Our Methodology

The Green Recovery Tracker platform provides concise information on national recovery measures in EU member states and assesses their contribution to the green transition. It offers evidence-based information to policy- and decision-makers in European and national institutions as well as in other organisations.

We assess the effects of individual measures contained in national recovery plans and packages on the transition to a climate neutral economy. We focus on if supported activities significantly contribute to climate change mitigation efforts. The key indicator for our assessments is the effect of any given measure on climate mitigation, i.e. emissions reductions, in the context of the transition to climate neutrality. In doing so, our independent assessment methodology builds on the EU taxonomy1 as well as, with regards to climate mitigation, on the climate tracking methodology outlined in Annex VI of the RRF Regulation2.

As shown in the table below, our assessment framework ranges from “very positive” to “very negative”, with different shades of green and categories for measures that cannot be directly assessed. Measures that are fully supportive of the green transition achieve the best assessment, and measures that are strong obstacles to this transition receive the worst score.  

To mirror the approach used by the European Commission in the assessment of national recovery plans, “very positive” measures are fully counted towards the green spending share, while “positive” measures are weighted using a coefficient of 40%.3 We then combine the relevant coefficient for each measure with the associated costs, summing them up to derive an overall green spending share.  

This makes our overall assessment approach comparable with that used in the formalRRF process, even though our individual assessments may differ from those in the formal process in some limited areas. We explain our reasoning for some of these cases further below, and all our individual assessments can also be accessed via the respective country pages. 

Our quantitative analysis only covers measures announced within longer term economic recovery packages from the Covid-19 crisis. These are of particular importance to the green transition. Short-term liquidity and stabilization measures that are part of countries' immediate crisis responses are mentioned in individual country profiles but are outside the scope of our quantitative assessment. 

In addition, we are collecting qualitative data on political narratives, governance, monitoring and enforcement mechanisms as well as major state aid decisions throughout the crisis and recovery phase. All quantitative and qualitative analysis is compiled in a country report.

Assessment

Very positive

100%
Definition
Measures that make a significant, transformative contribution to climate change mitigation
Examples
Renewables, efficiency measures with strong standards, green hydrogen, e-mobility without support for combustion engines, ...
Assessment

Positive

40%
Definition
Measures that make a positive contribution to transition and mitigation efforts
Examples
Mixed funding for carbon-intensive industries with weak green conditionalities, support for climate mitigation measures with weak conditionalities or standards, Just Transition funding, ...
Assessment

Likely no significant climate effect

Examples
Most healthcare and social support measures, ...
Assessment

Likely climate effect but direction not assessable

Examples
Measures combining positive and potentially harmful elements (e.g. support for efficiency measures alongside investments into new gas infrastructure), measures that could have a positiveor negative impact depending on their design(e.g. some digitalization measures, general investment support for local governments), ...
Assessment

Negative

Definition
Measures that stabilize the fossil-based economy
Examples
Generalized tax cuts (e.g. VAT), hybrid cars, ...
Assessment

Very negative

Definition
Measures that directly support fossil industries which block the green transition
Examples
Unconditional funding for carbon intensive industries, support for fossil fuels, ...

In specific cases, the level of detail does not allow for an assessment based on the taxonomy or the RRF climate tracking methodology. In others, the assessment is politically controversial. These cases and our assessments for them are explained in more detail below.

Moreover, due to our focus on greenhouse gas emissions, certain measures that do not contribute to mitigating greenhouse gases, but have other socially or environmentally favourable impacts, may not receive a positive rating. This might include measures to protect and enhance biodiversity, or climate change adaptation measures, as long as they do not have a direct impact on greenhouse gas mitigation.

Background note: Potentially controversial cases

Generalized consumption incentives, such as VAT cuts

Generalized consumption incentives such as VAT cuts are not contributing to the transition to a climate neutral economy but are rather stabilizing the current fossil fuel-based economy. Furthermore, economic modelling shows that green recovery measures are more effective at mobilizing investments and stimulating the economic recovery than generalized tax cuts.4We therefore assess such generalized consumption incentives as negative.

Biodiversity and climate adaptation measures

Measures to enhance biodiversity as well as climate adaptation measures must play an important role in the transition to a more resilient and sustainable economy. However, they are currently outside of the scope of our assessment framework, which only focuses on the effects of measures on climate change mitigation, i.e. emissions cuts. Therefore, we currently assess such measures - unless they have a direct effect of emissions, such as planting trees - as having likely no significant climate mitigation effect. It is important to note that climate change adaptation measures are awarded a 100% climate contribution coefficient in the RRF climate tracking methodology – here, our methodological approach deviates from the RRF due to our focus on emissions. We highlight possible differences in assessments in the respective country reports of countries with a high share of adaptation measures.

Investments into natural gas infrastructure and power plants

Following the Commission’s proposed criteria for electricity and heat and power plants in the sustainable finance taxonomy regulation, we note that currently no gas infrastructure without CCS is capable of meeting the required emissions standards.5This is the case as the most efficient natural gas plants have an average emissions intensity of ca. 340g CO2/kWh, while the requirement for an assessment as sustainable would be a maximum of 100g CO2/kWh. Furthermore, we note that existing natural gas infrastructure in the EU can satisfy the EU demand for natural gas in any scenario, and that therefore public funds such as the recovery funding should be directed to best in class solutions, such as efficiency measures and renewables, while investments into natural gas infrastructure would significantly increase the risk of a lock-in into fossil fuels and stranded assets.6For these reasons, we assess exclusive investments into natural gas infrastructure and power plants as very negative.

Investments into nuclear power

We note that there are significant concerns regarding the compliance of investments in nuclear power with the “do no significant harm” criteria in the context of the EU taxonomy. Therefore, we assess investments into nuclear power (except for safety upgrades) as negative.

Automotive, shipping and aviation measures

We categorize automotive, shipping and aviation measures affecting the “industry” (not “mobility”) sector if they are aimed to support production (not demand). All measures that support the existing technologies based on fossil fuels have a negative climate impact (this includes measures that aim to improve the existing technologies e.g. by emitting 30% less CO2). We argue that such measures may have transitory elements, but do represent an inertia for alternative, fossil-free technologies in markets which are dominated by incumbents. If the measures are in the field of research and development, the assessment may differ. In case of measures that support fossil-free technologies (e.g. e-mobility), we see a positive or very positive climate impact.

1See e.g. EU Technical Expert Group on Sustainable Finance (2020). Taxonomy Report: Technical Annex
2See EuropeanParliament (2021).
3European Commission (2021). Guidance to Member States: Recovery and Resilience Plans
4Cambridge Econometrics & We Mean Business (2020). Assessment of Green Recovery Plans after Covid-19
5Euractiv (2020). Gas denied ‘transition’ fuel status in draft EU green finance rules
6 CAN Europe et al. (2020)