New report published: Investments in Climate Friendly Materials to Strengthen the Recovery Package

Report of June 25, 2020

Investments in Climate Friendly Materials to Strengthen the Recovery Package

Supporting investments in climate friendly production and recycling of materials as part of the European and national Covid-19 recovery packages can both achieve the short term objective of effective recovery spending for boosting the economy and creating jobs as well as deliver climate and long-term economic benefits. In order to realize the full economic and climate benefits of investment support, a rapid implementation of the policy package envisaged in the European Green Deal is required.

Supporting climate-friendly investments through the recovery package can help to ensure that stimulus measures are effective, i.e. meet the criteria of being targeted, timely and temporary (Kroeger et al. 2020).

In the longer term, investments in climate-friendly production and an increased recycling of materials have the potential to deliver three main benefits. This offers a further motivation for delivering a recovery package with: 

a) Inclusive Transformation that creates new lead markets for climate-friendly production of materials as well as recycling services and low-carbon products, and thereby boosts the activity of innovative companies active in different EU member states. 

b) Scale-up of low-carbon technology that will trigger demand for new production and sorting technologies at industrial scale. 

c) Resilience of integrated value chains in Europe against future crises, by ensuring that companies have access to climate friendly materials while reducing their exposure to energy and raw material costs by enhanced recycling that closes the loop of the lifecycle of products.

In order to support the design of the EU as well as individual member state recovery packages, this report aims at exploring whether investments in low-carbon projects could be accelerated to contribute to the recovery while jump-starting the decarbonization of the European basic materials industry and enhancing its competitiveness.

We first assess viable low-carbon technology options for climate-friendly investments in the scope of the recovery package. Based on insights from industry experts, we highlight the necessary elements of a recovery package which could help to realize these investments and discuss how they can support recovery objectives.

Authors:  Karsten Neuhoff, Frederik Lettow, Olga Chiappinelli, Timo Gerres, Eugenie Joltreau, Pedro Linares, Aleksander Sniegocki