Sustainable finance and public investment

What's happening

A major wave of investments is necessary to accelerate the electrification and decarbonisation of cars, planes, ships, trucks and other transport modes. To expedite the climate and energy transition, it is crucial that this money goes in the right places. Currently, most capital supports non-compatible sectors, hindering progress towards a net-zero world.

Consumer demand has prompted the financial industry to offer sustainable finance products. However, conflicting standards, lobbying and greenwashing impede capital flow.

At the same time, European governments are still subsidising polluting activities and technologies with taxpayers’ money. In 2024, EU member states spent €97 billion on fossil fuels subsidies.

€600 bn Additional investment needed each year up to 2030 to fulfill the EU’s climate commitments

What needs to be done

There are at least three areas that need tackling immediately:

Leverage public finance to steer a net-zero transport sector by 2050
Decarbonise the financial sector
Green private capital through strong EU sustainable finance legislation and direct investor engagement

Public investments

Decarbonising Europe’s economy by 2050 will require significant investments in green technologies. As one of the main emitting sectors, transport has a lot of work to do.

Public finance plays a crucial role in the decarbonisation of our economies to back non-bankable projects, support households, steer a just transition and leverage private investments. T&E promotes EU-level investments in support of the greening of European industry and the rapid deployment of clean technologies across the EU, from electric vehicles, batteries and minerals to grids and green hydrogen fuels for aviation and shipping.

Therefore, the next EU long-term budget (MFF 2028-2034) is a critical lever for the scale up of clean technologies and climate investments in Europe. Beyond the EU budget, public banks and national budgets should collectively support the achievements of the EU climate objectives.

T&E calls for an immediate investment booster until 2030 to speed up the switch to cleaner technologies. Revenues from carbon markets (the EU ETS) must be used exclusively for decarbonisation to build long-term resilience of a European clean industry.

Green private finance

EU’s sustainable finance agenda

The EU’s sustainable finance framework aims to steer private capital towards sustainable activities and support the objectives of the European Green Deal. In recent years, the EU has introduced rules to improve transparency, accountability and consistency across financial markets.

EU Taxonomy

The Taxonomy was designed to provide a common definition of environmentally sustainable activities. However, the 2022 Complementary Delegated Act classified certain gas activities as sustainable, prompting T&E and three other NGOs to challenge the European Commission in court.

Corporate transparency

The Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS) created a framework for companies to report transparently on their environmental and social risks and impacts.

The 2026 Omnibus regulation, presented as a simplification measure, substantially weakened the provisions of these frameworks.

ESG ratings

The EU adopted its ESG Ratings Regulation in 2024 to improve the consistency and transparency of Environmental, Social and Governance ratings. Significant differences between rating methodologies nevertheless remain, meaning companies with poor environmental performance can still receive favourable ESG assessments. Here’s how things look today.

Investor engagement

We work with investors to drive the decarbonisation of the transport sector by encouraging companies to align their strategies with EU climate goals.

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