Sunday, 4 May 2025
Home Topics Business EU likely exaggerating climate-friendly spending, auditors say
BusinessEconomyFinanceNewsPolitics

EU likely exaggerating climate-friendly spending, auditors say

193
FILE PHOTO: A dried lake is seen at Azienda Agricola organic farm following a drought on the Italian island of Sicily, in Caltanissetta, Italy, August 25, 2024. REUTERS/Louiza Vradi/File Photo
FILE PHOTO: A dried lake is seen at Azienda Agricola organic farm following a drought on the Italian island of Sicily, in Caltanissetta, Italy, August 25, 2024. REUTERS/Louiza Vradi/File Photo

BRUSSELS – The EU is exaggerating spending on climate-friendly projects, potentially by billions of euros, the bloc’s auditors said on Wednesday, citing examples of countries claiming spending on IT systems and salaries as green.

The 27-country EU has pledged to spend at least 37% of its €700 billion ($774 bn) COVID-19 recovery fund, comprising loans and grants, on measures to address climate change.

By the EU’s own estimate, countries have exceeded that goal and by February had earmarked €275 billion, 42.5% of the funds allocated so far, on investments to help meet green goals.

That figure may be overestimating the EU’s green spending by at least €34.5 billion, the auditors said.

The European Court of Auditors’ analysis found EU countries had labelled numerous projects as green despite having only a tenuous link. They included IT systems to digitalise a water supply system. That was rated by Croatia as having a 40% climate contribution, which the auditors said should been 0%.

In another example, Slovakia ranked the salaries of its staff managing the COVID-19 fund as climate-friendly spending, the auditors said.

Others had unclear climate benefits. A Portuguese investment in public transport, tagged as 100% green, did not count the emissions that constructing the project would produce – making it difficult to estimate net savings once completed, the auditors said. Similarly, the impact of a Greek hydropower plant was not assessed for its negative impact on biodiversity.

In response, a European Commission spokesperson said the COVID-19 fund had channelled significant resources into green projects, and it had thoroughly checked countries’ planned spending.

‘Little indication’

The auditors also noted examples of good practice – including a Greek €1.25 billion plan to make energy savings in more than 100,000 homes. Other spending labelled as green included renewable energy projects, railways and electric car charging infrastructure.

But overall, the EU’s system of ranking projects’ climate contribution, under which they are given a 0%, 40% or 100% ranking, was not specific enough and was leading to exaggerations, the auditors said.

This method “ultimately provides little indication of how much money goes directly to the green transition,” said Joelle Elvinger, the auditor who led the report.

The Commission said its methodology provided sufficient accuracy, and imposing more granular rules would create complex bureaucracy in future funds.

Related Articles

Lilium burnt through huge sums while trying to develop its jet (AFP)

German flying taxi start-up’s rescue deal collapses

A German flying taxi start-up said on Friday it would halt operations...

FILE PHOTO: U.S. Secretary of the Interior Doug Burgum speaks as he attends a signing ceremony with members of the West Virginia Congressional Delegation at the EPA headquarters in Washington, D.C., U.S., February 18, 2025. REUTERS/Kent Nishimura/File Photo

US energy council chief says power plants to produce 15% more electricity

By Valerie Volcovici WASHINGTON (Reuters) – U.S. Interior Secretary and co-chair of...

Cuba has inaugurated a new solar energy park in the capital Havana (AFP)

Cuba opens solar park hoping to stave off blackouts

Cuba on Friday unveiled a new solar energy park in the capital...

FILE PHOTO: Cranes unload imported iron ore from a cargo vessel at a port in Lianyungang, Jiangsu province, China October 27, 2019. REUTERS/Stringer/File Photo

Iron ore heads for weekly gain on brightening demand outlook, China stimulus hopes

By Amy Lv and Lewis Jackson BEIJING (Reuters) -Iron ore futures prices...