Europe currently invests 534 billion euros annually in the energy, buildings, transport and cleantech manufacturing sectors. To reach the 878 billion euros required to meet the EU’s 2030 objectives, an additional 344 billion euros are needed each year. In addition, the European Commission estimates that about €70 billion per year is needed in climate adaptation. For an energy-independent future, a competitive Europe and to protect the population, the EU, Member States, subnational governments and the private sector must prepare to accelerate investment.

The proposed €2 trillion EU budget (2028 – 2034) will be at the center of attention.  With limited fiscal space in many Member States, combined with a growing number of challenges to tackle, a lot of debate will focus on the overall size of the EU budget, new revenue stream for the EU, and the headline priorities. Although the EU budget is a significant public investment muscle, at 1.26% of the EU’s GNI it will remain limited compared to the collective spending power of Member States. Therefore, getting the wider toolbox right – also beyond the EU budget – will be essential.

The European Competitiveness Fund (ECF) is the EU’s best bet at financing its clean industrial ambitions. It will need not only a strong public budget allocation but also a data driven approach to guide strategic choices and investment decisions for Europe’s industries of the future. The ECF must also boost the mobilisation of private capital, including from commercial banks. Despite the ambition to support the cleantech sector, the scale-ups struggle to secure long-term bank loans. The barrier is less of a shortage of capital than a shortage of bankable projects. Helping more projects reach bankability faster will require targeted early-stage public derisking tools, stronger equity support, and local ecosystem clusters.

With the future of the EU’s Emission Trading System also up for debate, the coming months will see the acceleration of important design discussions – from launching contracts for difference under the Industrial Decarbonisation Bank to refocusing the Innovation Fund towards riskier, highly innovative projects. Revenues are crucial not only for supporting national investment in decarbonsing the industry, but for supporting European mechanisms developing the climate innovation needed tomorrow. 

The proposal for a revised Governance of the Energy Union regulation, expected towards the end of the year, is an opportunity to reinforce clean transition implementation measures. Turning the current National Energy and Climate Plans into investment plans could actively steer economic transformation and guide public and private investment for both mitigation and adaptation measures. It would deliver on investors’ demand for clear and predictable national investment strategies in the medium term, increasing resilience in the face of future energy crises.

The EU’s Integrated Framework for Climate Resilience and Risk Assessment will also be unveiled towards the very end of the year. It should lift the Europe-wide ambition on adaptation policies. In a space of overlapping competences between local, regional, national and the EU level, proposals much offer clarity on the sticky issues of who pays for the much-needed adaptation measures across different levels of government.

The proposed introduction of a “climate resilience by design” approach in the next EU budget period can go some way in ensuring that resilience and adaptation considerations are embedded in EU-funded investments in for example infrastructure, water management, agriculture, energy, transport, buildings and civil protection. If the objective is efficiency in public spending, the challenge will be to ensure a solid application across EU funding programmes.

Finally, the recent EU Electrification Action Plan focuses on reducing the price gap between electricity and fossil fuels and sets the scene for a critical debate later in the year on the Union’s electrification target. Lowering the upfront costs for electrification for end-user, including households, will be essential to ensure buy in and public support for the clean transition. This will be the backdrop for I4CE’s forthcoming research, focussing on the affordability of electric vehicles or heat pumps for low- and middle-income households in the EU and the public policies needed to effectively deliver this.   

The political agenda this autumn will provide key opportunities for policy makers to develop structural responses to the overlapping crises, which ultimately come at a high cost. Our engagement to identify the levers of the transition, informing debates and guiding decisions continue in France, Europe and internationally. More details in the newsletter below.

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L’article From wake-up call to investment action est apparu en premier sur I4CE.

As the threat of another immediate heatwave in Europe recedes, we can hope to see the end of this movie. A movie with a rich script, but not a pleasant one: overheated schools, hospitals under strain, unlivable city centers, canceled trains, parched harvests, nuclear plants running at reduced capacity, critical water levels, and unprecedented wildfires. 

Coming up next: the cost of summer 2026 

All of this has direct and indirect impacts on every sector across European countries. No one can say they went untouched this summer, whether professionally or personally. The theoretical warning has been proven by experience: our economy isn’t adapted to today’s climate — let alone tomorrow’s, as long as we keep burning fossil fuels and emitting greenhouse gases. 

The bill will fill several more scenes of the movie. First, the tally of direct summer losses: hectares of burned forest, canceled vacations, the deficit deepened by emergency aid. Then the delayed effects: impacts on the health of exposed populations; on our food systems; on homes, as rehydrating clay soils cause cracks to appear; and even on autumn weather, with an increased flood risk from a warmer sea.

Let’s skip the reruns 

We already have everything needed on the technical, administrative, and scientific fronts to avoid being condemned to live the same scene again and again every summer. So let’s not waste a good crisis. This summer’s sequence should lead to a debrief: what held up, what had to be adjusted, what failed — to understand which actions and decisions were effective, and which shouldn’t be repeated. In a few years, summer 2026 may look like the norm, but improvised, last-minute fixes — as has too often been the case — won’t cut it anymore. After the 2003 heatwave in France, crisis management improved considerably. After 2026, we need to go further on anticipation — and even if we can’t adapt to everything, go further on structural transformation.

Does the word “transformation” sound scary, evoking the “investment wall” described by Monique Barbut, the French Minister of Environment? The size of that wall depends first on what we want to protect “at all costs” and what we are willing to give up. It also depends on which adaptation options we choose: some responses might require little investment — shifting working hours during heatwaves, say, rather than fully overhauling buildings. And finally, it depends on sequencing: the goal isn’t to adapt everything within five years, but to systematically factor future climate into every investment, so that our economies gradually become more resilient. 

Seen this way, adaptation isn’t an added expense — it’s the plot for well-designed economic policy on land use planning, housing, and economic development, one that spares us considerable risk and expense down the line. 

Bring on the next saga 

After the summer 2026 that left millions of people in Europe affected, failing to offer a credible response on climate adaptation could well cost elections. It’s up to political leaders to design and implement such a response — credible, including on financing. 

L’article Groundhog Day est apparu en premier sur I4CE.

The recent heat wave in large parts of Europe reminds us that the forthcoming European framework for climate resilience and risk assessment comes with high stakes: it is about the safety of populations and the competitiveness of the European economy.

Over the past couple of weeks, agriculture and livestock farming were severely affected in large parts of Europe; homes were unlivable; public transport was struggling; energy infrastructure was challenged; classrooms and exam rooms were overheating; schools closed; sports events and cultural activities were cancelled…for many people there was a clear impact on their work life and daily routines.

Although there is both knowledge and tools at our disposal to put adaptation policies into practice, the heat wave exposed a lack of anticipation in Europe. At both the national and the local level, there will be lessons learnt about the actions and decisions which were effective, and those not to repeat.

While many adaptation measures are planned and, above all, implemented by Member State and local authorities, the impact is Europe-wide. A European framework will support greater preparedness. First and foremost, establishing a common reference warming trajectory would provide a shared baseline. On this basis, the concept of “resilience by design” must become operational in EU funding programs, ensuring that every euro of European public money effectively contributes to the continent’s adaptation. Finally, some issues are European by nature—such as the EU Civil Protection Mechanism (rescEU) or certain cross-border infrastructure projects—and therefore require an adaptation strategy designed directly at EU level.

The climate has already changed and will continue to do so. This must be incorporated into every public—and private—decision-making process going forward. In a few years, the recent heat wave may well be the new summer norm. By then, emergency responses and last-minute measures can no longer be the norm.

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L’article The heat is on est apparu en premier sur I4CE.

Uncertainty over the rules for claiming credits is presented as a major barrier to financing European agricultural carbon credits. This uncertainty points directly to what is known as “double claiming”: when a farmer engages in a low-carbon project and sells carbon credits to a third party, the agri-food company that sources from them fears being unable to account for those same reductions in its own GHG inventory. As a precaution, many companies then turn away from these projects, and even discourage their suppliers from taking part.

Our new I4CE study “Double claiming of agricultural carbon credits: time to stop worrying” shows that this fear is largely unfounded. Counting a physical emissions reduction in one’s inventory and funding it are two separate things, and they can coexist: clarifying European regulation would be enough to remove the ambiguity. We hope this work will add a useful voice to the debate. 

Alongside this publication, we are releasing two further contributions: 

• Recommendations for certifying improved forest management, as work on a CRCF methodology in this area gets underway, amid concern over the capacity of the European forest carbon sink. 

• A policy brief on best practices for the future Buyers’ Club for European agricultural carbon credits. 

These contributions share one conviction: scaling up low-carbon agricultural and forestry practices depends as much on solid public and private financing as on pragmatic and transparent rules. 

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L’article Unblocking finance for low-carbon agriculture  est apparu en premier sur I4CE.

I4CE’s latest edition of the State of Europe’s climate investment shows that Europe is moving forward, but not fast enough. After a sharp increase following the 2022 energy crisis, investment in the low-carbon transition has stagnated. It reached 534 billion euros in 2025, well below the 878 billion euros needed annually to meet the EU’s 2030 targets. Unmet investment needs do not disappear. They pile up, widening the gap and increasing the cost to reach climate neutrality for future generations. Early signals in 2026 suggest that the new energy crisis could once again push investment upward. Sustaining the tendency will require robust long-term planning. 

Europe cannot afford another cycle of crisis-driven investment surges followed by years of stagnation. The current situation calls for both immediate measures to protect households and businesses from rising energy prices, but also for structural initiatives to mitigate the impact of future crises. The EU and its Member States have concrete tools at their disposal: pursuing and resourcing electrification plans at the EU level and nationally, prioritising the clean transition in the next multiannual EU budget,, maintaining the ambitions of the CO2 emissions standards for cars and vans regulation, and ensuring that the forthcoming revision of the EU emission trading system increases investment in industrial decarbonisation.   

Above all, these policy levers must provide investors, businesses, and citizens with the clear, stable, long-term signals they need to commit to an energy independent and low carbon future for Europe. 

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L’article Accelerating investment for an energy-independent and low-carbon future est apparu en premier sur I4CE.

The IAA confirms that industrial policy has truly arrived at the EU level and the proposal marks a genuine step forward by addressing demand, not just supply, and introducing an explicit language shift on local content. But the proposal reflects conflicting political priorities and contains loopholes that risk leaving delivery one step behind the rhetoric. Whether that changes will be decided in the negotiations ahead: in Parliament and Council, the gap can still be closed.

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L’article The Industrial Accelerator Act: a stepping stone or paradigm shift? A reading of the European Commission’s proposal est apparu en premier sur I4CE.

These developments are affecting households’ ability to invest in transition solutions. We have therefore updated the analyses of our French Observatory of access conditions to the ecological transition for households and revised the key indicators used to assess the ability of middle- and low-income households to invest in an electric vehicle, a deep energy retrofit, or a heat pump.

Three main conclusions emerge from this update:

1. Under current conditions, buying a second-hand electric vehicle is becoming more advantageous than continuing to drive an old combustion engine car. With petrol prices exceeding €2 per liter and declining prices for second-hand electric vehicles, the energy savings cover the out-of-pocket repayments for purchasing a used electric car.

    

2. The out-of-pocket cost for a deep energy retrofit of a house has increased by €20,000 in 2026 and now exceeds €40,000. The sharp increase in public aid in 2024 has been completely offset by reductions this year. Nevertheless, for households that manage to finance the work, retrofit still generates savings. Indeed, the energy savings from a deep energy retrofit cover the out-of-pocket repayments of a zero interest eco-loan.

    

3. Installing a heat pump is becoming even more attractive for households in 2026. The revision of “Coup de pouce chauffage” (a bonus for replacing a heating system with a low-carbon solution) has reduced the out-of-pocket cost by €3,000 since last year. At the same time, rising fossil fuel prices are increasing the potential savings from installing a heat pump.

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L’article Electric cars, home reprofit, heat pumps: Can the middle class afford to invest in 2026? est apparu en premier sur I4CE.

The beginning of 2026 has proven to be economically turbulent. The increase in fossil fuel prices caused by the war in the Middle East has driven up household energy bills. In this context, investments that allow households to free themselves from dependence on fossil fuel -electric vehicles, heat pumps, home insulation- are attracting growing interest and the government recently presented its plan to electrify end-use sectors in order to speed up the transition to electric uses.

At the same time, public aid programs for energy retrofit and electric mobility have been revised, sometimes involving significant cuts. Finally, while the cost of energy retrofit continues to rise, the trend is beginning to reverse for electric vehicle prices.

These developments are affecting households’ ability to invest in transition solutions. We have therefore updated the analyses of our French Observatory of access conditions to the ecological transition for households . We have updated the key indicators that allow us to assess the capacity of two households profiles to invest in the transition: the Fields family and the Newtown family, both of whom are middle-income households, own their homes, and are dependent on cars daily.

Result #1: Under current conditions, buying a used electric car is becoming more advantageous than continuing to drive an old combustion engine car.

At the beginning of 2025, purchasing a used electric car on credit to replace their old combustion engine vehicle would have strained the budget of the Fields household, one of our middle-income household profiles used in our latest study, living in a rural area. Indeed, the fuel savings, which we estimated at 120 euros per month, were insufficient to cover the loan repayments, even considering the down payment obtained from selling their old vehicle. Switching to an electric vehicle would thus have cost this household nearly 60 euros more per month, considering fuel, maintenance, insurance, and the zero-interest eco-loan (éco-PTZ) repayments (Figure 1).

Recent changes in energy prices and the price of used electric cars have changed the game: the Fields family can now afford to buy a used electric car, saving around ten euros a month under current conditions. Indeed, with gasoline prices exceeding two euros per liter last March, the energy savings from switching to electric would now amount to more than 140 euros per month. At the same time, the price of a used electric city car has decreased since last year, as have interest rates, thus reducing loan repayments.

FIGURE 1 – COMPARISON OF THE MONTHLY MOTORING BUDGET FOR A SECOND-HAND INTERNAL COMBUSTION ENGINE CAR AND THE PURCHASE OF A SECOND-HAND ELECTRIC CAR IN 2025 AND 2026

Result #2: The out-of-pocket cost for deep energy retrofits has increased by 20,000€ in 2026, but this investment still allows households to save money.

Long considered marginal compared to individual upgrades, deep energy retrofits have finally taken off in recent years, reaching 120,000 retrofitted homes by 2025. This is largely due to the 2024 implementation of the MaPrimeRénov’ « Parcours accompagné » scheme for deep energy retrofit, which was particularly advantageous for households. In 2025, the Fields family, a lower-middle-income household, was estimated to receive over €40,000 in public aid for the deep energy retrofit of their oil-heated rural home. This left them with only €21,000 to pay for the investment, a historically low out-of-pocket cost (Figure 2).

However, the scheme ultimately became a victim of its own success, so much so that by mid-2025, almost all the allocated funds had been exhausted, leading to the closure of the grant application process. After a lukewarm reopening at the end of 2025, the French National Housing Agency (Anah) finally implemented a reduction in the maximum eligible work amounts and the elimination of the « sortie de passoire énergétique » (energy efficiency upgrade) bonus for 2026. The result for the Fields family: an increase of over 20,000 euros in their out-of-pocket expenses for retrofitting their home, as the reduction in aid amounts in 2026 more than offset the increase in 2024. The Fields family’s theoretical borrowing capacity is sufficient to finance this out-of-pocket cost with a loan, but their room for maneuver has shrunk, and many other first-time homebuyers do not have sufficient financing capacity.

FIGURE 2 – EVOLUTION OF THE OUT-OF-POCKET COST FOR THE DEEP ENERGY RETROFIT OF AN OIL-HEATED HOUSE BETWEEN 2023 AND 2026 FOR A LOWER MIDDLE-INCOME HOUSEHOLD

Meanwhile, the surge in heating oil prices since last January is increasing the Fields household’s heating bills if they don’t retrofit their home. Deep energy retrofits therefore still allow the household to make significant net savings on their monthly housing budget, in the order of 120 euros, which is a few euros less than in 2025.

Result #3: Installing a heat pump becomes even more attractive for households in 2026, due to increased aid amounts and rising fossil fuel prices.

While overall aide amounts for deep energy retrofits decreased in 2026, this was not the case for subsidies for heat pump installations. The amount of the « Coup de pouce chauffage » (a bonus for replacing a heating system with a low-carbon solution), which the Newtown household – a upper middle-income household- could receive for their gas-heated suburban house, has more than doubled since last year. By combining this aid with the MaPrimeRénov’ scheme, the out-of-pocket cost for installing a heat pump fell from 12,000€ to 9,000€ between the beginning of 2025 and 2026.

Concerning the energy bill, the consequences of the war in the Middle East are also being felt on gas prices in France. The French Energy Regulatory Commission has announced an increase in the benchmark gas price for May, which had previously remained unchanged. The potential savings on the Newtown household’s energy bill will therefore increase if they replace their gas boiler with a heat pump.

In this new economic context, the installation of a heat pump would ultimately allow the Newtown household to save around 100 euros per month, considering the repayment of an eco-PTZ to finance the purchase of the heat pump, thirty euros more than in 2025, while protecting them from potential future increases in the price of gas.

FIGURE 3 – MONTHLY BUDGET BEFORE AND AFTER THE INSTALLATION OF A HEAT PUMP IN 2025 AND 2026 FOR AN UPPER MIDDLE-INCOME HOUSEHOLD

The energy crisis we are currently experiencing may well persist over the long term. The government’s electrification plan is expected to help protect households most exposed to future increases in fossil fuel prices. Among the measures put forward are the continuation of the “social leasing scheme” (a State-aided car leasing program that allows low- and lower-middle-income households to rent an electric car for a relatively low rent)  and the strengthening of support for certain professions for mobility, as well as the introduction of a heat pump leasing scheme for housing. We will document the impacts of these measures, along with other developments, on different household profiles and on their capacity to invest in the transition in our 2026 edition of the French Observatory of Access Conditions to the Ecological Transition, to be published next September.

L’article Energy crisis, changes in public aid: can households switch to electric cars and retrofit their homes in 2026? est apparu en premier sur I4CE.

In an op-ed for Les Échos, I4CE  Executive Director Benoît Leguet argues that French industrial policy must now pivot decisively from supply-side support to demand-side steering. The diagnosis is clear: firstly, gigafactories were built before critical input supply chains were secured. Secondly, not a single European synthetic fuel project has reached final investment decision in the absence of long-term offtake contracts with airlines and fuel providers. The toolbox to fix this exists, but is underutilised and is incomplete: mandatory environmental and local content criteria in public procurement, long-term contracts to secure offtake, standards that align private purchasing with industrial strategy. 

Some of the most powerful levers run through Brussels as much as Bercy – and the Industrial Accelerator Act and the design of the next European multiannual financial framework (2028–2034) are precisely the frameworks France should help shape.

This EU budget and in particular the proposal for a European Competitiveness Fund is the focus of a blog by cleantech researchers Ciarán Humphreys and Elena Schneider, reacting to the European Parliament’s ITRE committee draft report on the matter. The proposed Economic and Technological Advisory Council is a step forward for more targeted public spending, and a revival of some of the original ambition behind the Competitiveness Coordination Tool – but without a public data observatory and real coordination with Member States, €234 billion will not be enough to align twenty-seven national industrial strategies. 

In Paris or Brussels, it is clear that green industrial policy is no longer short of plans or political ambition. What is needed now is the coordination to pull demand, investment and disparate national interests in the same direction, towards a decarbonised, competitive industrial base.

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L’article Green industrial policy: building the market, not just the factory est apparu en premier sur I4CE.

The France 2030 investment plan was built around an ambitious bet: transforming historic industrial strengths – steel, automotive, aerospace – into competitive pillars of a decarbonising economy. 

Five years on, the results can be seen, and new green industrial ecosystems are emerging. Battery gigafactories have been built. ArcelorMittal has taken a final investment decision for an electric arc furnace in Dunkirk. A solid pipeline of synthetic aviation fuel projects is taking shape, positioning France as a potential European leader in sustainable fuels. These are not negligible achievements. 

But without a qualitative leap in our cleantech industrial policy, we risk being unable to go much further. Whether for batteries, green steel or sustainable fuels, subsidising projects is not enough: it is the entire value chain that needs to be secured. 

Neglected links in the value chain 

In each of these sectors, the upstream sectors remain dangerously exposed. Battery gigafactories were built before supply chains for critical inputs were secured – leaving production dependent on imported materials, predominantly from China. 

On the sustainable fuels side, in the absence of long-term offtake contracts with airlines, not a single project has yet crossed the threshold of a final investment decision. The conditions are nonetheless in place for France to master the first building blocks of this value chain, from low-carbon hydrogen production to final fuel synthesis. If it ends up importing Chinese e-methanol – one of the priorities of China’s latest five-year plan – for simple conversion on French soil, it will retain only the last link in the chain. 

The mistake is to allow the gap between announced ambition and the actual construction of value chains to widen, leaving outside competitors to rush in and fill the gaps in the chain. 

Demand-side steering and budgetary coherence 

What needs to change? Too long focused on supply, industrial policy must now be structured around genuine demand-side steering: environmental and “Made in Europe” criteria in public procurement, long-term contracts to secure initial markets, standards to align private purchasing with industrial strategy. 

Budgetary coherence is also at stake. In a context of tight constraints, every public euro must earn its place. It is increasingly difficult to justify a budgetary arrangement that still channels nearly €2 billion a year in tax advantages for corporate fleets towards combustion-engine models – all the more so in the current energy context. And while the social leasing scheme announced by the government is indispensable in this same context, it will become difficult to justify such a scheme if only 18% of the vehicles leased are assembled in France. 

French sovereignty runs through Brussels 

The challenge is not to spend more – it is to stop subsidising against our own objectives. And the most powerful lever available to France lies less with Bercy than with Brussels. The Industrial Accelerator Act proposed by the Commission in March 2026 is precisely the framework that France must help shape and champion. It is in the intelligent articulation of national and European tools that industrial strategy becomes durable. 

France has the innovators, the industrial base and the policy foundations to contribute to Europe’s green reindustrialisation. The question is whether we consolidate that position – or whether we allow the gap between ambition and execution to become an opportunity for others. Industry, decarbonisation and sovereignty must now be placed firmly at the heart of the political debate ahead of the 2027 election – without forgetting to act before then. 

L’article Cleantech: after the supply-side push, time to tackle demand est apparu en premier sur I4CE.