Commission lists regions ripe for just transition cash

Commissioners Paolo Gentiloni (L), Johannes Hahn (C) and Elisa Ferreira (R). [Photo: European Commission]

The European Commission revealed on Wednesday (26 February) which specific parts of the EU are eligible to split a €7.5 billion-strong climate fund, earmarked for spending on cleaning up heavy industry and supporting workers in the fossil fuel industry.

All 27 of the EU’s member states will have access to the Just Transition Fund under the next long-term budget as things stand but only certain regions are on track to tap into the billions on offer.

The Commission announced which areas will be eligible as part of its country-by-country reporting under the European semester. Just 100 of the Union’s territories meet criteria based on carbon-intensive jobs, fossil fuel industrial activity and GDP per capita.

Governments will have to draw up so-called just transition plans in order to access the fund and a number of recommendations in the EU executive’s economic stocktake are meant to serve as pointers.

EU economy chief Valdis Dombrovskis urged authorities to submit applications for technical help during March, so Brussels can help countries wring the maximum out of their bids.

Follow the money

Germany leads the way in terms of sheer number of areas that can be classed as just transition regions, with 18 territories mostly in the east of the country. The Bundesrepublik has been allocated a potential slice of funding worth €877 million.

According to the Commission’s economic report, around 18,000 direct jobs in lignite coal production are at risk because of climate policies, while 10,000 more indirect positions are facing the chop.

“The phasing-out of coal will lead to increased unemployment challenges in the geographical areas concerned. In order to tackle these transition challenges, investment needs have been identified to use the growth potential of companies existing in the areas,” the report adds.

Germany currently aims to scrub the last of its coal from its energy mix by 2038, a deadline that environmental groups have universally denounced as being too late in the climate game.

Other spending suggestions include prioritising small and medium enterprises (SMEs), investing in clean energy sources and retraining workers. Similar initiatives have already been launched under the bloc’s Coal Regions in Transition Platform.

Poland, Germany get largest slices of Just Transition Fund

The European Commission’s €7.5-billion-strong Just Transition Fund (JTF) is set to allocate €2 billion to Poland and €877 million to Germany under a proposal sent to national governments on Wednesday (15 January).

Nine Polish regions were identified and the Commission’s audit warns that 78,000 jobs in the Silesian coal mining area alone are in the firing line. That number is half the total coal miners in the entire EU.

“Moving away from coal extraction would require additional efforts on economic diversification, reskilling and upskilling, counteracting depopulation and on revitalisation,” the report adds.

But Poland’s €2bn-strong piece of the Just Transition Fund pie is at risk, after European Council President Charles Michel made funding dependent on climate policy ambition.

Under the latest proposal for the EU budget, allocations are halved if a country has not agreed to an EU-wide target of climate-neutrality by 2050. Poland is the only country yet to sign up to it.

Poland’s just transition bonus cut 50% under latest EU budget proposal

Poland would see its €2 billion share of the EU’s Just Transition Fund cut in half under a new EU budget proposal published on Friday (14 February), which penalises countries that have not signed up to the bloc’s 2050 ‘climate-neutrality’ goal.

More than mining

EU heads have manoeuvred over the last few months to ensure the JTF does not become a de facto coal phase-out fund, as several member states hope to use the money on offer for matters not related to energy.

That status quo is reflected in the Commission reports, which suggest a number of spending options for countries that focus on industries like steel and chemicals, as well as cleaning up transport links.

Just two of Italy’s regions are mentioned, one of which, Taranto in the country’s southwest, plays host to one of Europe’s largest steel mills. Some 20,000 jobs are at stake there, as is public health, jeopardised by dangerous pollution from the site.

The report states that Italy’s potential €364m should go towards increasing energy efficiency and renewables deployment at industrial facilities, as well as decontaminating and repurposing land.

France’s Bouches-du-Rhône and Nord regions will split a €400m tranche of funding, which the Commission says should be earmarked for cleaning up their energy, chemical and steel sites. More than 153,000 jobs are estimated to be at risk.

Building new nuclear power stations or decommissioning old reactors will not be an avenue of action open to France though, as atom-smashing activities are precluded from the JTF’s criteria.

Nuclear 'excluded' from EU's new Just Transition Fund

The EU’s regional policy Commissioner Elisa Ferreira revealed on Tuesday (14 January) details of the €100 billion Just Transition Mechanism, a key financial component of the European Green Deal that should make the bloc climate neutral by 2050.

The EU’s smallest member state, Malta, is also in the reckoning: transport pollution is the island nation’s biggest transition challenge, according to the Commission, and its €8m share should go towards its ports.

“The Fund could in particular target the two main Maltese ports, which are an important part of the economy in terms of enabling growth and providing jobs,” the report reads, citing a cruise ship hub and container terminal as problem areas.

“It is necessary to provide an alternative to the burning of heavy fuel/gasoil in these ports by providing the ships with power supply,” the Commission suggests, adding that clean energy options like dockside charging should receive funding.

EU leaders still have to agree on the overall long-term budget, after talks collapsed at a summit in Brussels last week. The JTF is not exempt from that discussion, although all signs point to its overall pot increasing if any changes are made.

According to a negotiating text circulated by the Commission at the leaders’ meet-up, the EU executive proposed raising the €7.5bn to €7.8bn. That text was ultimately dismissed though and the €7.5bn figure remains the current offer.

Another summit is planned for the end of March and another might even be called sooner.

EU starts to chart shipping’s new green course

The shipping industry will soon have to pay for its environmental impact in the EU, as both the European Commission and Parliament are moving forward with plans to include vessels in the bloc’s flagship carbon market. But there are choppy waters ahead.

[Edited by Zoran Radosavljevic]


Life Terra

Funded by the LIFE Programme of the EU

The content of this publication represents the views of the author only and is his/her sole responsibility. The Agency does not accept any responsibility for use that may be made of the information it contains.

Subscribe to our newsletters