Number crunching on expanded Just Transition Fund continues

The proposed EU recovery plan aims to keep our economies afloat, but it is vital not to lose sight of the journey towards a more sustainable economy, write Sirpa Pietikäinen, Bas Eickhout and Paul Tang. [Photo: EC]

The European Commission revealed on Thursday (28 May) how individual EU members stand to gain from the newly-fortified €40bn Just Transition Fund. Talks are still ongoing on widening the scope of the fund to more regions that might need green aid.

As part of the Commission’s new budget proposal and €750bn virus recovery fund, the JTF saw its financial clout swell from €7.5bn to €40bn. The EU executive said that an extra €2.5bn would be provided as ‘fresh’ money and the rest sourced from borrowing on the capital markets.

EU climate chief Frans Timmermans told reporters that “we decided to make the Fund one of our landmark proposals for recovery” and that “with more resources we can move towards a green transition now”.

Regional Commissioner Elisa Ferreira added that it will “increase the overall funding available to make the transition be as soft as possible”. The JTF is part of a wider ‘mechanism’ that will now be worth an estimated €150bn.

Earlier on Thursday the Commission released figures – using the same metric as previously deployed – that show how each of the 27 EU members will be affected by the larger climate war chest, as not every country will be able to tap in to the same amount of funding.

Poland, which was the biggest winner from the previous proposal with €2bn, will be eligible for €8bn – a larger amount than the total size of the Commission’s initial plan and the new maximum ceiling – while Germany’s windfall increases from €877 million to just over €5bn.

Romania could net €4.4bn and the Czech Republic €3.4bn. France, Italy and Spain all stand to be allocated around €2bn, while Luxembourg sees its €4m tranche increase to €19m. 

According to the Commission, the minimum aid intensity is €32 per capita over the period instead of the €6 that was used in the January proposal.

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).

Numbers still crunching

But those figures are only indicative as talks continue between the Commission, national governments and the European Parliament about whether the allocation method should be tweaked to reflect the JTF’s new grand total.

“The dialogue between the Commission and member states is going on in relation to the selection of the specific areas where the intervention of the mechanism should be concentrating,” Ferreira said.

She added that “with the new additional financial power, and in dialogue with member states, we don’t exclude an enlargement of the areas benefiting from the Just Transition Fund” but said that the structure of the JTF would not fundamentally change.

As a follow-up to its initial proposal at the beginning of 2020, the Commission released a list of regions that would be eligible for funding, pending the successful submission of in-depth strategies.

Among the list of prime locations were Poland and Germany’s main coal mining regions, former mining heartlands in Spain, southern Italy’s steel producing centre and polluting marine ports in Malta.

Commission lists regions ripe for just transition cash

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.

The Commission’s proposal drew criticism from areas where a green transition has already started or even concluded, as they claimed that they were overlooked. Lower-income regions complained that the fund should only be used for carbon-heavy areas.

An increase of the JTF’s size has looked likely ever since the Commission first proposed its €7.5bn plan, given the blockade that emerged in the overall long-term budget talks between governments

Environmental policy funding was quickly identified as an area where there was room to manoeuvre with the thriftier ‘frugal four’ countries – Austria, Denmark, the Netherlands and Sweden – who have championed the idea of a leaner budget.

[Edited by Benjamin Fox]

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