Reaching ambitious climate targets will run into financial problems: EU

In a 63-page report, the court also noted that the European Commission, the EU's executive arm, did not include all greenhouse gas emissions in its tallies, which might lead to overly optimistic stats

The European Union's auditing agency warned on Monday that there might not be sufficient financing available to meet the bloc's ambitious climate targets.

The warning from the Court of Auditors comes as the 27-nation bloc is already struggling to live up to image as the global leader in working toward climate neutrality because of a political fight in the EU legislature to push through environmental protection measures.

In a 63-page report, the court also noted that the European Commission, the EU's executive arm, did not include all greenhouse gas emissions in its tallies, which might lead to overly optimistic statistics. The report's authors also found some of the commission's accounting too opaque.

Regarding its finding on financing, the court said that 30 per cent of the 2021-2027 budget was to be spent on climate action, or about 87 billion euros (USD 95 billion) a year.

This amount is less than 10 per cent of the total investment needed to reach the 2030 targets, estimated at around 1 euros trillion per year, the report said.

The auditors complained they had no information that sufficient financing will be made available to reach the 2030 targets, in particular from the private sector. The commission also reported that member states have a lack of collective ambition towards achieving the 2030 energy efficiency target, which had already proven to be the hardest to achieve by 2020.

The auditors pointed out that the targets for 2030 are much more ambitious and said they found little indication so far that this ambition will translate into sufficient action.

It puts the EU in a tough spot. On Tuesday, the European Parliament has a committee vote scheduled on a nature restoration plan that has deeply divided the bloc. The plan is part of a far bigger project for the EU to become climate neutral by 2050.

It includes a wide range of measures, from reducing energy consumption to sharply cutting transportation emissions and reforming the EU's trading system for greenhouse gases.

The European Commission said it wanted to keep all actions interlinked for optimal impact.