Europe has a financing gap for green mobility, report finds

Europe has a financing gap for green mobility, report finds

  •  Release date: 19 April 2018
  •  Reference: 2018-094-EN

A new “InnovFin – EU finance for innovators” report on innovative transport finds that innovative transport lacks between EUR 5.5 and EUR 13 billion of investments, annually.

  • EIB authored report shows a financing gap especially during the growth stage, particularly for companies developing urban green mobility services and alternative fuel technologies.
  • Standardized EU-wide definitions and regulation of mobility services recommended, public transport operators should open up to 3rd party mobility platforms.
  • Financial support should be made available to support uptake of alternative fuels in public fleets and related value chain.

With an innovative transport market that is subject to major disruption, addressing the growth finance gap and other policy and regulatory challenges faced by companies in the innovative transport sector is the aim of the recommendations of the new InnovFin Advisory report that was presented at the TRA Conference in Vienna early this week. The new report, “Financing innovation in clean and sustainable mobility”, a study on access to finance for the innovative road transport sector performed by the European Investment Bank, is supported under EU’s research and innovation programme Horizon 2020.

The report analyses access to finance issues and other bottlenecks limiting or delaying investments in three segments of Innovative Transport; i) urban green mobility solutions; ii) low carbon vehicles and iii) automated and connected road transport. The study identified a financing gap of between EUR 5.5 and 13 billion annually for European companies developing technologies and services in these areas.

Despite major investments globally, with overall funding volumes doubling annually over the past five years the study finds that the distribution of money has remained highly uneven, concentrated on specific business models and on a few individual companies, most of them outside the EU. Furthermore, a lack of standards and common regulations across Europe go hand in hand with the bottleneck of access to suitable financing opportunities.

“In such a dynamic environment, European Institutions have a pivotal role to play in the setting of targets, standards and regulatory principles, but even more so in spurring investment into cleaner and more sustainable mobility” said President Werner Hoyer. “The EIB is playing a major role in the decarbonisation of transport in Europe: lending to sustainable transport sectors has been steadily increasing and now constitutes the majority of our yearly transport lending volumes.”

The study puts forth a set of nine recommendations, for the European Commission, the EIB and the wider industry and investors’ community to consider, to address the identified finance and policy gaps.

The full study is available here

Background information

The European Investment Bank (EIB) is the long-term lending institution of the European Union and is owned by the EU Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. In 2017, the EIB supported the transport sector with nearly EUR 11.6bn. For more information please click here.

Under Horizon 2020, the EU research and innovation programme for 2014-2020, the European Commission and the EIB Group (EIB and EIF) have launched a new generation of financial products and advisory services to help innovative firms access finance more easily. InnovFin – EU Finance for Innovators offers a range of tailored products which will make more than €15 billion of financing support for research and innovation (R&I) available to small, medium and large companies and the promoters of research infrastructures.

InnovFin Advisory aims to improve the 'bankability' and investment-readiness of large projects that need substantial, long-term investments. It also provides advice to improve the conditions for access to risk finance for R&I and advises on the set-up of thematic investment platforms. The main clients foreseen are promoters of large R&I projects that meet Horizon 2020's Societal Challenges. InnovFin Advisory has a large portfolio of horizontal activities and a strong track record in advising innovative companies to enhance access to EIB and / or other financing.

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