Closing keynote by Commissioner Gentiloni at the EU Sustainable Investment Summit

Commissioner Gentiloni - EU Sustainable Investment Summit

[Introduction]

Good evening. I hope you have enjoyed this third edition of the EU Sustainable Investment Summit. Let me thank all our speakers for their contributions to today's discussions.

We are entering the final stretch of a mandate in which Europe's boat was rocked by unprecedented crises. But through it all, we have stayed the course of the Green Deal as Europe's new growth strategy.

That strategy recognised right from the start that the green transition cannot happen without the necessary financing. You will recall that shortly after announcing the Green Deal, in the very first days of our mandate, the Commission put forward the Sustainable Europe Investment Plan.

[Mobilising public and private investments]

Today's Oxford-style debate asked whether private or public finance is more important to deliver on the green transition. But the bottom line is: we need both.

We need public investment to help crowd-in private capital and compensate for market failures. And we need private investment to reach the scale needed. Indeed, the green transition requires specific investments of such a magnitude that public financing alone can never be sufficient. In the EU, we put the figure at €520 billion in additional investments per year until the end of the decade. At the global level, we are talking about trillions.

During this mandate we have adopted several groundbreaking initiatives to mobilise sustainable investments. With new instruments like the Recovery and Resilience Facility and the InvestEU programme, we have put on the table almost €500 billion for the green transition up to 2027. This is good news, and we are encouraging Member States to make the most of all the tools and funding we have made available, starting with the determined implementation of their Recovery and Resilience Plans.

On the public financing side, let me also mention our reform of the economic governance framework which is now in the final stages of the legislative process. By linking the possibility for Member States to spread their fiscal adjustment over a longer period in exchange for reforms and investments aligned with common EU priorities such as the Green Deal, we will encourage Member States to prioritise sustainable investment.

On the private financing side, the EU has created the most advanced sustainable finance framework in the world. Programmes like InvestEU, as was noted also during yesterday's high-level event, are helping to create new synergies between the public and private sector in green investments.

We have also been the first jurisdiction in the world to introduce a Carbon Border Adjustment Mechanism. And even though it has only recently started to apply in its transitional phase, we already see it is prompting companies outside the EU to invest in greener production methods and governments around the world to announce similar schemes.

[Conference recap]

Let me thank the Chair of the Intergovernmental Panel on Climate Change, Jim Skea, for reminding us of what is at stake. 2023 was the hottest year on record, and without decisive action we will not meet the goals of the Paris Agreement, with catastrophic effects.

Today's first panel made it clear that delivering on the green transition requires a major overhaul of our economic model. There is virtually no aspect of our lives that will remain untouched; no sector of our economy unaffected.

The second panel showcased the role of innovation in developing the new clean technologies that will make the transition possible, and in the process create jobs, attract investment, and stimulate growth.

All major players on the global stage are investing heavily to promote clean technologies – wind, solar, batteries, hydrogen. The EU must remain at the forefront of these innovations if it is to remain a global industrial player.

The Green Deal Industrial Plan is a first step towards ensuring that Europe maintains its competitive edge. But I believe this is an area where we need to do more, especially bearing in mind that instruments like the RRF and InvestEU are running only until 2026 and 2027, respectively. As we look ahead, Europe will need to set common objectives and design common projects that will be financed jointly. We must finance projects for which a European scale represents an advantage – projects of common interest for Europeans.

This new industrial race can be good news for the planet, because it means that the world's largest economies are getting serious about accelerating the green transition – something the EU has long pushed for. And where those lead, others will follow. Competition can spur more innovation, bring down prices and give consumers greater choice.

But these developments can also spell trouble if, instead, they lead to a subsidy race, if they push countries to erect trade barriers and if international cooperation breaks down.

Because as we have seen in today's third panel – we need international cooperation to tackle climate change and mobilise the clean energy investments required in emerging and developing economies. Richer nations must support climate-vulnerable countries in both the transition and in adapting to the consequences of the climate crisis that are already here. The EU will continue to play its part.

[Conclusion]

Ladies and Gentlemen,

Delivering on the green transition is an environmental necessity, an economic opportunity and a geopolitical imperative. It requires, as we have seen, investments on an unprecedented scale. But it also requires broad social acceptability.

We must be mindful about the possible distributional effects of our policies. And we must ensure that the transition really is a just one, that efforts are shared fairly, and that workers have the skills they need. Our success or failure on this front is not just a moral question, it is also a sine qua non for the transition itself to succeed. Also the upcoming elections provide a timely reminder of this fact.

The European Green Deal is one of the key legacies of this Commission. It will be up to the next Commission to take it forward. Staying the course of the Green Deal is the right thing to do, provided we balance long-term ambition with pragmatism and common sense. If we do so, I am convinced that Europe can preserve its global leadership in driving the green transition.