The new European Union Commission announced plans to invest €4.6 Billion in decarbonization technology and clean hydrogen projects utilizing the funds raised through its EU Emissions Trading System (EU ETS). The investment sourced from EU ETS aims to support competitiveness in clean industries operating in Europe and contribute to the EU’s neutrality goals by 2050.
Private equity/credit firms, asset managers and impact investors can leverage this initiative for potential profits as it may bring investment opportunities in clean tech and renewable hydrogen technology projects operating in Europe.
Let’s explore the €4.6 Billion commitment of the EU in detail.
Breakdown of the €4.6 Billion investment by EU
The investment has a main focus on three key areas — net zero technologies, electric vehicle batteries, and renewable hydrogen.
- Net-zero technologies: A total of €3.2 billion is allocated for net zero technologies, which includes €1 billion specifically for the production of battery cells for electric vehicles.
- Renewable hydrogen: The investment includes €1.2 billion directed towards accelerating renewable hydrogen production through the European Hydrogen Bank.
- Electric vehicle batteries: The initiative supports innovative projects in electric vehicle battery cell manufacturing, promoting advanced techniques and technologies.
European Commission Vice President Teresa Ribera Rodriguez said, “The commission is showing its commitment to deliver on its decarbonization objectives, and to support European industries’ competitiveness in key strategic sectors.”
Key aspects of the €4.6 Billion investment by the EU
- Each of the investment initiatives mentioned will be supported by the EU's Innovation Fund, one of the largest funding programs for net-zero technologies, which utilizes revenues generated from the EU ETS.
- According to the Commission, each of the new calls has new resilience criteria. The net-zero technologies call considers how the projects can improve resilience and due diligence throughout the supply chain, while the battery and hydrogen calls have more specific criteria like examining component and equipment suppliers and addressing the risk of becoming more dependent on China for supplies and equipment.
- The funding will be allocated through different calls for proposals that are open to stakeholders and investors until April 2025.
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