The European Union has warned of serious risks to Cyprus’ economy and competitiveness from the degradation of nature and ecosystems, with key sectors including agriculture, construction and transport particularly exposed.
The European Commission says Cyprus has a high level of direct dependence on ecosystem services, with 50% of the country’s gross value added (GVA) highly dependent on them, compared with an EU average of 44%.
The Commission is calling for increased investment in biodiversity and ecosystems.
€96 million annual investment gap
The findings are included in the European Commission’s 2026 Country Report for Cyprus, which provides an analysis of the country’s economic and social situation as part of the EU’s annual policy coordination process.
According to the report, Cyprus is significantly below the level of investment required each year for biodiversity and ecosystems.
Annual investment needs for the 2021–2027 period are estimated at €149 million, while current biodiversity funding is estimated at €54 million per year.
This leaves an annual investment gap of €96 million, equivalent to 0.4% of Cyprus’ GDP.
Limited progress on nature protection
According to the report, Cyprus is home to 42 habitat types and 55 species covered by the Habitats Directive.
In 2018, 45.2% of assessed habitats were reported to be in favourable conservation status, while 63.9% of protected species were considered to be in favourable condition. Both figures were above the EU average.
However, the Commission said there had been a general lack of progress in maintaining or restoring the favourable conservation status of protected species and habitats under the EU nature directives.
The main pressures and threats are linked to agriculture, infrastructure development, the development and operation of transport systems, and natural processes.
Nature degradation threatens key sectors
The Commission warned that the degradation of nature poses significant risks to the economy and competitiveness.
Agriculture, forestry, fisheries, construction, water supply, mining and minerals, healthcare and transport are particularly dependent on ecosystem services.
The report estimates that 100% of the GVA generated by these sectors is directly dependent on ecosystem services.
Cyprus’ transport sector has a higher level of dependence than those in other EU member states. The country’s supply chain also has a significantly higher dependence on ecosystem services than the EU average, at 32% of GVA compared with 22%.
Failure to maintain ecosystems’ ability to provide essential services could result in high costs or even production disruptions in affected sectors, the Commission said.
Protecting and restoring key ecosystems would help preserve their long-term competitiveness.
Cyprus preparing national restoration plan
The Commission said targeted action is needed to protect and restore nature.
In 2022, 29.5% of the land areas under the effective control of the Republic of Cyprus government were covered by the Natura 2000 network. Including other nationally designated protected areas, Cyprus protects 37.8% of its land and 8.6% of its marine areas.
Under the EU Nature Restoration Regulation, adopted in June 2024, member states must restore at least 20% of land and sea areas by 2030, as well as all ecosystems requiring restoration by 2050.
Cyprus, like every EU member state, must prepare and submit a National Restoration Plan to the European Commission by September. The plan will identify areas requiring restoration and outline measures covering terrestrial, marine, river, agricultural, urban and forest ecosystems.
According to a response by former Agriculture Minister Maria Panayiotou to a parliamentary question in August 2025, restoration measures would initially focus on areas within the Natura 2000 network.
The European Commission will then assess the plan within six months of receiving it. Cyprus will subsequently have six months to finalise, publish and submit the plan after receiving the Commission’s observations.
Implementation of the restoration measures is therefore expected to begin no later than September 2027.
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