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The EIB report also said Ireland constantly lags behind in terms of climate investments, showing ‘little interest’ in these investments over the past three years.
Europe needs to raise its productive investments in order to keep pace with competition and meet its net-zero goals, according to a new report.
The latest investment report by the European Investment Bank (EIB) found that an investment of €1trn per year is needed in the EU to reduce greenhouse gas emissions 55pc by 2030.
The EIB said investments to limit the climate crisis are on the rise, but are still “well below what is needed” to hit the net-zero emissions goal by 2050.
This issue is also linked to the fact that EU companies appear less willing to innovate than companies around the world, according to the EIB.
The bank’s latest investment report claims there is a persistent gap between EU and US companies in terms of adopting new technology or innovating, which has lingered for more than 10 years. The difference in productive investment based on GDP appears to be 2pc.
The EIB said many businesses cited uncertainty, skill shortages and high energy costs as major constraints on investment.
EIB chief economist Debora Revoltella said Europe’s future depends on its ability to “transform and embrace the digital and green transitions”, which requires “bold investment” in the public and private sectors.
“However, uncertainty, driven by unpredictable policy and market conditions, is proving to be a barrier to investment decisions,” Revoltella said.
The report suggests that Europe has a potential edge in green technologies such as transport, smart grids and wind energy. But the EIB also warned that competition in this sector is rising worldwide.
The EIB report suggests countries in Western and Northern Europe are “at the forefront” of climate investment, while Central Europe appears to be catching up.
However, Ireland was among countries that “constantly lag behind, and also show little interest in investing in climate in the next three years”, according to the report.
“The opportunity of the green transition cannot be missed,” Revoltella said. “Europe can leverage on its innovation lead in many green technologies and should further exploit the potential of the EU single market, reducing administrative hurdles for investment and addressing gaps in skills.”
In January, a report by PwC and SustainabilityWorks said the Government needs to connect entrepreneurs, regulators and investors in a “one-stop-shop” to support Ireland’s climate tech sector.
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