Eurazeo ex-CEO: Decarbonisation is a ‘battle’ for European competitiveness — with €7 trillion at stake

Virginie Morgon, co-founder of Ardabelle Capital and former chief executive of Eurazeo, has warned that without rapid decarbonisation Europe risks sacrificing €7 trillion in potential GDP growth by 2050 – almost twice Germany's current economic output.

"This [the green transition] is not an ideological debate, but a battle for resilience and competitiveness," Morgon, one of the most influential figures in European private equity, said in a press statement today.

Ardabelle, which hit a €250mn first close on its inaugural fund last year, published the findings in a new report modelling four scenarios for the European economy through 2050.

Inaction leaves GDP at roughly €20 trillion by 2050, barely any growth as climate damage and geopolitical shocks compound, the report finds.

The best, "resilient green" path, generates GDP well above the natural growth trajectory, to €27 trillion by mid-century.

The report frames decarbonisation as an economic and strategic imperative – and the timing is pointed. Russia's invasion of Ukraine sent gas prices surging 163% in 2022. More recently, the US-Israel war on Iran has sparked the biggest oil shock in history.

The report argues these are not one-off events but a recurring feature of a world where major supply shocks arrive roughly every seven to nine years.

“Europe’s value chains must be fundamentally rethought,” says Morgon.

The report calls for more renewable energy to cut dependency on imported fossil fuels. It also stresses the importance of battery and hydrogen storage, grid modernisation, and sustainable mobility infrastructure.

For hard-to-electrify sectors such as heavy shipping, the report points to biofuels derived from agricultural and forestry waste as a near-term bridging solution. Circular economy infrastructure and digital supply chain traceability also feature prominently.

Eric Hazan, founding partner at Ardabelle, called this a “decisive moment” for Europe’s industrial sovereignty.

“Either we invest now to build resilient value chains, or we accept structural decline,” Hazan warns.

Getting to Ardabelle’s best-case scenario, though, will require a lot of upfront expenditure. The firm calculates that it will require allocating 2% of GDP per year to the green transition between now and 2030. However, it estimates that will generate a return on investment of 218%.

SMEs will play a central role in the transition, the report says, as they account for 99% of European companies and form the connective tissue of industrial supply chains.

"SMEs and mid-cap companies that hold the keys," Morgon says.