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The $40 billion fund that’s gambling with Europe’s climate goal

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on Bloomberg or enjoy below:

🗞️ Driving the news: The European Union’s €40 billion Innovation Fund, central to the EU's goal of becoming carbon-neutral by 2050, has seen mixed results in its early stages
• The fund, which supports carbon-cutting projects across various sectors, faces challenges such as layoffs at a solar panel manufacturer, a battery maker moving to the US for subsidies, and stalled green hydrogen projects due to electricity shortages

🔭 The context: Despite the fund's ambition and backing of projects like the world’s first major green steel plant, several initiatives, particularly in manufacturing and hydrogen, have struggled
• The fund's goal is to keep key industries in Europe and prevent them from moving overseas, countering the effects of the US Inflation Reduction Act

🌍 Why it matters for the planet: The Innovation Fund's success is crucial for the EU's climate targets, aiming to significantly reduce industrial emissions without losing critical enterprises to other regions
• Its challenges and successes could shape the bloc's ability to meet its ambitious 2040 climate goals

⏭️ What's next: The EU remains committed to investing in innovative, risky technologies to decarbonize its economy
• While some projects may not reach completion, the fund's phased funding approach minimizes financial losses, reallocating resources to more promising ventures

💬 One quote: "Right now Europe is essentially decarbonizing through deindustrialization," noted Ann Mettler, vice president for Europe at Breakthrough Energy, highlighting the balance needed between green transition and maintaining industrial competitiveness

📈 One stat: The Innovation Fund has allocated over €6 billion to scaling up clean technologies, including CO2 capture and green hydrogen production, among its efforts to reduce emissions from Europe's largest polluters

Click for more news covering the latest on ESG

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