While we all know that energy efficiency and renewable energy are the keys to fighting climate change in the long term, they are also a vital part of the solution to the current energy crisis.

By Werner Hoyer, President, European Investment Bank and André Küüsvek, President, Nordic Investment Bank

A green transition is vital to solving Europe’s energy problems

Russia’s aggression in Ukraine has pushed Europe into an energy crisis. The need for action is urgent. Europe must build up its energy resilience and accelerate its transition to a low-carbon economy.

Energy efficiency – in industry and homes – as well as renewable generation need to be scaled up now. Industry has been able to reduce its gas consumption more quickly than expected and many countries have long pipelines of renewable projects and grid connections that are just waiting to be built. The more we invest in clean energy today, the less we will heat the planet and, the less dependent we will be on costly imported energy from unreliable or even malign suppliers tomorrow.

While we all know that renewable energy is the key to fighting climate change in the long term, it is also a vital part of the solution to the immediate challenges that we currently face. We must build our energy resilience in a sustainable way. 

Russia’s invasion has reminded us of the importance of safeguarding the security of our energy supply. Put simply, energy is a security issue and decarbonisation is a matter of strategic autonomy.

The political commitment to these goals is evident in numerous recent initiatives, including the Versailles conclusions on energy, the European Commission’s REPowerEU plan and, more recently, the Marienborg declaration by the Baltic Sea states.

The challenge will be to maintain our determination as the cost of the current energy crisis bites, hurting businesses and households and pushing economies towards recession. Societies need to tackle the issue of just transition with the immediate burden coming from higher energy prices. 

The European Commission estimates that, for Europe to become independent of Russian gas, €270 billion of additional investment is required in energy efficiency, renewable energy and electricity networks until 2030.

International financial institutions such as the Nordic Investment Bank (NIB) and the European Investment Bank (EIB) have an important role to play in times of crisis. As commercial lenders become more cautious and reluctant to lend, institutions like ours are ready to step in and fill the gaps. With high credit ratings and stable funding bases, we offer long-term financing to important projects. This mobilises additional private investment, even in the darkest days.  

Cooperation between national, regional and EU institutions is vital. Both the European Investment Bank and the Nordic Investment Bank have a long track record of financing large projects and working together. In the last five years, the cooperation saw some €10 billion in co-financed projects, with more to come. 

Our common projects cover many sectors ranging from transport infrastructure to schools and hospitals. In Latvia, we supported a new bypass that will divert transit traffic away from densely populated areas of Kekava to a new route, reducing pollution and congestion, and improving road safety. In Espoo, Finland, we helped finance the construction of eight schools and day-care centres that will serve 4 000 children and young people.

In the energy sector, our two institutions have contributed to many important flagship projects, including wind farms, advanced batteries, and energy links between countries. The construction of Northvolt’s large-scale lithium-ion battery cell manufacturing plant in Northern Sweden will deliver the world’s greenest lithium-ion battery with a minimal CO₂ footprint. Support for Vestas Wind Systems in Denmark is a strategic step for the energy transition from traditional sources to renewable energy and climate mitigation. Such projects contribute not only  to Europe’s competitiveness and autonomy, but through research and development to the entire world’s green transition.

In this hour of need, we feel the weight of our responsibilities and are ready to do more. The European Investment Bank and the Nordic Investment Bank are committed to deepening their cooperation, particularly in the Baltic Sea region. That means clean and secure energy, for small businesses and local communities, and for innovation. Ultimately, all this makes for a more sustainable future.