Climate Change

Romania to receive EUR 2.14 billion from Just Transition Fund

Romania receives EUR 2.14 billion from Just Transition Fund

Photo: Martina Janochová from Pixabay

Published

December 15, 2022

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Published:

December 15, 2022

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Romania will receive EUR 2.14 billion from the Just Transition Fund (JTF) to support a fair transition of its coal regions to a greener economy. The funds were approved after the country adopted its Territorial Just Transition Plan (TJTP), the EU’s key tool for ensuring that the transition towards a climate-neutral economy is carried out in a fair way.

The European Commission has launched the Just Transition Platform to help member states draw up their territorial just transition plans and access funding from the Just Transition Mechanism, worth more than EUR 150 billion, which is envisaged under the European Green Deal investment plan. The Just Transition Fund, whose value is estimated at EUR 17.5 billion, is one of the three pillars of the Just Transition Mechanism.

Romania intends to abandon coal by 2030

The funds will target the most affected regions, helping Romania to follow up on its commitment to phase out coal by 2032, the European Commission said.

Recently, Romania announced plans to speed up the coal phaseout and complete it two years earlier, in 2030.

The money from the JTF will be used to help workers affected by the ongoing energy transition to retrain and find new jobs, support job creation by small and medium-sized businesses (SMEs) and, in some cases, large companies, and diversify the economy in the fossil fuel producing and carbon-intensive regions.

The money will be distributed to six Romanian counties

The funds will be allocated to six counties: Dolj, Galaţi, Gorj, Hunedoara, Mureş and Prahova. Gorj and Hunedoara still host active coal mining in the Jiu Valley. Dolj, Galați, Prahova and Mureş have carbon-intensive industries, such as steel, cement and fertilizers, and coal power is used for heating.

According to the plan, the funds will be used to finance training programs for workers in the coal and carbon intensive industries to reskill for the new green sectors and the economic diversification planned for the coal regions.

The Commission estimates that almost 30,000 workers will be retrained and about 11,000 new jobs created.

The funds will be used for the production of green steel and green ammonia

The JTF will also support the establishment of SMEs in sectors that promote, for example, circular economy, traditional activities like crafts, or the production of environmentally friendly construction materials. The money will also be invested in renewable and clean energy technologies, such as hydrogen.

In order to protect thousands of jobs in energy-intensive sectors and ensure that these strategic industries remain in Europe the JTF will promote the production of green steel in Galați and green ammonia in Azomureș.

The rehabilitation of brownfields in the mining sector and abandoned industrial sites by creating new green spaces, such as parks, commercial and residential areas for social housing is also part of the plan.

Territorial Just Transition Plans are the basis for securing money from the JTF

The Territorial Just Transition Plans are the basis for securing money from the Just Transition Fund. They define  development strategies for the most affected territories which are identified during negotiations of the 2021-2027 Partnership Agreements and the associated programs between the Romanian authorities and the Commission.

These plans are developed by the national and regional authorities in close consultation with local partners.

Their approval opens the door to funding by the JTF as well as to dedicated financing under the other two pillars of the Just Transition Mechanism: a just transition scheme under InvestEU and a Public Sector Loan Facility for Just Transition that combines Commission grants with European Investment Bank loans.

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