EU must invest 39 billion euros annually to achieve net-zero target by 2050: Report

A report by campaign group Transport & Environment (T&E) said Europe will need to spend an extra 39 billion euros a year to meet its net zero targets for the transport sector by 2050. Five key recommendations are made in the report to enable European Union decarbonisation of transport and fulfilling its climate targets.

In its T&E report, the organisation stresses the need for an urgent coordinated EU level investment strategy to helping the transition to greener transport. Funding clean technologies and infrastructure forms part of a raft of moves following former European Central Bank President Mario Draghi's September report calling for more coordinated industrial policy within the EU.

That's the equivalent of 39 billion euros of annual investment, not far off what the EU currently spends on fossil fuel transport subsidies every year, which is 34 billion euros. T&E campaigns for those subsidies to be phased out and money from them to be spent on green transport alternatives. The report follows growing debate inside Europe over the future of electric vehicles (EVs) as some politicians and industry chiefs including Italian Prime Minister Giorgia Meloni and BMW CEO Oliver Zipse urge a rethink on the EU's proposed 2035 end to the sale of new fossil fuel cars.

As well the proposals to allocate 772 billion euros (662.5 billion pounds) of EU funding to the green transition, T&E is also pushing for a new EU budget with streamlined access to funding, for the creation of a '1tn pounds Social and Climate Investment Plan for 2024-2034', and a stronger role for the European Investment Bank. In addition, private investment will have to play a key role as well, T&E suggesting that investment should be some 310 billion euros per year in 2030 and rise to some 507 billion euros in 2040, amounting to some 7.6 trillion euros over the coming decades.

If the investments occur early enough, the transition will be cheaper, T&E noted, urging action to avoid tomorrow's big ticket environmental costs, and kick start the shift to a sustainable transport system.