Europe ‘must spend on green energy and charging capacity, not roads, airports expansion’

A switch away from spending on roads and airports to new energy infrastructure such as grids and charging capacity is key to decarbonising road transport across Europe, according to a report from Transport & Environment (T&E).
Europe needs to spend €39 billion in public money every year to maintain the continent’s competitiveness and to ensure green transport technology is fully deployed, the study says, adding failure to do so will mean net-zero emissions is unachievable and undermine competitiveness.
The issue of roads investment, especially on national routes, has been a source of tension between the Green Party and its Coalition partners, Fine Gael and Fianna Fáil. Minister for Transport Eamon Ryan has repeatedly pushed back on demands for more spending on roads projects, saying the Government aimed to stick to its policy of a 2:1 split favouring public transport.
The Minister has also highlighted his view that transport was the most difficult sector to decarbonise in Ireland.
Sustainable finance director at T&E Xavier Sol added: “Greening Europe’s most polluting sector will need significant investment. Failing to do so will not only cost Europe its net-zero goal, but also the competitiveness of its leading industries like car-making, battery production, ship and plane building.”
“Public funds are needed to kick-start nascent industries and bring the continent’s grid and charging infrastructure up-to-speed. Luckily, fresh taxpayer money isn’t always necessary. Governments can free up funds by reprioritising support towards clean technologies and ending support for costly road expansion,” he added.
Focused and targeted support for decarbonisation of aviation needs to run in parallel to the end of public support for projects that do not align with the Paris Agreement objectives, T&E says. “EU and national budgets should stop supporting the building of new airports or their expansion, as it drives the growth of an unsustainable sector.”
It highlights a notable precedent is the European Investment Bank (EIB) climate bank roadmap 2021-2025 under which the EIB has decided to cease financing expansion of airports, saying it will “pull back from financing airport capacity expansion and concentrate support for airports on safety, security and decarbonisation projects. Conventionally fuelled aircraft will also no longer be supported”.
Public support of €39 billion every year for EV social leasing, green fuels, battery manufacturing and charging infrastructure would help to unleash seven times that (€271 billion) every year in private spending on green tech in Europe up to 2030, the T&E study finds. Total private and public investment rises to €507 billion a year by 2040, as the shift to green transport technology gathers pace, it forecasts.
The €39 billion a year for manufacturing until 2030 is less than the €42 billion European governments give away in subsidies for petrol and diesel company cars every year, T&E says.
The bulk of the investment (87 per cent) in green transport technology manufacturing will come from private investors, including manufacturers and banks, but the most capital intensive industries and energy infrastructure will need public support, it says.
It calls for a €25 billion-backed EU battery fund to support European battery manufacturing, which is under intense pressure from China. This would provide public funding for scaling local battery production, accessing key materials and de-risking investments in key components.
Similarly, e-fuels for planes and ships are currently expensive and are still in early stages of development. “Investors are therefore reluctant to take risks and Europe is way short of the total €86 billion in capital investments needed by 2030 to kick-start their production across Europe,” it says.
T&E calls on governments to deliver a third of this funding via guarantees and loans to de-risk private investments in clean-fuel production. Large public investments in particular are also needed to modernise Europe’s energy infrastructure to ensure grids can meet additional demand from millions of electric-powered vehicles, it concludes.
Governments should double current investments in grids to reach €67 billion a year until 2050, the environment NGO says. “This can be offset by limiting the €61 billion that European governments spend on road building, which, if halved, would be enough to match the additional needs for grids.”
“It is crucial that the future [transport] commissioner [Apostolos Tzitzikostas] delivers a robust sustainable transport investment plan,” T&E says.
The EU transport commissioner hearings are taking place in the European Parliament on Monday.