This week in EU policy: More money for defence and the Blue Economy shakes off its Covid blues

One of the biggest themes we here at Impact Loop have been looking at in recent months has been the way the EU's security pivot – amid Russian aggression and fears of 'hybrid' warfare – might affect the impact investing ecosystem.

Billions of euros could be up for grabs for innovative companies that specialise in both defence and civil use, and we've been talking to investors who hope that the need for climate security is not lost in this frenzy.

Well, read on for the first sign of how the impact world stands to benefit from Europe's rearmament.

1. European Investment Bank announces first investment from defence fund

The news: The European Commission and Investment Bank (EIB) have announced a €40m investment to fund early-stage companies in defence- and security-tech, working with Keen Venture Partners.

What happens now: This is the first of what is planned to be many more investments via the EIB’s Defence Equity Facility, which has €175m of its own and is looking to mobilise even more via the private sector.

What it means for impact companies and investors: This investment, a first for the EIB's new defence fund, sees the bank putting into action something we’ve been talking about for a while at Impact Loop. Keen Venture Partners has a solid impact pedigree – with success stories like Klima and PlanA in its portfolio – and this investment is the first example of how the EU’s security pivot could benefit the impact sector. However you feel about a focus on defencetech, one thing is clear: the money is beginning to flow.

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2. MEPs support simplification for businesses on carbon mechanism

The news: The European Parliament voted overwhelmingly to support proposed changes to the Carbon Border Adjustment Mechanism (CBAM), to loosen the rules for small businesses.

What happens now: The parliament will enter into negotiations with the Council on this and other simplification legislation, which should carry into the next few months.

What it means for impact companies and investors: It’s another simplification, though this one is a little less clear than previous rounds we’ve seen. The CBAM is basically an carbon tax on imports, a mechanism designed to make sure EU companies don’t offset their own carbon emissions by ‘offshoring’ them down their supply chain.

So the simplification doesn’t sound great, along the lines of similar we’ve seen with vehicle emissions and CSR reporting. On the other hand, the EU insists that, as the exemptions that have been voted through only apply to small businesses, the overwhelming majority of emissions from heavy industry imports will still be taxed. So we’ll have to keep an eye on how this actually changes the carbon regulation landscape.

3. Commission introduces rules for Net Zero Industry Act

The news: The Commission has issued a raft of secondary legislation for the 2024 Net-Zero Industry Act, defining the scope of projects which can benefit.

What happens now: These secondary legislations effectively come into force straight away, meaning the scope for the Net-Zero Industry Act has been formally defined and companies can begin to work from them.

What it means for impact companies and investors: This is a good, if slightly obscure, bit of news. The Net-Zero Industry Act is designed to speed up the green industrial transition towards net-zero, while trying to make Europe more competitive in the decarbonisation sector.

It is meant to streamline permitting and administration for development of decarbonisation and net-zero tech, and with this introduction of the laws governing the scope of what projects can apply, companies working on such tech now have the framework to operate within. Time to get to work.

4. New EU platform for zero-emission urban mobility

The news: The EU’s UPPER Project, which works on solutions to improve public transport and urban mobility, pushing towards net-zero in particular, has launched a new platform to serve as a knowledge hub for transport practitioners, cities and other stakeholders.

What happens now: The platform appears to be up and running, launched as part of the broader UPPER Toolkit project.

What it means for impact companies and investors: Urban mobility is a big part of the impact scene and this platform, as well as the underlying toolkit it works from, looks like a great resource for mobility startups to both share knowledge and get into better dialogue with cities and urban planners. At the very least, it should serve as a useful tool for innovators to see where their projects might have scaling possibilities, and better understand the relationship between urban policy and innovation around Europe's various urban centres.

5. Europe’s Blue Economy has ‘fully recovered’ from COVID, says report

The news: The Directorate-General for Maritime Affairs and Fisheries has released the 2025 Blue Economy Report, which shows great strides for Europe’s waters since a Covid slump, driven to a large extent by investment in blue renewables and other sustainability projects.

What happens now: The Blue Economy Observatory has the report here.

What it means for impact companies and investors: This one’s not so much a bit of actionable intelligence, rather a reminder that in these uncertain times, there are still glimmers of good news for the impact sector.

"The EU is making steady progress toward building a sustainable blue economy," according to the report’s announcement, with maritime-based renewables and emissions reductions driving that optimism.

At the same time, water is one of the key verticals a lot of impact investors tell us they are looking at this year, so this endorsement from the main EU body overseeing the blue economy could well be used to generate more interest in the sector.

If you have any thoughts on this round-up, what should or should not be in here, or you want to reach out with a tip of your own, feel free to get in touch – editorial@loop.se.