Europe must invest €39 billion ($42.46 billion) annually to meet its net zero emissions targets in the transport sector by 2050, according to a report released by campaign group Transport & Environment (T&E) on Monday. The organization outlined five key recommendations aimed at guiding the European Union’s efforts to decarbonize its transportation systems.
The report highlights the need for a coordinated industrial policy that includes significant investment in green technologies, particularly in light of recent findings by former European Central Bank chief Mario Draghi, who emphasized the importance of a comprehensive investment strategy for the EU. “An EU-level investment strategy must be urgently deployed to decisively support transport decarbonisation and enhance the sector’s competitive sustainability,” T&E stated.
T&E noted that the necessary investments exceed the EU’s current fossil fuel transport subsidies, which total around €34 billion annually. The organization advocates for the gradual elimination of these subsidies in favor of greener transportation options. The report arrives at a time when demand for electric vehicles is waning, prompting calls from some political figures and automotive industry leaders, including Italian Prime Minister Giorgia Meloni and BMW CEO Oliver Zipse, to reconsider the EU’s 2035 ban on fossil-fuel vehicles.
In addition to these recommendations, T&E called for a revised EU budget to ensure more efficient access to EU funds, the establishment of a €1 trillion Social and Climate Investment Plan by 2034, a more significant role for the European Investment Bank in transforming the mobility sector, and enhanced participation from private investors. The group estimates that total investments, including contributions from private sources, should reach €310 billion annually by 2030 to effectively implement its recommendations and achieve decarbonization across aviation, shipping, passenger vehicles, buses, and trucks.
Furthermore, T&E predicts that total spending will need to increase to €507 billion per year by 2040, culminating in a total investment of €7.6 trillion as the transition to sustainable transport accelerates. “The earlier investments will take place, the cheaper the transition bill will be,” the report concluded.
