From the European Commission’s point of view, the Just Transition Fund is a key element to leave no one behind when the Green Deal is implemented. In order to receive financial support from this Fund, Member States have to draw up territorial plans, which define those regions within their country, which are most adversely affected by this transition and should therefore be eligible to receive resources from this fund. Particular focus should thereby be placed on those regions, which are faced with job losses in the coal industry and energy-intensive industries. Apart from the description, as to what kind of social, economic and environmental challenges these regions are subjected to, the plans should also explain which positive development may be expected due to the financial support.

The Fund determines that monies are allocated to activities, which serve as a transition towards a more sustainable economy or that result in setting up businesses, which in turn create jobs. Apart from that, it is also possible to encourage research activities as well as projects relating to clean and affordable energy or sustainable mobility concepts. The funds may also be used to support further education and retraining projects, which can be accessed by people in and out of work. Finally, activities concerning education and social inclusion are also an option, especially in view of creating the relevant necessary infrastructure. 

The Commission’s original intention had been to furnish the Fund with 7.5 billion euro. However, due to the outbreak of the Coronavirus crisis, the Commission, within the scope of implementing the Recovery Plan, proposed to increase the Just Transition Fund to 40 billion. During tough negotiations with the Council, the increase was reduced to 10 billion, as a result of which the Fund finally amounted to 17.5 billion euro. The Member State, which will benefit by far the most from the Fund, is Poland, which will get a total of 3.5 billion euro. Germany has been allocated 2.25 billion, and Austria 124 million.

During the trilogue negotiations, representatives of the European Parliament were able to establish the restriction that funds for a Member State may be reduced by half, if the State does not support Europe’s 2050 climate neutrality target. Apart from that, Parliament succeeded in gaining support for the idea that in case of an increase of the Fund from 2025, those Member States which will be able to exceed the levels of reducing greenhouse emissions in the target areas will receive more resources from it. 

Prior to the publication of the legal text in the Official Journal of the European Union, both European Parliament and Council have to endorse the Agreement. However, these consents are of a primarily formal nature, as no veto against the political agreement is expected.

Further information

Commission: Commission welcomes the political Agreement on the Just Transition Fund

AK EUROPA: Just transition towards a climate-neutral Europe

AK EUROPA: EU budget and recovery plan: EU institutions announce agreement