The European Banking Federation has published a report titled "Increasing bankability of transition & the Clean Industrial Deal" following its July 3, 2025 event on making the Clean Industrial Deal bankable, hosted with the Net Zero Banking Alliance and the UNEP Finance Initiative. The report argues that accelerating capital flows to industrial decarbonisation is mainly held back by a shortage of transition projects that are viable for investors and compatible with banks’ financing requirements, rather than by insufficient capital. It estimates the public sector can cover only 20 to 25% of the investment needs for the environmental transition, while private financial institutions could contribute up to 55%, leaving a remaining gap despite high European household savings and investor appetite. The report identifies two key obstacles: weak demand and uncertain profitability for many transition projects, particularly those based on emerging technologies with unattractive risk-return profiles and volatile cash flows, and a complex regulatory and public financing environment marked by lengthy permitting and fragmented, cumbersome access to public incentives that also limits SME participation. Proposed solutions include stronger de-risking through public guarantees and risk-sharing, better-aligned policy incentives such as greener subsidies and price corrections including carbon pricing, streamlined administrative processes, and greater use and standardisation of blended finance alongside more tailored banking instruments and advisory support.
European Banking Federation 2025-09-11
European Banking Federation report finds Clean Industrial Deal finance constrained by lack of bankable transition projects rather than lack of capital
The European Banking Federation's report, "Increasing bankability of transition & the Clean Industrial Deal," identifies the main barrier to industrial decarbonisation financing as a lack of viable transition projects, not insufficient capital. The public sector can cover only 20-25% of investment needs, with private institutions potentially contributing up to 55%, leaving a gap due to weak demand, uncertain profitability, and regulatory complexities. Proposed solutions include public guarantees, policy incentives, streamlined processes, and standardised blended finance.