EU’s ‘just transition fund’ gesture muddies budget waters

Polish MEP Jerzy Buzek welcomed the idea of setting up a fund for just transition. [European Parliament]

Europe’s fossil fuel-dependent regions could benefit from an additional €5 billion under the next EU budget, thanks to a proposal endorsed by the European Parliament. But it could complicate already complex talks with the Council, which is eager to cut future spending.

On 5 November, the Parliament’s budgets committee signed off on a proposal that allocates €4.8 billion for an Energy Transition Fund (ETF) to help regions green their economies.

Negotiations are still ongoing on the multiannual financial framework (MFF) for 2021-2027, following the European Commission’s May proposal but MEPs have already called on the EU executive to propose a new regulation that will establish the fund.

During a EURACTIV event on 6 November in the Parliament on the upcoming COP24 climate summit in Poland, former EP president Jerzy Buzek (EPP) welcomed the support of his fellow MEPs in calling for a dedicated instrument.

But climate experts have warned that the proposed fund, although “commendable”, is just a €5bln “drop in the ocean” when compared with the emission-reduction challenges that will face Europe in the years to come.

Climate Action Network Europe also told EURACTIV that the proposal will be “politically challenging” just as the European Council considers making cuts to the EU’s next budget, rather than injecting new cash.

But in Strasbourg this week, MEPs called on the European Council to speed up its deliberations and agree to a larger budget than the last one. Lawmakers also said that the share dedicated to climate action should increase from the proposed 25% to 30%.

Parliament urges Council to start negotiating on next EU long-term budget

The European Parliament laid down funding priorities for the next long-term EU budget on Tuesday (13 November) and urged the Council to agree on a common position so that talks be completed before next May. But differences still remain about the level of member states’ contributions.

NGO Bankwatch Network’s Raphael Hanoteaux said the Parliament’s ETF proposal is “welcome attention” but “too little, too late” and instead suggested that financial tools like Cohesion Policy, which is also facing the accountant’s axe, should be strengthened instead.

“Cohesion Policy is designed precisely to support regions in transition like those where the use of coal is heaviest and where major challenges exist in moving away from fossil fuels,” he added.

Roland Joebstl of the European Environmental Bureau said Europe should look to Spain as a “good example” of how to reskill workers, citing Madrid’s recent decision to shut down coal mines and launch early retirement schemes for miners.

Spain targets 100% renewable power by 2050

Spain’s government has published a new climate plan that targets a 100% renewable energy electricity system by 2050, with goals that outstrip those adopted by the EU and a ban on new gas and oil exploration.

Green challenges

Many of the arguments against increasing the EU’s climate targets, including its overall emissions reduction goal of 40% for 2030, are focused on the impact this could have on employment in areas like Silesia in Poland, and the Ruhr in Germany.

At the event in the Parliament though, Lola Vallejo from sustainability think-tank IDDRI, said the UN’s recent report on climate change shows that “early climate action is not detrimental to social justice. There are ways to phase out coal without society suffering from it.”

European trade union ETUC’s Monserrat Mir Roca said it was of the utmost importance to make sure that new jobs created by the energy transition are “fully protected”, adding that “communities must be at the centre of the transition”.

Great Expectations from COP24's Polish hosts

Poland’s turn at holding the UN’s annual climate summit is meant to be the one shot at making the Paris Agreement a reality. But the hosts also want to make sure “no-one gets left behind” by what promises to be a major societal change.

Mir Roca also said that existing permanent jobs should be replaced like-for-like and not lead to temporary employment.

Reskilling workers to cope with the changes dictated by the terms of the Paris Agreement is seen as essential to making sure the economic impact of climate action is positive. Training coal miners and gas pipeline workers in solar panel manufacturing and building renovation are among the suggestions.

Other lines of reasoning used to advocate against higher targets include Europe’s relatively small contribution to global emissions. It is currently responsible for 10% of GHGs, leading some politicians to claim that too aggressive policies would blunt the continent’s competitive edge.

That point was refuted by S&D MEP Arne Lietz, who is the Parliament’s lead man on climate diplomacy. He insisted that “where Europe leads, the rest follows” and added that the EU’s international standing should not be underestimated.

Long-term thinking

‘Just transition’ has become one of the most used soundbites during the lead up to next month’s COP24 summit in Katowice and the Polish hosts have been keen to make sure that Europe does not leave anyone behind in the switch to a greener economy.

Poland’s UN climate presidency, headed by Michał Kurtyka, will propose the so-called Silesia Declaration during the December summit, which calls for a programme to monitor how countries protect workers in industries like coal mining.

Climate change ‘laboratories’ open up around EU

Stark warnings from the United Nations ahead of a make-or-break summit in Poland in December have propelled climate change up the political agenda. Now, an experimental approach at regional level hopes to help the EU hit its emission reduction targets.

The declaration will form the latest piece of a jigsaw puzzle meant to convince EU member states in particular that greenhouse gas emissions can be cut without local communities suffering the knock-on effects.

It will complement the European Commission’s recently launched Coal Regions in Transition Platform, as well as existing financial instruments like Cohesion Policy funds, the European Social Fund and InvestEU.

On 28 November, the Commission will present its long-term climate strategy for 2050, which will include several pathways meant to drag Europe’s economy onto a Paris Agreement-compliant trajectory.

Following decisions by the European Council and Parliament, one of those pathways must be a net-zero emissions option, which is reportedly the favoured option of Commission boss Jean-Claude Juncker and his energy Commissioner, Miguel Arias Cañete.

Behind-the-curtain of the EU's 2050 climate plan

The European Commission’s long-term climate plan could be hamstrung by a semantic dispute over vague figures and a fear of failure left over from previous ill-fated attempts at ambitious climate action, EURACTIV has learned.

Next year will be the proving ground for the strategy, which will ultimately have to secure the unanimous backing of the Council and avoid the fate of the previous strategy, which was vetoed in 2011 and then 2012 by Poland.

Poland could potentially not offer an obstacle for the next cycle of EU institutions or more progressive member states, given that the ongoing Article 7 procedure against the Eastern European nation could strip Warsaw of its Council voting rights.

Supporter

LUKOIL

25 Years of Sustainable Development

LUKOIL is one of the major international oil and gas companies that accounts for more than 2% of the world's oil production and around 1% of the proven hydrocarbon reserves. Every day millions of consumers in more than 30 countries worldwide buy LUKOIL’s products, energy and heat, improving the quality of their life.

While having the full production cycle, LUKOIL exercises full control over the whole production chain — from oil and gas production to petroleum product sales. LUKOIL's goal is to create new value, maintain high profitability and stability of its business, deliver high return on capital employed for its shareholders by increasing the value of the LUKOIL's assets and the payment of cash dividends.

To achieve these goals, LUKOIL shall use all available opportunities, including further efforts to reduce costs, increase the efficiency of its operations, improve the quality of its products and services and use new advanced technologies.

Taking social responsibility for the efficient use of natural resources in all its earnestness and maintaining favorable environmental conditions in its business, LUKOIL is guided by the highest HSE standards. In its operations the LUKOIL pursues the sustainable development principles and seeks to achieve a good balance between socio-economic and environmental development.

LUKOIL’s corporate mission is to make the energy of natural resources serve the interests of mankind, to efficiently and responsibly develop the unique hydrocarbon fields by providing Company growth, the wellbeing of its employees and community at large.

From Twitter

Subscribe to our newsletters

Subscribe

Want to know what's going on in the EU Capitals daily? Subscribe now to our new 9am newsletter.