into policy design, the questions of the investment needed to deliver on the ambitions, and how to finance those investments, become increasingly prominent.
With the Commission’s Clean Industrial Deal (CID) in the pipeline for early 2025, our research for the first half of the year will zoom in on the investment needs to boost cleantech manufacturing in EU27 going forward. In the meantime, Ciarán Humphreys, I4CE research fellow, reminds us of what has worked well and less well in previous initiatives aimed at developing and financing an EU industrial policy in the report Making a Success of the Clean Industrial Deal.
We will publish the second edition of our European Climate Investment Deficit report in June 2025. Clara Calipel, I4CE research fellow, is tracking developments in investments in EU27 to meet EU’s policy objectives for emission reductions across the energy, buildings and transport sectors. The current annual investment gap is 406 bn euros, and each year that the gap persists, it increases the financial and environmental cost in the years to come.
The 750 bn euros Recovery Plan for the EU (NextGenerationEU) comes to an end in 2026, and repayments are due from 2028. With proposal for the EU’s next multiannual financial framework, expected by mid-2025, the Commission must deliver a strategic cornerstone towards a wider investment policy for Europe. Sooner rather than later, the EU needs a solid plan for how best to invest to ensure that competitiveness and decarbonization can go hand-in-hand.
