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The impact of the EU Green Deal & COVID-19 recovery package on sustainability research in the future

Updated: Nov 3, 2022

EU Green Deal to become climate-neutral by 2050 is at the heart of the pandemic recovery plan

Record-low oil prices might seem like a hindrance to shift away from fossil fuel usage. After all, if the cost is this low it would make it nearly impossible for alternative energy sources to compete. But what this steady drop in price really highlights is an increasing uncertainty - and risk - for future investments in fossil fuels. In this chaos lies opportunity.


What is the EU Green Deal?

The EU Green Deal is essentially a plan to take Europe from a carbon-intensive economy to a low-carbon economy while not only avoiding a decline in the standard of living, but actually improving quality of life and prosperity for citizens. In addition to lowering carbon emissions, other tangible targets include cleaner air, cleaner water, better overall health, and an increase in natural areas within Europe. It is lofty, ambitious, unprecedented - and possible, though not without major challenges.

The proposed deal has been described as “Europe’s man on the moon moment” from European Commission president Ursula von der Leyen. It goes against the typical pattern of human development since industrialization, and perhaps in all of history. It is the complete opposite of pursuing growth at the expense of the environment, instead aiming to improve the environment while also improving the lives of citizens. It has never been done before - though it has never been seriously attempted before.

With almost all areas of the European economy needing to be redesigned and rethought, the task may seem daunting. Everything from energy generation to food supply chains to transporting goods will need to be changed. But the alternative - to continue with the status quo - will be harder and more expensive to deal with down the road.

The current state of EU sustainability R&D - and how COVID-19 is affecting this

The EU spends as much as €200 billion a year on subsidizing oil, coal and natural gas, according to a study by the European Parliament. This framework is clearly at odds with the effort to reduce greenhouse gases, which is a major focal point of the EU agenda going forward. The European Commission, the EU’s executive arm, has repeatedly criticized such subsidies for encouraging wasteful energy consumption and putting up an obstacle to green investments. Financing the clean energy transition is the biggest challenge for Europe.

In contrast, environmental investments totalled nearly €450 billion since 2014 from four main funding programs: Horizon 2020 (EU Framework Programme for Research and Innovation), Life+ (EU Funding Instrument for the Environment and Climate Action), COSME (Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises), and ESIF (European Structural and Investment Funds) - but this money is used for a wide variety of things under the vast umbrella of environmental progress, not just sustainability research.

While the energy industry as a whole was quite resilient during the coronavirus crisis, the pandemic and oil price collapse, which went from as high as $48.78 in March to as low as -$37.63 in April (the first time in history that WTI futures went into the negative), still created a “phase of instability.” Extremely volatile prices and disruptions in manufacturing supply chains hurt the industry, and while it affected both fossil fuels and renewables, the latter was not positioned to withstand the uncertainty and still lacks the deep pockets the entrenched energy companies enjoy from subsidies and revenues. However, this will likely only be in the short-term, as a shift in energy policy and research from the EU Green Deal will change how renewable energy is managed going forward.

The EU’s current objective is to cut emissions more than 40% by 2030, which would require an additional investment of 260 billion annually. Much of this budget will be used to invest in renewable energy research, but the more funds that can be diverted from fossil fuel subsidies to sustainability research will help make reaching this objective easier.

While the core of the Green Deal is sustainable development, its implementation is doubling as a much needed path to economic recovery from lockdowns brought on by the novel coronavirus. COVID-19 was not around when the deal began being drafted, as the goal to divest from fossil fuel dependency and reduce carbon emissions has been on the agenda for a long time. However, given the unique opportunity that a locked-down world presents, utilizing the Green Deal will lead to economic improvements alongside environmental ones.

Now, more than ever, given what has transpired with the global coronavirus pandemic, is the time to move toward more investment in sustainable environmental solutions.

The future of research under the EU Green Deal

Renewable energy has become more and more prevalent in countries around the world, and there is reason to believe this trend should only pick up speed. Investors are moving from fossil fuels to renewable energies, where higher long-term returns are forecasted. This is why 1) the EU Green Deal is at the heart of the recovery plan, because it is focused on the future, and 2) it is the perfect opportunity to accelerate support for renewable energy technologies, and open up sustainability research on a large scale.

The energy industry will be a major key to the EU Green Deal recovery package - and that goes for the industry as a whole, from fossil fuels to renewable energy to nuclear power. The European Commission is intent on creating new jobs and growth in areas such as energy efficiency and renovation, renewables, clean hydrogen and green infrastructure, which will lead to a rise in demand for sustainability research. Companies that invest in R&D in this field will be able to take advantage of the funding available for stimulated growth in these areas.

Research and innovation will play a central role in:

According to the European Commission’s statement on research and innovation for the Green Deal, “powerful instruments and innovative governance will drive the necessary systemic changes to reach climate neutrality and ensure an inclusive ecological and economic transition”.

EU programmes such as Horizon Europe will be key to leveraging national public and private investment. Together they will foster new technologies, sustainable solutions and disruptive innovation that create new emissions solutions for Europe and the rest of the world. Over 35% of Horizon Europe funding will go towards climate objectives.

Additionally, €350 million has been earmarked with calls for game-changing, market-creating innovation contributing to the goals of the EU Green Deal. The main element will be a €300 million one-off call under the EIC Accelerator to support start-ups and SMEs to develop and scale breakthrough innovations that address at least one of the eight goals of the Green Deal. Partnerships between innovators and investment arms will help drive the key transformations in the environment, society, and the economy that are the central pillars of the deal.

The Green Deal plan involves working closely with individual industries and countries to support partnerships in impactful areas such as clean hydrogen, low-carbon steel, circular bio-based sectors, the built environment, and biodiversity, among others.

Criticism and downsides of the deal

Many people across the political spectrum think the Green Deal is either problematic for how it will affect them, or, if they are in favour of it, they predict populist resistance for persisting with “green” policies.

Below are two critical quotes about the implementation of the EU Green Deal:

“The green agenda will meet more and more opposition as voters start to realise it will make them poorer and affect their lifestyles, and they will worry about Europe becoming less competitive than, say, India and China, which won’t be going carbon-neutral. This will increase the electoral strength of populists.”

-Charles Grant, Director of the Centre for European Reform think tank

“Will there be justice for the communities across Germany and France that have been asked to shoulder the costs of the climate transition? Does it speak to the swathes of Greek or Portuguese people who cannot afford to care about carbon emissions in 2050, preoccupied as they are with making ends meet this week? The stark answer is no.”

-Yanis Varoufakis and David Adler of the Democracy in Europe Movement 2025

While these are individual views, they do represent real apprehensions about some of the stringent measures that will be put in place due to the Green Deal. It will be interesting to see how much the pandemic will change how the deal is viewed, especially since it will be at the heart of the recovery plan. We have seen how connected and intertwined the global economy is - this might just be the spark needed for people to see the economic advantage in becoming more sustainable.

Will this lead to real change?

The short answer is: It needs to. Current measures will not achieve the goal of halving emissions by 2050. European Union member states have cut emissions by over 20% since 1990, and while this is better than having increased during this period, it will take a lot more intensive measures to decrease a further 50% over the next 30 years. Disruptive change is required, which is why the Green Deal - and what it will provide for sustainability research - is the key to creating real change in the way the EU handles climate change and energy usage.

If you or your organisation would like to take advantage of some of the available funding set aside for sustainability research and development, get in touch with us at

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