The European Commission's (EC's) vice-president Valdis Dombrovskis has announced further plans for consolidating the EU's position on green financing. He said at an ECOFIN press conference in Luxembourg yesterday that more capital for green and sustainable projects is needed and that an estimated €180 billion in additional yearly investment for the next couple of decades is required to limit the increase in temperature to well below two degrees Celsius, as stated in the goals of the Paris Climate agreement.

Dombrovskis said: “To achieve our goals, we need to increase the flow of the private capital in green and sustainable investment.” And he added that the private sector could potentially become a key source of climate finance. He also spoke about the need for a systemic change and a complete change in investment culture.

Strategy for green finance

Next year, the Commission will present a comprehensive strategy for sustainable and green finance in the EU, which will include strategies on areas such as:

• EU-wide green labels and classification for green assets;
• integrating sustainability into the investment chain and credit ratings; and
• the so-called 'green supporting factor'.

Further discussions will be held by the High Level Expert Group on Sustainable Finance, the EC's designated body to manage the shift towards green investment, before it makes a final report at the Paris Climate Summit on 12 December.

VAT reform

During the same press event, Dombrovskis announced the Commission's VAT reform proposal, which it claims will reduce VAT fraud by 80 per cent. The cost of VAT fraud in the EU is currently estimated at €50 billion.