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European Green Deal: New financing mechanism to boost renewable energy

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The European Commission has published the rules for a new EU Renewable Energy Financing Mechanism, to apply from the start of 2021. This Mechanism will make it easier for member states to work together to finance and deploy renewable energy projects – either as a host or as a contributing country. The energy generated will count towards the renewable energy targets of all participating countries and feed into the European Green Deal ambition of reaching carbon neutrality by 2050.

Energy Commissioner Kadri Simson said: “To reduce Europe's greenhouse gas emissions by at least by 55% by 2030, we need to significantly increase the share of renewable energy. This mechanism provides an additional tool to facilitate investment in clean energy projects. It will encourage cooperation between member states and give a practical boost to our green recovery efforts in the coming years. It can help stimulate Europe's economies by getting large-scale projects off the ground and by supporting local SMEs and creating jobs.”

As foreseen under the Energy Union Governance Regulation, this Mechanism will be managed by the Commission, bringing together investors and project developers through regular public tenders. It enables ‘contributing member states' to pay voluntary financial contributions into the scheme, which will be used for renewable energy projects in interested member states (‘hosting member states'). More information is available here (including a link to the implementing regulation), in this factsheet and on the Renewable Energy Financing Mechanism webpage.

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