Biodiversity financing

Overview

The EU Biodiversity Strategy for 2030 aims to put Europe's biodiversity on a path to recovery by 2030 with benefits for people, the climate and the planet. To achieve this, the EU is mainstreaming the objectives of the strategy in the EU budget for 2021-2027 and the EU Recovery and Resilience Facility.

In 2021, the Commission pledged to double its international funding for biodiversity, in particular for the most vulnerable countries, between 2021 and 2027.

Overall spending under the EU budget must be biodiversity-proof. It is crucial to ensure that the overall EU spending has no negative impacts on biodiversity and supports the achievement of our biodiversity targets.

Objectives

The EU is working towards the ambition of dedicating 7.5% of the 2021-2027 Multiannual Financial Framework to biodiversity objectives as of 2024, and 10% in 2026 and 2027.

The Biodiversity Strategy has committed to the following actions:

'at least €20 billion a year should be unlocked for spending on nature' – through private and public funding at national and EU level, including through a range of different programmes in the next long-term EU budget.
'a significant proportion of the [25]% [note: now 30%] of the EU budget dedicated to climate action will be invested on biodiversity and nature-based solutions'. Increasing synergies between climate and biodiversity finance provides significant potential to help boost investments in biodiversity and nature-based solutions.
'under Invest EU, a dedicated natural-capital and circular-economy initiative will be established to mobilize at least €10 billion over the next 10 years, based on public/private blended finance'

Tracking biodiversity expenditure in the EU budget

Tracking how much is spent on biodiversity objectives ensures that efforts and spending have the desired positive outcomes for biodiversity and human well-being. Additionally, as a party to the UN Convention on Biological Diversity, the EU must report on its domestic and international biodiversity-related financial flows.

In May 2022, the Commission released a study on biodiversity financing and tracking, which

presents the proposed new tracking methodology for biodiversity in the 2021-2027 budget
provides an assessment of the funding needs to implement the EU Biodiversity Strategy for 2030, current levels of funding, and the remaining finance gap
finds that the scale of financing needs to deliver the Strategy, including baseline expenditure, is estimated at around EUR 48 billion annually between 2021 and 2030 (significantly higher than the annual EUR 20 billion highlighted in the Biodiversity Strategy)
estimates expenditure on biodiversity at around EUR 29 billion annually over 2021-2030 including from the 2021-2027 EU budget and Member States national budgets and private financing
estimates the remaining financing gap at around EUR 19 billion per year from 2021 to 2030

See the final biodiversity tracking methodology adopted by the Commission.

See the methodology to track biodiversity in the 2014-2020 EU budget.

Biodiversity proofing the EU budget

The funding instruments of the 2021-2027 Multiannual Financial Framework and Next Generation EU - mainly the Recovery and Resilience Facility - include specific requirements to ensure that EU co-financing biodiversity into account. These include

the obligation to comply with EU environmental legislation
compliance with the ‘do no significant harm’ principle
the application of sustainability proofing

Previously, the Commission developed a practical framework including guidance on developed a practical framework including general and fund-specific guidelines to be used by national and regional authorities as well as by Commission services.

Scaling up nature-positive investments

Halting the loss of biodiversity and adapting to climate change requires increasing investment in natural capital to complement the more traditional grant-based funding.

Under the Invest EU programme, a dedicated natural-capital and circular-economy initiative is being established. This will mobilize at least EUR 10 billion over the next 10 years, based on public and private blended finance.

An additional technical assistance and advisory component is provided by the LIFE programme of up to EUR 50 million. This will support this action, alongside the European Investment Bank, European Investment Facility and other National Promotional Banks.

In particular, within this budget commitment, the Green Advisory Service for Sustainable Investments Support (Green Assist) is a new advisory initiative under InvestEU. It aims to build a pipeline for green investment projects that have a high impact and greening more traditional investments. Out of the EUR 50 million available, up to 30 are earmarked for Green Assist, whilst up to 20 will finance the “LIFE top-up” to the Sustainable Infrastructure Advisory, practically speaking financing EIB advisory initiatives supporting green projects.

Scaling up nature-positive investments under InvestEU and Green Assist build upon the lessons learned from the Natural Capital Financing Facility financial instrument developed by the LIFE programme and implemented by the European Investment Bank. From 2014 to 2022, this Facility supported natural capital projects that can generate revenues or save costs, whilst delivering on biodiversity and climate adaptation objectives.

Sustainable Finance and Taxonomy

The EU is making sustainability considerations an integral part of its financial policy to support the European Green Deal through its sustainable finance policy.

Contact

For questions about EU environmental policy, please contact Europe Direct.