The Paris climate agreement sends a clear message to investors, business and policymakers all around the world. For the first time, 175 parties, accounting for more than 90 per cent of global greenhouse emissions, committed to transitioning to a low carbon and climate-resilient economy.
Long before Paris COP21, the EU had a solid track record on reducing emissions. We are on the way to reach our targets for 2020 and the European Council has recently set out even more ambitious targets for 2030. However, this cannot be a reason for complacency - the hard part is turning pledges into action.
2016 is the year for continuing to take action and implement the Paris agreement. This can only be achieved through far-reaching changes in our economies. Resources have to shift away from polluting fuels and inefficient production systems to clean and efficient energy sources.
This transformation has to put the consumer at the core of the system, taking ownership of the energy they produce and consume.
Engaging in this profound transformation of our societies and economies will also bring new opportunities for innovative companies and multiple benefits to citizens. These include job creation, smarter products, as well as cleaner and more secure energy supplies.
According to the International Energy Agency, full implementation of the Paris agreement will require €12 trillion from 2015 to 2030 in energy efficiency and low carbon technologies. The innovative companies
to seize this opportunity first and adapt to these changes will have the economic upper hand over those that continue with old practices.
A low carbon energy system requires smart financing. The private sector has a key role to play; EU companies must maintain their leading role in renewables and strengthen their energy efficiency. But the ball is not only in the court of investors: the EU will provide appropriate tools for promoting decarbonisation of markets through innovative channels of financial assistance.
The EU budget for 2014-2020 has already increased its allocation of funds for sustainable projects, and the newly-created European Fund for Strategic Investment (EFSI) can be a catalyst for this type of investment.
EFSI was created a year ago in order to bridge the investment gap facing the EU following the financial crisis, unblocking €315bn. The fund was particularly successful within the sustainability sector; so far, energy and climate-related projects account for around 50 per cent of the approved operations under EFSI's infrastructure and innovation window.
By 2030, half of our electricity will be powered by renewables. It will be carbon-free in around 35 years. This will require a continuous and massive flow of financing. In an e ort to contribute to this change, EFSI expects to trigger a total investment of €8.6bn in the renewable sector by 2018.
Last month, an investment of €292m euros was signed, for an offshore wind farm in Scotland that will cover up to 588 MW. This is equivalent to the energy consumption of more than 475,000 homes.
This is not an isolated example, there are currently 12 renewable projects financed by EFSI across Germany, France, Belgium, Austria, Ireland, Sweden and the United Kingdom. I am confident that in a few years the number of renewable energy projects financed will multiply and broaden the geographical scope.
The political will to maintain financing opportunities is there, and more and more member states are shifting to cleaner and greener practices.
Another priority of this Commission is energy efficiency. The EFSI is decisively contributing by financing its needs. It represents a milestone for the future low carbon economy, and a win-win policy. It has enormous potential to reduce our energy imports, enhance our security and improve our competitiveness.
In France we have a clear example of how EFSI and the cooperation between public and private sectors can promote energy efficiency. EFSI has ensured funding of public and public-private companies that assist homeowners in improving energy efficiency in their residential buildings. This project will create almost 6000 jobs and will trigger an investment of €800m.
Let me conclude with our most recent developments on the Paris agreement: we just presented its ratification proposal. However, the legislative framework will not have significant effects on its own; we need to support those with the know-how and technology to implement it.
Therefore, we need an alliance between policymakers and investors that continues the sustainability revolution and keeps our leadership position in the transition to global clean energy.
EFSI exemplifies this alliance and it will continue being a reference of our efforts in the fight against climate change.