Study on possible policy actions to enhance private capital mobilisation in the EU to finance the climate transition

The EU is committed to achieving climate neutrality by 2050 and to reducing its emissions by 55% by 2030 and by 90% by 2040. To finance this transition to climate neutrality, a substantial amount of private investment is required. This study aims to identify efficient and long-term effective policy options, tools, and regulations to mobilize and redirect this private capital for the climate transition in the EU. The focus lies on identifying financing barriers and identify policies promoting investments in clean sectors and reducing investments in "brown" (emissions-intensive) sectors.

In this context, adelphi supports the Directorate-General for Climate Action (DG CLIMA) of the EU in understanding and analyzing the needs and demand for private financing. Through clustering and characterizing investment barriers, the study seeks to determine how the allocation of private capital must shift within certain key sectors. Based on this analysis, those EU policies, tools, and regulations with the greatest potential for capital reallocation will be identified.

This study also provides an initial impact assessment of potential policies and tools for mobilizing private capital, assisting DG CLIMA in prioritizing and guiding future decision-making across European Commission departments.