1.8 Biodiversity investment needs

This briefing explores how the EU and its Member States have funded action on biodiversity through EU and international mechanisms during the 2014-2020 multiannual financial framework (MFF) and the projected MMF funding for 2021-2027. The briefing compares these periods against EU and international biodiversity funding targets. It assesses whether the funding allocations align with the current biodiversity status in Europe as highlighted in the EEA 2020 assessment.

Key policies

• The EU biodiversity strategy for 2030 promotes actions to protect nature and reverse ecosystem degradation. It targets an annual EU budget for biodiversity of EUR 20 billion (i.e. EUR 20,000 million).
• The EU Nature Restoration Regulation promotes public and private funding schemes to support stakeholders, including landowners, farmers, foresters and fishers, in implementing restoration measures.
• The EU funding programmes fund biodiversity through numerous routes such as the common agricultural policy and cohesion policy.
• The EU Climate Law promotes biodiversity while fighting climate change. Out of the EU budget dedicated to climate change, 30% will be invested into biodiversity and nature-based solutions.

Past trends (10-15 years)

Improving trends/developments dominate

Biodiversity funding in the EU and its Member States, including international contributions, rose from EUR₂₀₂₄ 23 billion in 2014 to EUR₂₀₂₄ 31.2 billion in 2019, totalling EUR₂₀₂₄ 179.4 billion. EU spending grew consistently while Member State funding remained stable (see Figure 1). However, this funding is still at the lower end of the estimated annual need of EUR 20-35 billion.

Despite increased funding during the 2014-2020 MMF, the 2020 State of nature in the EU assessment shows ongoing biodiversity decline due to habitat loss, invasive species, pollution and overexploitation. Protected areas also suffer from inadequate management and funding. Significant improvements require stronger policies, better conservation efforts, longer time horizons, targeted resource use and addressing resource gaps.

Outlook (10-15 years)

Trends/developments expected to show a mixed picture

The projected biodiversity funding for the EU and its Member States for 2021-2027 shows significant disparities and an investment gap. Starting at EUR 31.8 billion in 2021 and peaking at EUR 32.8 billion in 2022, funding declines to EUR 28.5 billion by 2027. The EU aims to allocate 7.5% of its budget to biodiversity in 2024-2025, increasing to 10% by 2026-2027, although projections suggest it will only reach 8.5% during this latter period. With updated annual funding needs of EUR₂₀₂₄ 54 billion, there is an average annual gap of EUR₂₀₂₄ 21.4 billion (published amounts adjusted to constant 2024 prices).

To help bridge this gap, the EC and the European Investment Bank are exploring innovative financial tools, such as biodiversity certification and nature credits, to attract private capital and create favourable market conditions for investments in biodiversity. These financial mechanisms aim to incentivise businesses to adopt sustainable practices that contribute to a nature-positive economy. By mobilising both public and private investments, the EU seeks to close the funding gap and ensure a more sustainable, nature-driven economic model.

Prospects of meeting policy targets, 2030/2050

2030 Partially on track to meet targets/highly uncertain

While the EU BDS for 2020 emphasised funding, it lacked specific investment targets. The outlook for meeting the BDS 2030 target of EUR 20 billion annually during 2021-2027 appears promising. However, the EC estimates annual investment needs of EUR₂₀₂₄ 54 billion to achieve biodiversity goals, so the allocated funds fall short within the designated timeframe. Furthermore, this estimate does not fully account for the additional costs of sustainable soil management, which could require an additional EUR 17 billion per year.

Strategic planning, and increased public and private investments, will be crucial to enhance the likelihood of meeting biodiversity investment needs. Moreover, integrating biodiversity investments into the sustainable finance agenda is vital for mobilising additional resources for biodiversity conservation.

2050 No specific policy target

Robustness

The analysis highlights challenges in EU biodiversity funding data, including uncertainties and gaps. Tracking has improved since the 2014-2020 MFF, with a new methodology for 2021-2027. However, comprehensive data remain lacking, particularly for Member States and private funding, which affects biodiversity financing figures' accuracy and reliability. Additionally, Member State contributions have been recorded for 2021–2024 (see Figure 1), while the allocated amounts for 2025-2027 are based on the EC’s projected annual budget of EUR 13.4 billion for the 2021-2027 Multiannual Financial Framework (MFF), acknowledging the limitations of this analysis. These uncertainties underscore the need for improved data collection and reporting mechanisms.

Charts/maps

Figure 1. Estimated value of EU and Member State funding action within the EU, including international financing contributions for biodiversity (EUR billion, adjusted to 2024 values)