Industry Support at All Costs: How InvestEU Undermines The Just Transition

Less than two weeks after political leaders and industry CEOs met at the third European Industry Summit in Antwerp (11 February), this report warns that InvestEU, the EU’s flagship mechanism to mobilise private investment in support of the Union’s climate and industrial priorities is expanding public guarantees while failing to ensure policy steer and democratic accountability. The instrument is set to become the cornerstone of the upcoming European Competitiveness Fund (ECF) under the next EU budget. However, unless reformed, it will fail to ensure that industries increase productive investment and contribute to a just transition.

The proposed ECF is expected to scale up the use of de-risking instruments. The European Commission celebrates InvestEU’s alleged success in mobilising nearly €300 billion over four years. These numbers are based on estimations, while only a fraction of investments have already materialised. Moreover, a comprehensive assessment of InvestEU’s contribution to mobilising new investment in the real economy is still lacking, despite several critical reports by the European Court of Auditors questioning the added value of InvestEU’s predecessor — the Juncker Plan — and its potential role in the  European Competitiveness Fund.

According to the report’s findings, InvestEU has critically lacked policy steer from the outset. Vague definitions of 'additionality' have allowed public guarantees to support projects proposed by companies with ample own resources and access to funding on financial markets without ensuring they truly benefit society or the environment. Expanding de-risking tools under such loose criteria risks further weakening accountability in the use of public money.

At a moment when EU-level public investment in decarbonisation and support for a just transformation are most urgently needed, the report argues that InvestEU risks fuelling a failing industrial policy that does not combine decarbonisation with increased productive investment in the European economy, let alone promote a transition that leaves no one behind. These concerns must be addressed before replicating or scaling up the InvestEU model within the ECF.