The EU must cut emissions in its energy supply through increased support for renewable energy to meet a 32% renewable energy share target by 2030. This includes renewable electricity, but also low-carbon gases (for example hydrogen, biogas) and renewable heat, such as biomass and geothermal.

Renewable electricity

Meeting the EU’s climate and energy targets requires a rapid and deep decarbonistion of energy supply. Electricity is one of the key ways to reduce emissions in the heating of buildings, in the transportation sector and in other parts of society. Renewable energy will play a pivotal role in achieving the EU targets.

The European Union must more than double its renewable energy capacity to decarbonise its energy supply and meet its 2030 renewable targets. The European Green Deal sets even more ambitious targets.

Wind power, both onshore and offshore, and solar photovoltaics have represented the core of the EIB’s support for cleaner electricity production. The EIB has in particular played an important role in supporting the offshore wind sector and the establishment of the supply chain industry. This trend is set to continue as the Bank supports the rollout of renewable energy projects as set out in the national energy and climate plans developed by Member States and in line with the Nationally Determined Contributions in countries outside the European Union.

Given the large investment needs, the Bank sees a continued role in helping investments in renewable energy and, in particular, projects contributing to their integration in markets or regional cooperation, as well as projects utilising early stage or innovative technologies, for example floating offshore wind.

The EIB will continue to support mature renewable technologies such as biomass, hydropower or geothermal, while ensuring that these projects represent effective and sustainable solutions to the climate crisis.

Low-carbon power and energy sources

The scale of the challenge to cut carbon emissions means we must pursue multiple solutions that are technically and economically viable and sustainable.

The EIB will continue to finance non-renewable generation projects that contribute to the transition to a carbon-free future. To ensure alignment with the Paris Agreement, the Bank applies a cross-cutting emission intensity threshold of 250 gCO₂e/kWh_e to all power generation projects. This level is marginally below the 270 gCO₂e/kWh_e EU benchmark established for “do no significant harm” with respect to climate change mitigation for sustainable finance, but it allows the Bank to focus on projects needed for decarbonisation over the long term. The Bank will continue to support innovation and the development of energy flexibility.

The Bank also supports the production of low-carbon gases, including hydrogen, biogas and synthetic gas, as well as renewable liquid fuels. These energy carriers can play an important role in long-term decarbonisation, in particular in the field of high-temperature heat, typical of industrial applications, as well as a possible tool to integrate larger volumes of variable renewable electricity sources.

We support innovation and innovative energy infrastructure such as decentralised energy production, energy storage, electric vehicles and innovative business models.

Innovation

Widening the number of energy technologies and services is a cornerstone of the energy transformation. Climate and energy challenges require our support to boost innovation and the development of promising sustainable technologies and business models. Many of these technologies are still at the early development stage and need to achieve substantial performance and cost improvements.

New investment opportunities in power markets are emerging, often associated with novel business models that respond to improvements in market design. New participants are entering the market and consumers are becoming more active as prosumers, while local “energy communities” are set to play an increasing role.

Many low-carbon technologies are, however, expensive, requiring support for research, development and innovation. The EIB helps companies through all stages of development in line with the EU Strategic Energy Technology Plan and the new Innovation Fund.

Innovation and its commercialisation are also important for the diffusion of new technologies among consumers, building on opportunities created through the wider trends of digitalisation and decentralisation. Smaller companies are critical in this regard, although often confronted with particular challenges in raising finance. The EIB will continue to deploy tailored finance instruments in this field, including through venture debt and equity funds, as well as by providing upstream advisory services to help develop robust business models.

The Innovation Fund

The Innovation Fund is one of the world’s largest funding programmes for the demonstration of innovative low-carbon technologies in the energy sector and in energy intensive industries. It is managed by the European Commission (EC) and will provide around €10 billion of support over 2020-2030 for the commercial demonstration of innovative low-carbon technologies, aiming to bring industrial solutions to decarbonise Europe to the market and support the transition to climate neutrality.

In the context of the Innovation Fund, the EIB is responsible for two activities:

• the provision and management of the Project Development Assistance (PDA), which aims at improving the quality of projects that have been assessed by the EC as not having reached yet maturity stage;
• the monetisation of the EU Emissions Trading System (ETS) allowances specifically dedicated to this initiative. The EIB may also decide to provide loans to some of these projects within the remit of its lending activities.

We enable the transition through critical infrastructure by fostering power grid investments, facilitating the integration of new, diversified energy sources such as wind and solar, and strengthening cross-border interconnections.

The energy transition needs a solid foundation of infrastructure to ensure its benefits are maximised and shared by society. Electricity networks play a critical role in enabling the integration of greater and greater shares of renewable energy sources, thus in the decarbonisation of power systems. The investment needed in electricity networks will increase significantly over the next decade to integrate renewables and electrify the economy.

The EIB consistently supports electricity network investments at both transmission and distribution levels, with a specific focus on assets that foster:

• integration of renewables (direct connection and development of system flexibility),
• efficient use of energy,
• development of electromobility,
• intelligent operation and management of power networks, and
• increased interconnection capacity between markets.

Traditional transmission and distribution assets are considered alongside new ones like storage, as well as mini-grid and off-grid solutions, as complementary options to enhance the quality, reliability, and access to electricity supply. Electricity network infrastructure shall be developed in a timely fashion and in anticipation of future flexibility needs, in order to avoid the risk of slowing down the decarbonisation process.

Other enabling infrastructure

Energy will not flow just on power lines, even in a fully decarbonised future. The EIB will support the development of infrastructure to transport low-carbon gases – including through the rehabilitation and adaptation of existing gas infrastructure when it is part of this goal – and the expansion and modernisation of district heating and cooling networks that contribute to efficient and climate-friendly energy production and consumption.