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The EU passed the world’s largest green stimulus package—but is it green enough?

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On Tuesday, leaders of the 27 European Union countries concluded a marathon 90-hour summit in which ministers hashed out the details of what is being touted as the world’s largest green stimulus package.

Over the course of four days, the EU members settled on both a seven-year budget and a special pandemic-recovery package that earmarks a collective $630 billion for spending against climate change. Despite the gruelling debate, the funding isn’t secure yet.

“Today we’ve taken a historic step, we all can be proud of. But other important steps remain. First and most important: to gain the support of the European Parliament. Nobody should take our European Union for granted,” European Commission President Ursula von der Leyen tweeted Tuesday.

The European Parliament, comprised of 705 representatives elected by vote in their home countries, is convening Thursday to debate the funding proposal and vote on its approval. The head of European Parliament, David Sassoli, has already indicated he will push amendments on the bill—such as reinstating funds cut from education and research.

Environmental campaigners have criticized other aspects of the proposal. For starters, the amount pledged is significantly lower than initially targeted. The amount of grants to be issued was cut from $570 billion to $450 billion, and some worry even the original amount wouldn’t be enough.

Research commissioned by the European Climate Foundation and conducted by EY found 1,000 “shovel ready” green projects supporting over 2 million jobs that could be funded with $231 billion. But reports from German consultancy Climate & Company, say meeting the EU’s emission goals will require around $3 trillion in investment over the next seven years. Goldman Sachs analysts estimate it will require $7 trillion by 2050.

(This could be an opportunity for private investment, which is already chasing green energy makers in Europe.)

Meanwhile the Just Transition Fund—a flagship financing tool designed to help countries transition from fossil fuels—had its capital slashed to $20 billion from a proposed $43 billion. One of the fund’s biggest beneficiaries will be Poland—the only EU member state that rejected the EU’s 2050 target for net-zero carbon emissions. Last Friday, Poland also set aside $33 million to buy coal and prop up the domestic mining industry.

More broadly, the budget is criticized for not being specific about what industries will be prohibited from financing. Bas Eickhout, a Dutch Green member of the European Parliament, told Reuters the deal should have pledged not to fund fossil fuels and been clear on how it would wean member states off of fossils.

“The fact that they didn’t do that, that says a lot,” Eickhout said.

More below.

Eamon Barrett
eamon.barrett@fortune.com

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