The European Green Deal and the EU climate policies aim to improve environmental quality, ensure clean air and reduce health risks for the population. To achieve this green transition, the EU will support carbon-intensive regions in diversifying their economies and creating new jobs. The Just Transition Fund (JTF) aims at supporting the socio-economic transformation of EU regions relying on fossil fuels and carbon-intensive industries to help them achieve climate neutrality by 2050 and to cut emissions by at least 55 % by 2030.
Activities supported by the Just Transition Fund will include investments in small and medium-sized enterprises, research and innovation, renewable energy, emissions reduction, clean energy technologies, site regeneration, circular economy, and upskilling and reskilling of workers.
The Just Transition Fund is part of the broader Just Transition Mechanism, which also includes two other pillars: a scheme under InvestEU for private investments and a public sector loan facility to generate public financing.
JTF co-funding
Funding will be available to all EU countries. The level of Union co-financing will be set according to the category of region in which the identified territories are located. The initial €7.5 billion from the Just Transition Fund would be complemented by transfers of funds from other EU programmes and by national co-financing. To unlock €1 from the JTF, EU countries would have to re-allocate a minimum of €1.5 and a maximum of €3 from their European Regional Development Fund (ERDF) or European Parliamentary Research Service European Social Fund Plus (ESF+) envelopes to JTF and to match it with corresponding national co-financing according to each region’s development category (more developed regions, transition regions, and less developed regions). In the May 2020 Commission proposal, the overall financing capacity of the JTF, including transfers and national co-financing, is estimated to be up to €89 billion. With the additional funding generated through InvestEU and public loans, the Just Transition Mechanism is expected to mobilise at least €150 billion of investment.
How JTF resources will be allocated
Funding will be available to all EU countries. The distribution of the JTF budget to the Member States is based on five socio-economic criteria, each of which has a different weighting factor in the calculated method: half of the allocation is based on economic criteria (greenhouse gas emissions, production of peat and oil shale and oil sands), with the other half based on social criteria (employment data).
The European Commission identified a preliminary list of eligible regions in each country. As already said, the broader Just Transition Mechanism whose resources will be allocated as follows.
Pillar 1: The Just Transition Fund.
About 89 billion will be used for grants funded directly from the multiannual financial framework, or ‘MFF’) and the new recovery fund (‘Next Generation EU’) with transfers from ERDF/ESF+ and national co-financing.
Pillar 2: The Just Transition Scheme
Up to 45 billion will be used under InvestEU to generate some €45 billion of investments.
Pillar 3: Public Sector Loan Facility
A new public sector loan facility, worth €1.525 billion from the EU budget and a loan component of up to €10 billion from the BEI.
CALLforEUROPE will be covering all funding opportunities coming in the future from the Just Transition Fund.
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