Europe struggles to define terms of ‘green’ recovery

 Many of Europe’s largest companies are receiving financial assistance to cope with the impacts of the COVID-19 pandemic but, according to EU rules published on 8 May, there will be no ‘green strings’ attached to bailout provisions.

To date, the European Commission has approved an estimated €1.9tn in state aid to provide liquidity for struggling companies, save jobs and enable research and development amid the crisis. The emergency provisions will be in place until the end of this year, with funds disbursed by individual member states.

Despite pressure from NGOs, the Commission has not mandated that national governments impose green conditions on struggling corporations in exchange for bailout money. However, the rules do ask large firms to report on how the aid they receive has been used to support green and digital transitions.

The Commission’s aid framework was handed down just over a week after the Petersberg Climate Dialogue, an environmental diplomacy meeting of more than 30 governments, took place online. At the virtual gathering, UN Secretary-General António Guterres urged global governments to devote rescue funds to the energy transition.

‘Where taxpayers’ money is used to rescue businesses, it must be creating green jobs and sustainable and inclusive growth,’ Guterres told Petersberg attendees via videolink. ‘It must not be bailing out outdated, polluting, carbon-intensive industries.’

Subsequently, a group of around 100 European NGOs launched a written appeal asking EU leaders and member states to prioritise a sustainable COVID-19 recovery in line with the Paris Agreement.

‘How we respond to the crisis will determine whether we succeed or fail in the fight against climate change, the loss of nature, widespread pollution and inequality, and create health benefits for all,’ reads the letter, which was co-signed by Climate Action Europe, Transport and Environment and the Greenpeace European Unit, among many others.

The letter urges lawmakers to impose strict sustainability conditions, monitored and enforced by the EU, on all forms of state support offered to companies. It also argues that fossil fuel producers and carbon intensive industries should not receive bailout funding. Meanwhile, the European Investment Bank should bring its lending policies into alignment with the goals of the European Green Deal.