The European Union plans to dedicate a quarter of its budget to tackling climate change and has set up a scheme to shift one trillion euro (£856 billion) in investment towards making the economy more environmentally friendly over the next 10 years.
The Europe Investment Plan, unveiled on Tuesday, will be funded by the EU budget and the private sector.
It aims to deliver on European Commission president Ursula von der Leyen’s Green Deal to make the bloc the world’s first carbon-neutral continent by 2050.
The plan will include a mechanism designed to help the regions most affected by the transition to cleaner industries, although all EU member states will be entitled to subsidies.
Ms von der Leyen, who took office in December, has made the fight against climate change the priority of her mandate.
The bloc’s executive arm says that half of the investment will come from the EU budget.
National governments will contribute 100 billion euro (£85 billion), and 300 billion euro (£256 billion) will come from the private sector.
Another 7.5 billion euro (£6.41 billion) from the 2021-2027 EU budget is earmarked as seed funding within a broader mechanism expected to generate another 100 billion euro in investment.
The money is designed to convince coal-dependent countries like Poland to embrace the Green Deal by helping them weather the financial and social costs of moving away from fossil fuels.
The plan would allocate the money according to specific criteria. For example, regions where a large number of people work in coal, peat mining or shale oil and gas would get priority.
EU leaders agreed last month to make the bloc’s economy carbon neutral by the middle of the century, but Poland, which depends on coal for much of its energy needs, did not immediately agree to the timeline.
“We want to allow the coal regions to embrace without hesitation the European Green Deal,” said a senior commission official.
“The workers losing their jobs should be helped for re-skilling. There will be support for new infrastructure, job-seeking assistance, investment in new productive activities. And the regions where existing activities will cease will also need to be regenerated.”
The commission said the plan will also be supported by money from EU regional programmes, from the InvestEU scheme, which mobilises public and private investment using an EU budget guarantee, and the European Investment Bank.
According to the commission’s estimates, meeting the 2030 climate goals – which include reducing greenhouse gas emissions by 40% from 1990 levels – will cost an additional 260 million euro (£222 million) per year.
In order to qualify for the financial support, member states will need to present plans to restructure their economy detailing low-emission projects. The plans will need the commission’s approval.
Projects including nuclear power will not be eligible for funding, except for those related to Euratom’s programme for nuclear research and training.
Euro-MPs are expected to hold a non-binding vote on a Green Deal resolution on Wednesday and Ms von der Leyen wants to have a climate law adopted by March.