New GIIA report maps route to mobilise €1.5 trillion for clean transport
Global Infrastructure Investor Association (GIIA) and Freshfields Bruckhaus Deringer transport paper calls for increased private-public cooperation to ensure achievement of Fit for 55 2030 transport goals amid inflationary pressure and energy crisis.
EU policymakers must be mindful of the need to crowd-in private sustainable transport investment as they draw up measures to cut EU-wide greenhouse gas emissions by 55% in the years to 2030, according to a new paper from GIIA and Freshfields.
The intervention comes after the European Parliament agreed its position on the FuelEU Maritime and Alternative Fuel Infrastructure Regulation initiatives last week ahead of trialogue negotiations between EU institutions.
In ‘Building a sustainable future for EU transport’, published today, GIIA stresses the need for cooperation between the European Commission, Parliament, Council, and private investors as deadlines for emission reduction targets close in against a volatile geopolitical backdrop.
The European Commission has acknowledged the importance of private investors in mobilising the €1.5 trillion it expects will be needed to deliver a net zero EU transport network by 2050 – the sector currently accounts for almost a quarter of CO2 emissions across the bloc.
GIIA, whose members hold more than €85bn in transport assets across mainland Europe, is urging EU policymakers to:
- Create an understandable, implementable regulatory framework that reduces administrative burdens, costs and procedural delays for investors whilst enshrining stable criteria and clear timelines for sustainable transport investments, reducing the risk of stranded assets.
- Learn lessons from initiatives which spur private investment in innovation, such as the IPCEI Hy2Use (where €5bn of EU funding is facilitating an additional €7bn in private support for hydrogen projects) and the €1.6bn provided through the Alternative Fuels Infrastructure Facility (AFIF) for innovative projects which currently lack market viability, but have the potential to attract private funding.
- Launch a Sustainable Aviation Fund, to increase research and development around alternative green fuels, using proceeds from ReFuel EU Aviation penalties and emissions allowance auctions.
- Simplify existing funding structures – issuing clear guidance for different instruments and the rules and revenue models relating to them – taking forward such principles when designing the post-2027 multi-annual financial framework (MFF) and the next generation of EU funds.
- Strengthen the fund-raising model developed as part of the Recovery and Resilience Facility, maintaining it as a permanent mechanism for the financing of policy priorities.
- Widen use of sustainable urban mobility plans, to provide vision and clarity to investors; urgently move to clarify the status of EU taxonomy as it relates to waterborne transport beyond 2025.
- Develop an ambitious EU-wide transport infrastructure project pipeline, implementing welcome plans to accelerate permitting procedures as set out in the RePowerEU framework.
GIIA CEO Lawrence Slade said: “The task of decarbonising EU transport has been made more challenging by an energy crisis, rising inflation and high borrowing costs. It’s within this context that we need to step-up public-private engagement, to ensure we meet Fit for 55 targets and fulfil the aims set out in the Sustainable and Smart Mobility Strategy.
“Our members are already investing and innovating right across the EU, supporting achievement of the bloc’s net zero goals to the tune of hundreds of billions of euros. With the right policy framework, funding streams and project pipeline we can unlock hundreds of billions more.
“Our message to EU policymakers, with 2030 now only seven years off, is, quite simply, help us to help you: the more we step up private/ public sector dialogue, the more we can create an environment where the €1.5 trillion needed to establish a net zero transport network can be mobilised.
“Against an uncertain backdrop, marked by soaring inflation and high borrowing costs, it’s never been more important for the EU to show itself as a world leader when it comes to encouraging investment in net zero infrastructure.”
Natalie Pettinger-Kearney, Head of EU Regulatory and Public Affairs Practice at Freshfields Bruckhaus Deringer said: “The EU has set itself a highly ambitious objective to reduce transport emissions by 90% until 2050.
“To build the green transport system of the future will require massive investments in sustainable infrastructure.
“Considering the sheer scale of the challenge, it is critical that public and private investors work together more closely than ever, and in a predictable regulatory environment, to deliver on the EU’s climate ambitions.”