The Just Transition Fund: climate neutrality should leave no one behind

2 July 2020
The Just Transition Fund: climate neutrality should leave no one behind

When President von der Leyen took office, one of her mandate's promises as well as pillars was to ensure climate neutrality for Europe. This climate neutrality was meant to be achieved through fair policies for all territories. In order to attain this objective, the European Commission put forward in January 2020 a €100 billion Just Transition Mechanism, a mechanism that is a part of the EU Green Deal and encloses the Just Transition Fund (JTF). 

The JTF – one of the three pillars of the Just Transition Mechanism together with the transition scheme under InvestEU and a public sector loan facility backed by the EU budget – was designated a budget of €7.5 billion. The aim of this budget was to help the European Union's territories that are facing difficulties in the transition towards climate neutrality. The proposition was to top up the €7.5 billion with financing coming from the European Regional Development Fund and from the European Social Fund Plus, both part of the EU’s Cohesion Policy.  

In its initial presentation, the First Vice-President of the European Commission, Frans Timmermans, described it as “a pledge of solidarity and fairness”. Despite the Just Transition Fund being described as the beating heart of the Mechanism, several criticism circulated regarding the financial amounts allocated to the program. Concerns were also voiced around the idea that the funds would be insufficient to carry out the level of investment required by Member States, and hesitations were shared about it becoming a “de-facto coal phase-out” after Vice-President Timmermans had also referred to it as “a message to coal miners, peat farmers and oil shale workers”.

All this took place in the first months of the year, before the COVID-19 crisis hit our societies and our economies and left us facing one of the deepest recessions of the last century. On 27 May, the European Commission revised its initial proposals and presented a new Multiannual Financial Framework (MFF), as well as an EU Recovery Plan. As part of this proposal, the European Commission also increased the allocation of financial resources for the JTF and brought it up to €40 billion. It explained that the allocation of funds would follow the same criteria as already proposed in January, making Poland, Germany and Romania the biggest beneficiaries of the Fund. Whilst the opinions regarding the funds' increase were generally positive, concerns remained, coming from countries that still argued about the fact that this amount would not allow them to complete the transition swiftly. 

On 24 June, EU ambassadors met and endorsed the partial position of the Council in the establishment of the Just Transition Fund and found that its eligibility criteria go along the line of the EU’s Cohesion Policy. Although this is a step forward on the path to solidifying an instrument intended to achieve climate neutrality, it nevertheless does not seem to be enough.

From the PES Group, we welcome the creation of the Just Transition Fund and the fact that it takes on board some of the recommendations of the previous CoR opinion on coal regions. We welcome the budget allocation particularly and its substantial increase, which is at least needed to start the green and fair recovery after the COVID-19 pandemic. 

The July plenary of the European Committee of the Regions adopted our member and mayor of Rijeka, Vojko Obernsel’s opinion on the Just Transition Fund. On the topic and the opinion he affirmed that “the Just Transition Fund is key to help Europe’s most carbon-intensive regions on their path towards a green recovery, both in advancing the overall goal of reducing greenhouse gas emissions while at the same time transforming their economy and building a more resilient future for their communities. As the European Committee of the Regions, we call to restrict the access to the Fund only to those who commit to objectives of the European Green Deal and of the Paris Agreement, including the EU's own goal to be climate neutral by 2050. For us, it is fundamental that the Transition Fund is not only just but also fair”. 

The European Commission committed itself to reach climate neutrality by 2050 and, while it is taking steps in the right direction, the budgetary allocations to the Just Transition Fund do not seem enough. The initial proposal presented a lack of resources for Member States and its most affected regions, and even the revised funds of up to €40 billion seem insufficient. Europe is enduring a pandemic that will require courageous decisions and bold steps to recover. There is a long way to go and the incentives to invest in a green recovery might prove to be insufficient in regions where the options are to salvage jobs or invest in the greening of the economy. The PES Group supports the proposal for a Just Transition Fund but more will need to follow so that cities and regions across Europe take a leap of faith for the sake of our future. 

We believe that if local and regional actors are the ones that are meant to benefit from this instrument, it is then only natural for local and regional authorities to be involved in all the steps of the process. When the JTF was firstly introduced, studies had already announced that, for the transition and the funds to work, actions had to be locally driven. If the basis of this fund is to leave no one behind, the Commission must ensure that those who will see their lives affected by the transition towards climate neutrality are those who directly reap the benefits.

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