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EU member states to receive EUR 17.5 billion in grants for fossil fuel phaseout

EU-Parliament-Just-Transition-Fund-for-fossil-fuel-phaseout

Photo: Benita Welter from Pixabay

Published

May 20, 2021

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Published:

May 20, 2021

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Workers in the coal industry and regions that depend on it in the EU will be able to tap on the EUR 17.5 billion Just Transition Fund, part of the European Green Deal. The European Parliament just adopted the legislation. Critics claim the sum is insufficient.

European Union member countries are expected to approve the Just Transition Fund next month, as the European Parliament voted for the tool with 615 lawmakers in favor and just 35 against it. The COVID-19 recovery program will provide EUR 10 billion and EUR 7.5 billion more will come from the bloc’s regular seven-year budget.

The JTF is the main pillar of the Just Transition Mechanism for the support to regions, sectors and workers affected the most by the reduction in the use of fossil fuels. It is an element of the European Green Deal – a comprehensive package of financial support and rules, aimed at eliminating net greenhouse gas emissions by mid-century and making the economy resistant to climate change effects.

Safety net for workforce in fossil fuel sector, marginalized regions

The money will be used for job-seeking assistance, upskilling and reskilling and the inclusion of the workforce within the energy transition efforts. Micro-enterprises, business incubators, universities and public research institutions will also be backed, together with investments in new energy technologies, energy efficiency and sustainable local mobility.

Cutting net emissions to zero is almost synonymous with phasing out fossil fuels, particularly coal

The Just Transition Fund is a key tool to ensure the transition towards climate-neutral economy happens in a fair way, leaving no one behind, the European Parliament’s rapporteur Manolis Kefalogiannis said. Cutting net emissions to zero is almost synonymous with phasing out fossil fuels, particularly coal.

The plan is to switch district heating to renewable sources and to decontaminate and renew coal industry sites as well with the help of the JTF. The focus is placed on underdeveloped and unconnected regions and islands. Waste incineration and fossil gas projects are excluded from the grants scheme.

Just Transition Fund may offer advantage for countries with fastest results

A so-called green rewarding mechanism will be added if the fund is expanded after 2024, so countries that make better progress would be able to get more cash. Member states are entitled to only 50% of their national allocation unless they commit to achieving carbon neutrality by 2050.

Poland and Germany are due to receive the biggest share of the JTF. As for the region covered by Balkan Green Energy News, coal-dependent Romania is third in the row and Bulgaria is fifth.

Romania is third in the list of the biggest recipients of grants from the JTF while Bulgaria is in fifth place

Meanwhile, countries in the Western Balkans, which aspire to join the EU, can for now only count on parts of the EUR 9 billion Economic and Investment Plan for the Western Balkans and technical assistance within the Platform Initiative in Support of Coal Regions in Transition in the Western Balkans and Ukraine.

Their economies are threatened by the EU’s plans to introduce a cross-border carbon tax. Turkey is separately exploring its options.

Only social policy element of the European Green Deal

“The JTF is the only social policy element of the Green Deal. The JTF is an assurance to all people that the transformation towards a climate-friendly economy will not only be compatible for everyone but actually beneficial for everyone,” said Niklas Nienass, member of the European Parliament from the Greens – European Free Alliance group.

He stressed it is “the starting gun for the race towards climate justice,” but also claimed the fund is too small.

“All of us here are also immeasurably disappointed. Why? Because despite the need for a climate-friendly social policy, despite the effectiveness of this very regulation and despite the explosive nature of climate protection policy, the [European] Council did not provide the JTF with the adequate resources to enable this tool’s piercing potential,” according to Nienass.

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