This study investigates the feasibility, design, and macroeconomic implications of introducing a green interest rate into the European Central Bank’s (ECB) monetary policy framework. Building on recent advancements in green finance taxonomy and regulatory disclosure, the report argues that preferential interest rates for loans financing taxonomyaligned green investments would be legally and operationally viable in the ECB’s forthcoming operational framework, subject to adequate safeguards and policy calibration. Using bank-level data from 47 EU banks, the study estimates that at least €10 billion in eligible green lending could be supported each year. The analysis demonstrates that targeted support for investments in energy efficiency, renewables, energy grid, and sustainable transport can reduce Europe’s vulnerability to energy price shocks, with potential disinflationary effects in the medium term.
Recommended citation:
Jourdan, Stanislas (2025) In everyone’s interest: How the ECB can support the energy transition with green interest rates. WWF-EU. Available at: https://wwfeu.awsassets.panda.org/downloads/in-everyones-interest-december-2025.pdf.