Opinion
By Yiannos Stavrinides
“Net zero” is not just a slogan. It is a legal obligation to reach climate neutrality by 2050. The roadmap requires a 55 percent cut in net emissions by 2030 from 1990 levels and, under the revised Climate Law finished in February, a 90 percent cut by 2040.
Finland leads the pack, moving its net-zero target up to 2035, a full 15 years ahead of the deadline. Denmark, Sweden, and Germany come next, aiming for 2045.
In 2025 the Cyprus Banking Association and Cyta paid for a McKinsey study to map out a path for Cyprus to hit net zero by 2050. That roadmap could feed into the revised National Energy and Climate Plan. The last version arrived in December 2024, six months past the June 30 deadline. The next update is due in 2027, and that is likely where the McKinsey work will show up.
The study pegs the total cost at €40 billion through 2050. It did not factor in the February 2026 revision that calls for a 90 percent cut by 2040, so the real figure will be higher. Most of the money would go to transport, buildings, and electricity. A separate academic study puts the cost at €80 billion in 2022 prices. The latest National Energy and Climate Plan from 2024 estimates near-term spending at €20 billion, again without adjusting for the February changes.
These sums dwarf the size of the Cypriot economy, whose GDP is expected to reach about €36 billion in 2026. Even if the €40 billion figure holds, the state would put up roughly €10 billion and the private sector €30 billion. That would still force the government to borrow an amount equal to half of today’s public debt. In practice the private sector is unlikely to supply €30 billion for net-zero projects, so the bulk of the spending would fall on the state. Public debt could then climb to three times its current level over time.
This points to a risk that rarely enters the conversation. Rating agencies keep warning that the Cypriot economy is exposed to climate risks, yet the discussion stays focused on strong growth numbers and European rankings. Meanwhile other countries borrow and invest, while Cyprus still struggles to launch a tender and treats borrowing for productive projects as something to avoid. The Recovery and Resilience Facility could have supplied crucial financing, but most of it went unused and lacked any clear strategy for where the money should go.
