The State’s of Europe Climate Investment report
Context
Every year, households, public institutions, and private entities spent billion euros to acquire tangible assets and durable consumption goods such as buildings, dwellings, transport infrastructures and vehicles, energy production and storage facilities, factories and more. Using, renovating, or constructing these assets are the main sources of greenhouse gas emissions. As these assets are supposed to last for years, acquiring them today shape tomorrow’s economy and Europe’s future GHG emissions.
In 2019, the European Commission launched the European Green Deal, a plan aimed at transforming Europe’s economy, energy, transport and industries toward a more sustainable future. In this regard, through various sectoral objectives, action plans, and regulation, the Green Deal aims at cutting EU’s emission by at least 55% by 2030 in comparison to 1990 levels.
In this context, every year since 2024, the State’s of Europe Climate Investment report has estimated annual gross climate investment in the EU-27. Specifically, it tracks all investments in technologies required for the transition in the energy, buildings, transport and clean technology manufacturing sectors. Historically, these sectors account for more than 60% of the EU’s CO2 eq emission (EEA, 2023). The report also estimates the climate investment gap, defined as the difference between the current pace of climate investments and the estimated levels necessary to achieve 2030 objectives set by the Green Deal and EU sector-specific legislations.
The State’s of Europe Climate Investment is updated every year: the methods of estimation can change according to potential new EU targets and available data, and the perimeter varies with the inclusion of new sectors within the study. Moreover, in the medium term, the report will also explore the public and private shares of financing of these climate investments as well as the instruments used to finance them.
Partner
The European Climate Foundation have supported the production of the report, since the first edition in 2024,
Latest edition of the report, published in June 2025:
In its second edition, the report estimated that climate investments in the EU reached 498 billion euros in 2023, in the energy, buildings, transport and cleantech manufacturing sectors – or 2.9% of EU GDP. After years of significant growth, this represents an increase of only 1.5% compared to 2022, signalling a near stagnation.
This overall growth masks mixed dynamics across sectors. On the one hand, climate investments contracted in the buildings sector due to a slowdown in buildings’ construction and renovation activities and in the heat pump sales. In contrast, investment in renewable energy and electricity grids, driven by solar power, grew by 17% in 2023. The transport sector also saw an 8% increase in investment, driven mainly by the rising adoption of battery electric vehicles. Investments in cleantech manufacturing investments are also gaining ground, but the output of EU cleantech facilities is falling short of demand, putting many of these assets at risk.
While an average of 842 billion euros per year is needed to meet the 2030 EU climate targets, the report estimates the EU27 climate investment gap in 2023 at 344 billion euros. Early projections suggest that the gap is unlikely to narrow in 2024 as key sectors like wind power, building renovation, and electric vehicles sales are at risk of decline.
As the EU recalibrates around competitiveness and resilience, this report reminds that climate policy without sufficient investment will not deliver, and the cost of delaying action will only rise.
Figure 1: The EU’s climate investment gap amounts to 344 billion euros, representing the difference between climate investments in 2023 (498 billion euros) and the annual investment needs for the period 2025-2030 (842 billion euros).
2024 edition of the report:
In 2022, climate investments in the energy, building and transports systems in the EU27 grew by 9%, reaching 407 billion euros – or 2.6% of EU GDP. At a granular level, the report found that the investment trends vary across covered sectors. While investments in solar panels, electric cars and heat pumps increased significantly, wind power investments collapsed in 2022, down to their lowest levels since at least 2009.
With an estimated need if 813 billion euros every year to reach 2030 EU climate targets for the same perimeter, the level of investment in 2022 leaves a climate investment deficit of 407 billion euros, or 2.6% of EU GDP. In other words, the European economy needs to double its level of climate investments to deliver the EU 2030 targets.
